SILLIMAN UNIVERSITY

Senior High School Department

Accountancy, Business, and Management (ABM)

Jollibee Foods Corp.

A Financial Statement Analysis Report

Submitted by:

Alyssa Marie A. Carpio

Grachelle Anne O. Ho

JKylene C. Lumusad

Joshua Urielle R. Perasol

May Vincent B. Regis

Ericka Niña L. Sienes

Gerarica T. Villaflores

Submitted to:

Mr. Japril D. Cataluña

December 6, 2020
Executive Summary
2) Research and Present the following Financial Statements:

a. Statement of Financial Position (Balance Sheet)

Jollibee Foods Corp.

Consolidated Statement of Financial Position

For years Ended December 31, 2019 and 2018

(Amount in Thousand Pesos)

b. Statement of Comprehensive Income (Income Statement)
C. Statement of Changes in Equity

Jollibee Foods Corp.

Consolidated Statements of Changes in Equity

For years Ended December 31, 2019, 2018, and 2017

(Amount in Thousand Pesos)

d. Statement of Cash Flows

Jollibee Foods Corp.

Consolidated Statement of Financial Position

For years Ended December 31, 2019 and 2018

(Amount in Thousand Pesos)

Conduct the following analysis for the Balance Sheet and Income Statement:
I. Horizontal Analysis
Jollibee Foods Corp.
Comparative Statements of Financial Position
As of December 1
ASSETS 2019 2018 Peso Value Percentage
Change Change
Currents Assets
Cash and cash equivalents 20,892,021 23,285,915 -2,393,894 -10.28%
Short-term investments 2,130,000 883,200 1,246,800 141.17%
Receivables and contract assets 5,906,289 4,862,744 1,043,545 21.46%
Inventories 9,966,084 8,812,174 1,153,910 13.09%
Other current assets 6,725,008 4,694,389 2,030,619 43.26%
Total Current Assets 45,619,402 42,538,422 3,080,980 7.24%
Noncurrent Assets
Financial assets at fair value 38,202 39,842 -1,640 -4.12%
through profit or loss
Available-for-sale financial assets 0 3,512,230 -3,512,230 -100.00%
Interests in and advances to joint 6,832,102 0 6,832,102 0.00%
ventures, co-venturers and
associates
Property, plant and equipment 32,592,122 26,672,549 5,919,573 22.19%
Right-of-use assets 42,907,418 36,564,242 6,343,176 17.35%
Investment properties 572,722 848,974 -276,252 -32.54%
Trademarks, goodwill and other 50,208,119 31,541,825 18,666,294 59.18%
intangible asset
Operating lease receivables 98,749 64,304 34,445 53.57%
Finance lease receivables 161,934 184,800 -22,866 -12.37%
Derivative asset 0 82,852 -82,852 -100.00%
Deferred tax assets 4,449,262 4,711,794 -262,532 -5.57%
Other noncurrent assets 3,795,974 3,751,044 44,930 1.20%
Total Noncurrent Assets 141,656,604 107,974,456 33,682,148 31.19%
Total assets 187,276,006 150,512,878 36,763,128 24.43%
Liabilities and Owner's Equity
Current Liabilities
Trade payables and other current 34,652,065 28,716,769 5,935,296 20.67%
liabilities and contract liabilities
Income tax payable 391,914 263,473 128,441 48.75%
Short-term debt 22,180,320 0 22,180,320 0.00%
Current portion of:
Lease liabilities 7,036,754 5,743,062 1,293,692 22.53%
Long-term debt 3,415,975 4,892,102 -1,476,127 -30.17%
Liability for acquisition of a 2,800 11,238 -8,438 -75.08%
business
Total Current Liabilities 10,455,529 39,626,644 - -73.61%
29,171,115
Noncurrent Liabilities
Noncurrent portion of:
Lease liabilities 40,270,650 34,887,727 5,382,923 15.43%
Long-term debt 19,179,748 21,372,251 -2,192,503 -10.26%
Liability for acquisition of 0 2,907 -2,907 -100.00%
a business
Pension liability 2,221,320 1,320,646 900,674 68.20%
Derivative liability 58,241 0 58,241 0.00%
 Provisions 825,109 825,109 0 0.00%
Deferred tax liabilities - net 4,759,233 3,481,497 1,277,736 36.70%
Total Noncurrent Liabilities 67,314,301 61,890,137 5,424,164 8.76%
Total Liabilities 134,994,129 101,516,781 33,477,348 32.98%
Equity Attributable to Equity
Holders of the Parent Company
Capital stock - net of subscription 1,092,971 1,088,036 4,935 0.45%
receivable
Additional paid-in capital 8,797,360 8,638,438 158,922 1.84%
Other reserve 1,877,400 0 1,877,400 0.00%
Cumulative translation
adjustments of foreign 832,080 587,399 244,681 41.65%
subsidiaries and interests
in joint ventures and associates

Remeasurement loss on net (965,391.00) (307,995.00) -657,396 213.44%

defined benefit plan - net of tax
Unrealized gain on change in fair 0 0 0 0.00%
value of available-for-sale
financial assets

Comprehensive income (loss) on (58,241.00) 82,852 -141,093 -170.30%

derivative liability
Excess of cost over the carrying (1,804,766.00 (1,804,766.00 0 0.00%
value of non-controlling interests ) )
acquired
Retained earnings:
Appropriated for future 20,000,000 20,000,000 0 0.00%
expansion
Unappropriated 23,009,145 19,391,656 3,617,489 18.65%
Total Retained Earnings 52,780,558 47,675,620 5,104,938 10.71%
Less cost of common stock held in 180,511 (180,511.00) 361,022 -200.00%
treasury
52,600,047 47,495,109 5,104,938 10.75%
Non-controlling Interests (318,170.00) 1,500,988 -1,819,158 -121.20%
Total Equity 52,281,877 48,996,097 3,285,780 6.71%
Total Liabilities and Owner's equity 187,276,006 150,512,878 36,763,128 24.43%
The horizontal analysis of Jollibee Foods Corporation shows operations as reported in its

balance sheet for years 2018 and 2019. Examining the effects of the peso value change and

the percentage change, we can observe the following:

 Jollibee Foods Corporation's total current assets have substantially increased by

24.43%% at the end of the year 2019, with short-term investments contributing to the

highest percentage change, an increase of 141.17%.

  The company's total liabilities also increased by 32.98%, with most of the increases

coming from the remeasurement loss on net defined benefit plan - net of tax.

 Lastly, the owner's equity considerably increased by 6.71%. The increase in owner's

equity implies an increase in Jollibee Foods Corporation's owner's residual interest

over the firm.

(Amounts in Thousand Pesos)

Jollibee Foods Corporation
Comparative Income Statements
For the years ended December 31
2019 2018 Peso Value Percentage
Change Change
Revenue 179,626,18 161,167,78 18,458,406 11.45%
8 2
Direct Cost 150,257,88 132,420,58 17,837,296 13.47%
1 5
Gross Profit 29,368,307 28,747,197 621,110 2.16%
Less: Expenses 22,867,165 19,488,228 3,378,937 17.34%
Interest Income (Expense) (2,786,641) (2,193,044) (593,597) 27.07%
Equity in Net Earnings (Loses) of Joint 23,384 (86,750) 110,134 -126.96%
Ventures and Associates-Net
Other Income 5,745,671 3,342,528 2,403,143 71.90%
Income before tax 9,483,556 10,321,703 (838,147) -8.12%
Less: Provisions for income Tax 3,060,640 2,680,117 380,523 14.20%
Net Income 6,422,916 7,641,586 (1,218,670) -15.95%

The horizontal analysis of Jollibee Foods Corporation shows the results of operations as

reported in its comparative income statements for years 2018 and 2020. Examining the results

of in the peso value change and the percentage change, we can observe the following:

 Jollibee Foods Corporation's (JFC) revenue have increased by 11.45%

 Direct cost has also increased, sitting at a rate of 13.47%

 Expenses increased by 17.34%

 Interest Expense has noticeably increased by 27.07%

  Equity in Net Earnings of Joint Ventures and Associates has substantially increased

by 126.96%

 JFC's other income increased by 71.90%

 Jollibee Foods Corporation's reported net income has decreased by 15.95%

II. Vertical Analysis

Jollibee Foods Corp.

Comparative Statements of Financial Position

ASSETS 2019 2018

Currents Assets
Cash and cash equivalents 20,892,021 11.16% 23,285,915 15.47%
Short-term investments 2,130,000 1.14% 883,200 0.59%
Receivables and contract assets 5,906,289 3.15% 4,862,744 3.23%
Inventories 9,966,084 5.32% 8,812,174 5.85%
Other current assets 6,725,008 3.59% 4,694,389 3.12%
Total Current Assets 45,619,402 24.36% 42,538,422 28.26%
Noncurrent Assets
Financial assets at fair value 38,202 0.02% 39,842 0.03%
through profit or loss
Available-for-sale financial 0 0.00% 3,512,230 2.33%
assets
Interests in and advances to 6,832,102 3.65% 0 0.00%
joint
ventures, co-venturers and
associates
Property, plant and equipment 32,592,122 17.40% 26,672,549 17.72%
Right-of-use assets 42,907,418 22.91% 36,564,242 24.29%
Investment properties 572,722 0.31% 848,974 0.56%
Trademarks, goodwill and other 50,208,119 26.81% 31,541,825 20.96%
intangible asset
Operating lease receivables 98,749 0.05% 64,304 0.04%
Finance lease receivables 161,934 0.09% 184,800 0.12%
Derivative asset 0 0.00% 82,852 0.06%
Deferred tax assets 4,449,262 2.38% 4,711,794 3.13%
Other noncurrent assets 3,795,974 2.03% 3,751,044 2.49%
Total Noncurrent Assets 141,656,604 75.64% 107,974,456 71.74%
Total assets 187,276,006 100.00% 150,512,878 100.00%
Liabilities and Owner's Equity
Current Liabilities
 Trade payables and other 34,652,065 18.50% 28,716,769 19.08%
current
liabilities and contract liabilities
Income tax payable 391,914 0.21% 263,473 0.18%
Short-term debt 22,180,320 11.84% 0 0.00%
Current portion of:
Lease liabilities 7,036,754 3.76% 5,743,062 3.82%
Long-term debt 3,415,975 1.82% 4,892,102 3.25%
Liability for acquisition of 2,800 0% 11,238 0.01%
a
Business
Total Current Liabilities 10,455,529 5.58% 39,626,644 26.33%
Noncurrent Liabilities
Noncurrent portion of:
Lease liabilities 40,270,650 21.50% 34,887,727 23.18%
Long-term debt 19,179,748 10.24% 21,372,251 14.20%
Liability for acquisition of a 0 0% 2,907 0.00%
Business
Pension liability 2,221,320 1.19% 1,320,646 0.88%
Derivative liability 58,241 0.03% 0 0.00%
Provisions 825,109 0.44% 825,109 0.55%
Deferred tax liabilities - net 4,759,233 2.54% 3,481,497 2.31%
Total Noncurrent Liabilities 67,314,301 35.94% 61,890,137 41.12%
Total Liabilities 134,994,129 72.08% 101,516,781 67.45%
Equity Attributable to Equity
Holders of the Parent Company
Capital stock - net of 1,092,971 0.58% 1,088,036 0.72%
subscription
Receivable
Additional paid-in capital 8,797,360 4.70% 8,638,438 5.74%
Other reserve 1,877,400 1.00% 0 0.00%
Cumulative translation 832,080 0.44% 587,399 0.39%
adjustments of foreign
subsidiaries and interests in
joint
ventures and associates
Remeasurement loss on net (965,391.00) -0.52% (307,995.00) -0.20%
defined benefit plan - net of tax
Unrealized gain on change in 0 0.00% 0 0.00%
fair
value of available-for-sale
financial assets
Comprehensive income (loss) on (58,241.00) -0.03% 82,852 0.06%
derivative liability
Excess of cost over the carrying (1,804,766.00) -0.96% (1,804,766.00 -1.20%
value of non-controlling )
interests
acquired
Retained earnings:
 Appropriated for future 20,000,000 10.68% 20,000,000 13.29%
Expansion
Unappropriated 23,009,145 12.29% 19,391,656 12.88%
52,780,558 28.18% 47,675,620 31.68%
Less cost of common stock held 180,511 0.10% (180,511.00) -0.12%
in treasury
52,600,047 28.09% 47,495,109 31.56%
Non-controlling Interests -0.17% 1,500,988 1.00%
(318,170.00)
Total Equity 52,281,877 27.92% 48,996,097 32.55%
Total Liabilities and Owner's 187,276,006 100.00% 150,512,878 100.00%
equity

The vertical analysis of Jollibee Foods Corporation shows operations as reported in its

balance sheet for years 2018 and 2019. Examining the effects of the peso value change and

the percentage change, we can observe the following:

 Each item has remained relatively constant concerning total assets.

 The trademarks, goodwill, and other intangible asset had the largest proportion of

total assets for both years.

 Noncurrent assets accounted for 71.74% in 2018, while 75.64% in 2019 of total

assets.

 Current assets of 2018 were reported as 28.26%. In contrast, the current assets of the

year 2019 were only reported for 24.36%.

 On the other hand, liabilities accounted for 67.45% of total assets in 2018 and 72.08%

of total assets in 2019. Lastly, the owner’s equity decreased in 2019. 32.55% in the

year 2018, and 27.92% in the year 2019.

(Amounts in Thousand Pesos)

Jollibee Foods Corporation
Comparative Income Statements
For the years ended December 31
2019 2018
Revenue 179,626,188 100.00% 161,167,78 100.00%
2
 Direct Cost 150,257,881 83.65% 132,420,58 82.16%
5
Gross Profit 29,368,307 16.35% 28,747,197 17.84%
Less: Expenses 22,867,165 12.73% 19,488,228 12.09%
Interest Income (Expense) (2,786,641) -1.55% (2,193,044) -1.36%
Equity in Net Earnings (Loses) of Joint 23,384 0.01% (86,750) -0.05%
Ventures and Associates-Net
Other Income 5,745,671 3.20% 3,342,528 2.07%
Income before tax 9,483,556 5.28% 10,321,703 6.40%
Less: Provisions for income Tax 3,060,640 1.70% 2,680,117 1.66%
Net Income 6,422,916 3.58% 7,641,586 4.74%

In Jollibee Foods Corporation's vertical analysis, the following results were observed :

 Direct costs comprised the largest percentage in relation to total sales for both years,

with 83.65% in 2019 and 82.16% in 2018.

 On the other hand, JFC's net income was reported at 3.58% for 2019 and 4.74% in

2018

III.  Ratio Analysis

Recommendations to the Management (Course of Actions to Consider)

The researchers observed from the different financial analysis that Jollibee Foods

corporation is doing well in their business. However, there are some areas wherein they need

to improve. We recommend that the company manage its assets and equities to pay its debts

on time. Lower and manage their operating expenses to avoid loss in net income. We

researchers also suggest that the company hire employees to increase their sales and serve

more customers. The company must maintain their progress and improve where they have

decreased on their assets to avoid losses in the later years.

Conclusion