2GO GROUP INC, AND SUBSIDIARIES

RATIO ANALYSIS
December 31, 2015 and 2014

I. Liquidity Ratio
2015 2014 Change Explanation

Current Ratio = Current Assets 8,162,101 7,161,250 Not Favorable. Eventhough a decrease of .01 is immaterial, the company still has a
= 1.15 = 1.16 -0.01 lower current ratio compared to last year and it is generally a low Current Ratio
Current Liabilities 7,109,241 6,170,550 compared to other companies in the same field of business. The ratio during 2015
decreased by .01 due to an increase in current liabilities of P938,691, this is
because of the increase in notes payable obtained by the company from local
banks and only P51.8 million out of the P78.2 million provision for cargo losses and
Calculated by dividing current assets to its current liabilities. Indicates the extent to which current liabilities can be covered by current assets that can be damages were payed. In the case of the current assets, compared to 2014 the
converted to cash in the near future. A high current ratio means strong liquidity position, too much old inventory that must be written off, and old accounts 2015 portion has a greater amount.
receivable that may turn to bad debts or too much cash, inventories, and other CA which shows assets are not managed well.
Description

2015 2014 Change Explanation

Quick Ratio = Current Assets-Inventories 8,162,101 - 938,553 7,161,250 - 877,542 Not Favorable. The same explanation of Current Ratio can be used to the Quick
= 1.02 = 1.02 0.00 Ratio of the company however with the exclusion ot the inventories in its current
Current Liabilities 7,109,241 6,170,550 assets since it is the least liquid asset. In addition to this, both years have the same
ratios due to rounding-up changes. However, it is also evident that the company
has been holding a large amount of inventory which resulted to a net inventory
right down of P54.7 for the year of 2015.
Description calculated by deducting inventories from current assets then divided to current liabilities. Inventories are the least liquid in CA
wherein losses usually occur. Quick ratio measure the firm’s ability to pay off current liabilities w/out relying to sale of inventories.

II. Activity Ratios

calculated by dividing sales by inventory. 2015 2014 Change Explanation

Inventory Turnover = Sales 16,418,049 14,426,995 Favorable. The inventory part of the company is partially composed of materials,
= 17.49 = 16.44 1.053 parts, supplies and fuel and the other half is composed of trading goods. This ratio
Inventories 938,553 877,542 indicates that the company has been utilizing its inventories well for the year of
2015 since half of its sales or revenue for 2015 or P8,487,541 is from its shipping
operations which clearly uses the aforementioned inventories and P7,930,508 for
its nonshipping operations like distributions, port services and the like.
calculated by dividing sales by inventory. Commonly measures the activity, or liquidity, of a firm’s inventory

Description

2015 2014 Change Explanation

Favorable. Compared to 2014's AR Turnover ratio, it has increased by .25 and

Accounts Receivable = Revenue 16,418,049 14,426,995 judging from the amount of inventories and revenue for both years, the
= 3.89 = 3.64 0.25
Turnover Ave. Accounts Receivable 4,223,946 3,961,457 collectibility of AR in 2015 is a tad bit higher. However, basing from the average
collection period below, the AR turnover of the company is quite low.

Description Measures how much or how many times AR is turned over during the year. This indicates how often, on average, receivables revolve—that is, are received and
collected during the year.

2015 days 2014 days Change Explanation

Not favorable. Eventhough a decrease of seven days from the average collection
period is evident from the year 2015 when compared to 2014, (3 days is 33 days
Average Collection = Average Accounts Receivable 4,223,946 3,961,457 past than the company's term of 30-60 days for trade receivables. This indicates
= 93.91 = 100.22 -6.32
Period Revenue /365 16,418,049.00 14,426,995 that 2GO's customers or those who owe them are not paying their bills on time.
This deprives the the company of funds that could be used to pay off debt or some
365 365 other type of costly capital. This may also indicate that if some customers are
paying on or before the term, some might be paying late wherein these customers
Description calculated by dividing AR by average sales/day. It indicates the average length of time the firm must wait after making a sale before it receives cash. The average often default and their receivables end up as bad debts, which for the year 2015 is
amount of time needed to collect accounts receivable. Is useful in evaluating credit and collection policies. P442,787. Uncollectible accounts may also be the reason as to why the liquidity
ratios are quite low.

2015 2014 Change Explanation

Not Favorable. It is slightly below its previous year's Fixed Asset Ratio which means
Fixed Asset = Sales 16,418,049.0 = 14,426,995 = that yes, the company has increased the amount of its fiexed assets however the
2.58 2.67 -0.09
Turnover Net Fixed Assets 6,353,750.0 5,403,570 company has not been doing good utilizing it increase it sales for the current
year(2015)

Description calculated by dividing sales by total assets. Measures the turnover of all the firm’s assets. This ratio indicates how well the firm uses its assets to generate sales.

2015 2014 Change Explanation

Not Favorable. The .01 change is not favorable since it is a low variation. The 2015
Total Asset Turnover = Sales 16,418,049.0 = 1.04 14,426,995 = ratio has not changed and if so, it is just a small variation from last year's ratio. This
1.04 0.01
Total Asset 15,742,401.0 13,916,256 indicates that the firm has not been utilizing its assets both current and non
current since its current ratio was below that of the previous years and its fixed
asset turnover is also slightly below that of last year's (2014).

Description calculated by dividing sales by total assets. Measures the turnover of all the firm’s assets. This ratio indicates how well the firm uses its assets to generate sales.

Solutions:
2015 Ave. AR 2014 Ave. AR

Average AR = AR 2015+AR2014 4,474,797 3,973,094 Average AR = AR 2014+AR2013 3,973,094 3,949,819

2 2 2 2

= 4223946 = 3961457