JFC 2005 Financial Statement Analysis

The Return on Equity is a measure of cleverness with which a lodge employs owners capital. P 0.195 is earned for every peso of invested equity capital or there is 19.5% return to owners on their investment. The ROE is composed of a crushed profit margin, naughty addition disturbance rate and utmost financial leverage. Jollibee has a low profit margin (0.0581) in relation to its profane addition turnover (1.75). The profit margin reflects that for separately peso of gross sales, 5.8% goes to the company as profits. The asset turnover, on the other hand, conveys that 174.9% of sales were generated from each dollar of assets employed. From the low profit margin and broad(prenominal) asset turnover, it can be deduced that Jollibee adds little value to their product. This is bare in their arrangement-at-the-counter, pay-as-you lay, and self-service scheme. Hence, their products require fewer assets. The company has a high financial leverage (1.92), which means that i t used a bear-sized proportion of debt relative to its equity to finance the business. Jollibee has an inventory turnover of 16.9 and its typical item sits in inventory about 22 days before being sold. The average time obey between sale and receipt of cash from sale is 22 days. It has a current ratio of 1.07 and an acid-test ratio of 0.853. The company has a times liaison earned ratio of 48.2. It is able to peer the annual cash payment the debt requires. It can be inferred devour the inventory turnover, collection period, current ratio, acid-test ratio and times touch earned ratio that Jollibee has a highly predictable and unceasing operating cash flow. Jollibees major product is victuals, a prefatory need, coupled with its reputation of being one of the giants in the food service industry; the company therefore faces a high degree of... If you want to get a full essay, order it on our website: OrderEssay.net

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