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San Beda College

College of Art and Sciences


Department of Accountancy

Financial Statement Analysis for


Tropical Blooms Florist
2013 and 2014

Submitted by:
Michelle G. De Guzman
III- HAC

Submitted to:
Ms. Cristy Joy Allauigan

TROPICAL BLOOMS FLORIST


Horizontal Analysis- Statement of Financial Position
December 31
Increase or (Decrease)
2014

2013

in Amount

Cash and cash equivalents P 548,767.63 P 439,323.72


Accounts receivable trade

in Percentage

109,443.91

24.91%

312,660.50

294,855.70

17,804.80

6.04%

382,209.50

414,109.50

(31,900)

(7.70%)

95,348.71

8.30%

(58,503.70)

(40.77%)

153,852.41

15.31%

95,348.71

8.30%

and prepayments
Property and equipment
Total Assets

P 1,243,637.63 P 1,148,288.92

Trade and other payables

P 85,002.23

Penarroyo,Capital

1,158,635.40

Total Liabilities and

P 143,505.93
1,004,782.99

P 1,243,637.63 P 1,148,288.92

Capital

TROPICAL BLOOMS FLORIST


Horizontal Analysis- Income Statement
For the years ended December 31
Increase or (Decrease)
2014
Revenues

2013

in Amount

in Percentage

P 2,420,314.90 P 3,408,671.17 (988,356.27)

(29%)

Cost of Revenues

1,331,173.20

2,095,202.70 (764,029.50)

(36.47%)

Gross Profit

1,089,141.70

1,313,468.47 (224,326.77)

(17.08%)

824,658.29

972,702.97 (148,044.68)

(15.22%)

Other Operating Expenses

Income tax payable


Net Income

10,631.00
P 253,852.41

14,104.00

(3,473.00)

(24.62%)

P 326,661.50

(72,809.09)

(22.29%)

TROPICAL BLOOMS FLORIST


Vertical Analysis- Statement of Financial Position
December 31
2014

2013

2014

2013

Cash and cash equivalents P 548,767.63 P 439,323.72

44.13%

38.26%

Accounts receivable trade

312,660.50

294,855.70

25.14%

25.68%

382,209.50

414,109.50

30.73%

36.06%

100.00%

100.00%

6.83%

12.50%

93.17%

87.50%

and prepayments
Property and equipment
Total Assets

P 1,243,637.63 P 1,148,288.92

Trade and other payables

P 85,002.23

Penarroyo,Capital

1,158,635.40

Total Liabilities and

P 143,505.93
1,004,782.99

P 1,243,637.63 P 1,148,288.92

100.00%

100.00%

2014

2013

Capital

TROPICAL BLOOMS FLORIST


Vertical Analysis- Income Statement
For the years ended December 31
2014
Revenues

2013

P 2,420,314.90 P 3,408,671.17

100.00%

100.00%

Cost of Revenues

1,331,173.20

2,095,202.70

Gross Profit

1,089,141.70

1,313,468.47

45.00%

38.53%

824,658.29

972,702.97

34.07%

28.54%

Other Operating Expenses


Profit before Income taxes
Income tax payable
Net Income

264,483.41

340,765.50

10,631.00
P 253,852.41

(55.00%) (61.47%)

10.93%

9.99%

14,104.00

0.44%

0.41%

P 326,661.50

10.49%

9.58%

Ratio Analysis

Gross Profit Ratio:


2014
1,089,141.70/2,420,314.90= 45%

2013
1,313,468.47/ 3,408,671.17= 38.53%

Operating Ratio:
2014
264,483.41/2,420,314.90= 10.93%

2013
340,765.50/3,408,671.17= 9.99%

Return on Sales:
2014
253,852.41/2,420,314.90= 10.49%

2013
326,661.50/3,408,671.17= 9.58%

All ratios show that 2014 is more efficient in its control and management of costs and
expenses than in 2013, making it more a profitable year.
Return on Average Assets:
2014
253,852.41/1,817,782.09= 13.96%

2013
326,661.50/1,148,288.92= 28.45%

Average Total Assets:


(1,243,637.63+1,148,288.92)/2= 1,817,782.09

1,148,288.92

Assets in 2013 are being used profitably by the business than in 2014.
Rate of Return on Equity:
2014
253,852.41/1,661,026.90= 15.28%

2013
326,661.50/1,004,782.99= 32.51%

Average Capital:
(1,158,635.40+1,004,782.99)/2= 1,661,026.90

1,004,782.99

This means that the shop in 2013 earned 32.51% on owners investment compared to
15.28% in 2014. The shop was earning a better profit for the owner in 2013.
Working Capital:
2014
P 861,428.13-P 85,002.23= P 776,425.90

2013
P 734,179.42-P 143,505.93= P 590,673.49

Working capital was higher in 2014 at P 776,425.90 against P 590,673.49 in 2013. It


supports our claim in the horizontal analysis of growth or building up of assets.
Current Ratio:
2014
861,428.13/85,002.23= 10.13:1

2013
734,179.42/143,505.93= 5.12:1

This means that the business has P 10.13 of current assets to pay for peso of current
liability in 2014, lower at P 5.12 of currents assets available to pay for a peso of current
liability in 2013. Both periods show that the company is very liquid.
Acid test Ratio:
2014
651,288.03/85,002.23= 7.66:1

2013
563,949.22/143,505.93= 3.93:1

This means that the business has P 7.66 quick assets in 2014 to pay for a peso of
current liability, whereas in 2013 it was lower at P 3.93 for a peso of current liability.
Based on its quick assets the business is very liquid in both years.
Receivable turnover:
2014
2,420,314.90/113,572.95= 21.31 times

2013
3,408,671.17/124,625.50= 27.35 times

Average Receivable:
2014
(102,520.40+124,625.50)/2= 113,572.95

2013
124,625.50

Collection period:
2014
365/21.31 times= 17 days

2013
365/27.35 times= 13 days

Based on the turnover rate and days collection period, the business was more efficient
in collecting their receivables in 2013 because the turnover is higher at 27.35 times and
the collection period is lower at 13 days.
Inventory turnover:
2014
1,331,173.20/170,185.15= 7.82 times

2013
2,095,202.70/150,230.20= 13.95 times

Holding period:
2014

2013

365 days/7.82 times= 47 days

365 days/13.95 times= 26 days

Average Receivable:
2014

2013

(190,140.10+150,230.20)/2= 170,185.15

150,230.20

It shows that the business took 47 days in 2014 to dispose the goods the business was
more efficient in moving out the goods in 2013.
Asset turnover:
2014
2,420,314.90/1,817,782.09= 1.33 times

2013
3,408,671.17/1,148,288.92= 2.97 times

Average Total Assets:


(1,243,637.63+1,148,288.92)/2= 1,817,782.09

1,148,288.92

Based on the turnover rates, the business was more efficient in 2013 than in 2014 when
assets were used 2.97 times while in 2014 the assets were used 1.33 times.
Debt ratio:
2014
85,002.23/1,243,637.63x100= 6.83%

2013
143,505.93/1,148,288.92x100= 12.50%

The ratio indicates the business is leaning on borrowed funds at 6.83%, and more so in
2013 at 12.50%.
Equity ratio:
2014
1,158,635.40/1,243,637.63x100= 93.17%

2013
1,004,782.99/1,148,288.92x100= 87.50%

This means that investors rather than debt are currently funding more assets. 93.17
percent of the company's assets in 2014 are owned by shareholders and not creditors,
this is a healthy ratio.