I.

Ratios Ussed to Evaluate Shore-Term Financial Position (Short-Term Solvency and Liquidity)

Name Formula
Total Current Assets
1. Current Ratio
Total Current Liabilities

Total Quick Assets*

2. Acid-test ratio or quick ratio
Total Current Liabilities

3. a) Working Capital to Total Working Capital

Assets Total Assets

b) Working Capital Current Assets Less Current Liabilities

Cash + Marketable Securities + Cash Flow from operating Activities

4. Cash Flow Liquidity Ratio
Current Liabilities

Quick Assets
5. Defensive interval ratio
Projected Daily Operational Expenses

II. Ratio Used to evaluate Asset Liquidity and Management Efficiency

Name Formula
Net credit Sales *
1. a. Trade receivable turnover
Average trade receivables (net)

b. Average Collection period 360 days

or number of day's sales
uncollected Receivable turnover

or

Accounts Receivable
Net Sales / 360

2. Inventory Turnover
Cost of goods sold
a. Merchandise turnover
Average Merchandise Inventory

Cost of goods sold

b. Finished goods inventory
Average Finished goods Inventory

Cost of goods manufactured

c. Finished goods inventory
Average Goods-in Process Inventory

Raw Materials Used

d. Raw materials turnover
Average Raw Materials Inventory

360 days
e. Day supply in inventory
Inventory turnover
 Net Sales
3. Working Capital turnover
Average Working Capital

4. Percent of each current Amount of each current asset item

asset to total current assets Total Current Assets

Cost of Sales + Operating Expenses + Income Taxes + Other Expenses ( net)

5. Current assets turnover (excluding depreciation and amortization)
Average Current Assets

Net purchases
6. Payable turnover
Average Accounts Payable

7. Operating Cycle Average Conversion period of inventories + Average collection period of

receivable +Days Cash

Average Cash Balance

8. Days Cash
Cash operating costs +360 days

Net cash from operating activities - Cash used for investing activities and
9. Free cash flow
Dividends

10. Investment or assets Net Sales

turnover Average Total Investment or Total Assets

11. Sales to fixed assets (plant Net Sales

assets turnover) Average fixed assets (net)

Total Assets
12. Capital Intensity Ratio
Net Sales

III. Ratios Esed to Evaluate Long-Term Financial Position or Stability/Leverage

Name Formula
Total Liabilities
1. Debt Ratio
Total Assets

Total Equity
2. Equity ratio
Total Assets

Total Liabilities
3. Debt to equity ratio
Total Equity

4. Fixed Assets to long term Fixed Assets (net)

liabilities Total Long-term Liabilities

Fixed Assets (net)

5. Fixed Assets to total equity
Total equity

Fixed Assets (net)

6. Fixed Assets to total assets
 6. Fixed Assets to total assets
Total Assets

7. Book value per share of Ordinary shareholders' equity

ordinary shares No. of outstanding ordinary shares

Net income before interest and taxes

8. Times interest earned
Annual interest charges

9. Times preferred dividend Net Income After Taxes

requirement earned Preferred Dividend Requirement

10. Times fixed charges Net Income Before Taxes and Fixed Charges
earned Fixed Charges (Rent + interest _ sinking fund payment before taxes*)

IV. Ratios Used to Measure Profitability and Returns to Investors

Name Formula
Gross Profit
1. Gross profit margin
Net Sales

Operating profit
2. Operating profit margin
Net Sales

3. Net profit margin (Rate of Net Profit

return on net sales) Net Sales

Cash Flow for operating activities

4. Cash Flow Margin
Net Sales

5.Rate of return on assets Net Profit

(ROA)* Average Total Assets

Alternative Formula
Asset turnover x Net Profit Margin

Net Income
6. Rate of reurn on equity **
Average Ordinary Equity

Net income less preference dividend requirement

7. Earnings per share
Average ordinary shares outstanding

Market Value per Share of Ordinary Shares

8. Price/Earinges ratio
Earnings per share of Ordinary Shares

Dividend per share

9. Dividend Payout
Earning per share

Annual Dividends per share

10. Dividend Yield
Market Value per share of Ordinary Shares

Dividends Paid/Declared
11. Dividend per share
11. Dividend per share
Ordinary shares outstanding

12. Rate of return on average Net Income

current assets Average current assets

13. Rate of return per Rate of return on Ave. Current Assets

turnover of current assets Current Assets Turnover
hort-Term Solvency and Liquidity)

Formula
Total Current Assets
Total Current Liabilities

Total Quick Assets*

Total Current Liabilities

Working Capital
Total Assets

Current Assets Less Current Liabilities

ketable Securities + Cash Flow from operating Activities

Current Liabilities

Quick Assets
Projected Daily Operational Expenses

Formula
Net credit Sales * * or Net Sales if net credit sales is not available
Average trade receivables (net)

360 days
Receivable turnover

or

Accounts Receivable
Net Sales / 360

Cost of goods sold

Average Merchandise Inventory

Cost of goods sold

Average Finished goods Inventory

Cost of goods manufactured

Average Goods-in Process Inventory

Raw Materials Used

Average Raw Materials Inventory

360 days
Inventory turnover
 Net Sales
Average Working Capital

Amount of each current asset item

Total Current Assets

Operating Expenses + Income Taxes + Other Expenses ( net)

(excluding depreciation and amortization)
Average Current Assets

Net purchases
Average Accounts Payable

ersion period of inventories + Average collection period of

receivable +Days Cash

Average Cash Balance

Cash operating costs +360 days

operating activities - Cash used for investing activities and

Dividends

Net Sales
Average Total Investment or Total Assets

Net Sales
Average fixed assets (net)

Total Assets
Net Sales

Stability/Leverage

Formula
Total Liabilities
Total Assets

Total Equity
Total Assets

Total Liabilities
Total Equity

Fixed Assets (net)

Total Long-term Liabilities

Fixed Assets (net)

Total equity

Fixed Assets (net)

 Total Assets

Ordinary shareholders' equity

No. of outstanding ordinary shares

Net income before interest and taxes

Annual interest charges

Net Income After Taxes

Preferred Dividend Requirement

Net Income Before Taxes and Fixed Charges

s (Rent + interest _ sinking fund payment before taxes*)

Formula
Gross Profit
Net Sales

Operating profit
Net Sales

Net Profit
Net Sales

Cash Flow for operating activities

Net Sales

Net Profit
Average Total Assets

Asset turnover x Net Profit Margin

Net Income
Average Ordinary Equity

t income less preference dividend requirement

Average ordinary shares outstanding

Market Value per Share of Ordinary Shares

Earnings per share of Ordinary Shares

Dividend per share

Earning per share

Annual Dividends per share

Market Value per share of Ordinary Shares

Dividends Paid/Declared
 Ordinary shares outstanding

Net Income
Average current assets

Rate of return on Ave. Current Assets

Current Assets Turnover
 *Cash +Marketable Securities + Accounts Receivable

* or Net Sales if net credit sales is not available

 Sinking fund payment after taxes
=
*Sinking fund payment before taxes 1-tax rate

* If there is interest - bearing debt, rate of return on assets is computed as follows

Net income + [(Interest expense (1-taxrate)] A measure of the productivity of assets
--
Average Total Assets regardless of how the assets are financed.

** May also be computed as follows:

ROE= Return Assets x Equity Multiplier
1
Equity Multiplier = Equity Ratio
 EBC Enterprises, Inc.
Statement of Financial Position at December 31, 2021 and 2020
(in thousands)

2021 2020
Assets
Current Assets
Cash ₱ 2,030.50 ₱ 1,191.00
Marketable securities 2,636.00 4,002.00
Accounts receivable 4,704.00 4,383.50
Allowance for doubtful accounts - 224.00 - 208.50
Inventories 23,520.50 18,384.50
Prepaid expenses 256.00 379.50
Total Current Assets ₱ 32,923.00 ₱ 28,132.00

Property, Plant and Equipment

Land 405.50 405.50
Buidings and leasehold improvements 9,136.50 5,964.00
Equipment 10,761.50 6,884.00
20,303.50 13,253.50
Less Accumulated depreciation and amortization - 5,764.00 - 3,765.00
14,539.50 9,488.50
Other Assets 186.50 334.00
TOTAL ASSETS ₱ 47,649.00 ₱ 37,954.50

Liabilities and Equity

Current Liabilities
Accounts payable ₱ 7,147.00 ₱ 3,795.50
Notes payable -banks 2,807.00 3,006.00
Current maturities of long-term debt 942.00 758.00
Accrued liabilities 2,834.50 2,656.50
Total Current Liabilities ₱ 13,730.50 ₱ 10,216.00

Deferred Income Taxes 421.50 317.50

Long-Term Debt 10,529.50 8,487.50
 Total Liabilities 24,681.50 19,021.00

Equity
Ordinary shares, par value P1, authorized 10,000,000 shares,
issued, 2,297,000 shares in 2021 and 2,401,500 shares in
2020 ₱ 2,401.50 ₱ 2,297.00
Additional paid-in capital 478.50 455.00
Retained earnings 20,087.50 16,181.50
Total Equity 22,967.50 18,933.50
TOTAL LIABILITIES AND EQUITY ₱ 47,649.00 ₱ 37,954.50

1.00 1.00
 EBC Enterprises, Inc.
Statement of Financial Performance and Retained Earnings
For the Years Ended December 31, 2021, 2020 and 2019
(in thousands)

2021 2020 2019

Net Sales ₱ 107,800.00 ₱ 76,500.00 ₱ 70,350.00
Cost of goods sold 64,682.00 45,939.50 40,803.00
Gross profit 43,118.00 30,560.50 29,547.00

Selling and administrative expenses 16,332.00 13,191.00 12,749.00

Advertising 7,129.00 5,396.00 4,770.50
Lease payments 6,529.00 3,555.50 3,633.50
Depreciation and amortization 1,999.00 1,492.00 1,250.50
Repairs and maintenance 1,507.50 1,023.00 1,515.50
Total 33,496.50 24,657.50 23,919.00
Operating Profit 9,621.50 5,903.00 5,628.00

Other income (expenses)

Interest income 211.00 419.00 369.00
Interest expense - 1,292.50 - 1,138.50 - 637.00
Earnings before income taxes 8,540.00 5,183.50 5,360.00

Income taxes 3,843.00 2,228.50 2,412.00

Net Income 4,697.00 2,955.00 2,948.00
Earnings per common share ₱ 2.00 ₱ 1.29 ₱ 1.33

Statement of Retained Earnings

Retained Earnings at beginning of year 16,181.50 14,157.50 12,130.00
Net income 4,697.00 2,955.00 2,948.00
Cash dividends (2021 - P0.33 per share, 2020 - P0.41- 791.00 - 931.00 - 920.50
Retained earnings at end of year ₱ 20,087.50 ₱ 16,181.50 ₱ 14,157.50
 EBC Enterprises, Inc.
Statement of Cash Flows for the Years Ended December 31, 2021 and 2020
(in thousands)

2021 2020
Cash Flow from Operating Activities - Direct Method
Cash received from customers ₱ 107,495.00 ₱ 74,830.50
Interest Received 211.00 419.00
Cash paid to suppliers for inventory - 66,466.50 - 49,968.00
Cash paid to employees (S&A expenses) - 16,332.00 - 13,191.00
Cash paid for other operating expenses - 14,864.00 - 10,675.00
Interest paid - 1,292.50 - 1,138.50
Taxes paid - 3,739.00 - 2,160.50
Net cash provided (used by operating activities 5,012.00 - 1,883.50

Cash Flow from Investing Activities

Additions to property, plant and equipment - 7,050.00 - 2,386.50
Other investing activities 147.50 -
Net cash provided (used) by investing activities - 6,902.50 - 2,386.50

Cash Flow from Financing Activities

Sales of ordinary shares 128.00 91.50
Increase (decrease) in short-term borrowings
(includes current maturities of long-term debt) - 15.00 927.00
Assitions to long-term borrowings 2,800.00 3,941.00
Reductions of long-term borrowings - 758.00 - 796.50
Dividends paid - 791.00 - 931.00
Net cash provided (used) by financing activities 1,364.00 3,232.00

Increase (decrease) in cash & marketable securities -₱ 526.50 -₱ 1,038.00

Supplementary Schedule
Cash Flow from Operating Activities - Indirect Method
Net Income 4,697.00 2,955.00
 Noncash revenue and expenses included in net income
Depreciation 1,999.00 1,492.00
Deferred income taxes 104.00 68.00
Cash provided (used) by current assets and liabilities
Accounts receivable - 305.00 - 1,669.50
Inventories - 5,136.00 - 3,503.00
Prepaid expenses 123.50 147.50
Accounts payable 3,351.50 - 525.50
Accrued liabilities 178.00 - 848.00
Net cash provided (used) by operations ₱ 5,012.00 -₱ 1,883.50

Additional information:
Market price per share - 2021 P30; 2020 P17