DMCI Holdings Inc.
For a period of five years, the 2020 growth rate of DMCI Holdings Inc. resulted in 11.54
percent of the company's annual historical growth. This rate was applied to the financial
statements elements that were not designed to accomplish a particular purpose. However, this
was mostly successful in estimating the company's 2020 sales, which amounted to
97,888,865.90. For the company's outflows, such as Operating Costs, Accounts Receivable, and
Inventories, the amounts for 2019 were also reduced by growth in 2019. This theory was used to
assess the expected sum of decline in the accounts referred to. This method is meant to improve
the company's productivity by paying down expired inventories and introducing shortened
terminology for receiving consumer receivables. These accounts were then paid for the
company's cash and cash equivalent deficit, which was acted to create other cash flows for the
company. In order to secure the costs and obligations of the businesses that would have to be
paid, these inflows will then be used, mainly to cover the ongoing ones.
Consequently, there was a rise in the company's long-term debt to provide further
funding to the company. As the company's leverage ratio for the year 2020 was 0.38, this
suggests that DMCI Holdings Inc. depends more on its equity as its means of finance than on
purchasing or engaging in interest-bearing debt. Compared to their 2019 debt ratio, their ratio for
2020 significantly deteriorated. This outcome is preferable to future and existing buyers because
this means a lower risk for the venture.
The firm's other ratios are also to be observed, which are mostly near to their respective
industry averages. For the inventories ratio to debt ratio, the firm showed a little excess to its
average ratio. Since the debt ratio has a little excess, the company has a high risk since excessive
debt can lead to a heavy debt repayment burden. Usually, a high inventory ratio is preferable
because more sales are generated from a certain amount of inventory. A high inventory ratio
could sometimes result in lost sales, as there is insufficient inventory to meet demand. The
operating cost ratio and receivable ratio are below the industry average, which means it is
favourable for the company. A low ratio indicates that the company is effectively cutting back on
its expenses while creating more sales.
DMCI Holdings Inc. should then limit the outflows to produce further inflows to maintain a
larger volume of investment to be returned to the corporation or to fund the company's costs and
debts. In order to produce more inflows than the prediction, the entity can also intend a more
strategic direction. This will also make it easier for the company to be agile and open up more
possibilities to increase its competitiveness and develop its development for years to come.