FIRST FARMS CORPORATION
Consolidated Balance Sheets
December 31, 1995, 1994 and 1993
(in thousand pesos)
1993
1994
ASSETS
Cash
Accounts Receivable
Trade
Others
Inventories
Due from Affiliated Companies
Deferred income tax
Prepaid expenses
Total current assets
Investments in shares of stocks
Property, plant and equipment
Other assets
Total non-current assets
Total assets
LIABILITIES AND STOCKHOLDERS EQUITY
Notes payable
Accounts payable and accrued expenses
Acceptances payable
Dividends payable
Current Portion of long term debt
Income tax payable
Due to affiliated companies
Total current liabilities
Long term debt, net of current portion
Cash bond deposits
Total non-current liabilties
Total liabilities
Minority interest
Stockholders' equity
Total liabilities and Stockholders' equity
1995
91,211
116,222
343,573
180,887
22,935
584,400
43,688
293,307
55,462
702,429
26,027
10,922
934,042
13,821
674,046
59,872
747,739
1,681,781
36,120
1,229,567
2,887
737,915
12,400
753,202
1,982,769
474,200
268,223
1,505,746
43,677
2,037
121,722
2,759,178
22,074
1,059,018
58,393
1,139,485
3,898,663
269,550
340,144
240,760
398,567
366,890
349,965
9,236
72,200
34,740
1,089
1,232,687
6,055
41,119
47,174
1,279,861
11,312
691,597
1,982,769
43,200
38,168
3,146
934,968
78,455
37,511
115,966
1,050,934
6,824
624,024
1,681,781
1,061,883
530,636
346,106
2,400
96,696
1,099
2,038,820
2,855
49,023
51,878
2,090,698
9,874
1,798,091
3,898,663
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FIRST FARMS CORPORATION
Consolidated Statements of Income
For the years ended, December 31, 1995, 1994 and 1993
(in thousand pesos)
1993
1994
Net Sales
2,891,656
3,957,039
Cost of Sales and Operating Expenses
2,664,017
3,603,856
Income from operations
227,639
353,183
Other Income (Charges)
Gain on sale of property and Equipment
Interest Expense
(101,769)
(117,928)
Minority Interest
(2,210)
(1,480)
Equity in net loss of Investee company
(3,478)
Miscellaneous
18,848
19,554
Income before income tax
139,028
253,329
Provision for income tax
53,423
105,113
Income before cumulative change in accounting principle
85,605
148,216
Cumulative Change
Net Income
85,605
148,216
1995
5,683,133
5,242,607
440,526
(36,546)
(1,031)
31,146
434,095
155,178
278,917
1,339
280,256
1. Given the financial statements above, compute for the following ratios every year:
a. Liquidity Ratio
b. Quick Ratio
c. Inventory Turn-over ratio
d. Days sales outstanding (Average collection Period)
e. Inventory Conversion Period
f. Payable Deferral Period
g. Return on Equity (Using Du Pont Model)
h. Cash Conversion Period
2. What do these ratios tell you? Relate them to each other and with other data presented on the financial statements.
Site generalizations based on the performance of the company. Is the company in good position?
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FIRST FARMS CORPORATION
Consolidated Statements of Cash flows
For the year ended December 31, 1995, 1994 and 1993
(in thousand pesos)
1993
1994
Cash flow from operating activities
Net income
85,605
148,216
Adjustments
Depreciation
Provision for doubtful accounts
Provision for inventory shrinkage
Provision for retirement benefits
Provision for deferred income tax
Equity in net loss of Investee company
Loss on sale of investments in shares of stocks
Loss (gain) on sale of property and equipment
Gain on sale of other assets
Net changes in operating assets and liabilities
Net cash provided by operating activities
Cash Flow from investing activities
Net additions to property, plant and equipment
Proceeds from sale of stock investments
Additions to stock investments
Proceeds from sale of property and other assets
Decrease in other assets
Increase in minority interest
Net cash used in investing activities
Cash flows from financing activities
Net proceeds from notes payable
Payment of long term debt
Payments of notes payable
Cash dividends
Cash bond deposits received
Proceeds from subscriptions to capital stock
Acquisition of treasury stock
Net cash provided by financing activities
Net increase in cash
Cash, beginning of the year
Cash, end of the year
87,085
280,256
92,251
80,564
6,007
(61)
3,674
(3,702)
(130,774)
115,671
165
3,478
(953)
(101,725)
73,490
(51,698)
(1,080,406)
(719,482)
(401,833)
218
(19,344)
7,426
2,468
(42,200)
(215,093)
5,923
(996)
44,870
2,064
4,488
(158,745)
28,930
(35,475)
129,016
(43,400)
(21,565)
6,369
4,254
(21,669)
3,608
529
(17,486)
13,804
77,406
91,210
68,084
25,011
91,210
116,221
666,516
(73,000)
(3,200)
(50,233)
7,905
1,012,542
(145,307)
1,415,223
227,351
116,221
343,572
(395)
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1995
(45,993)
(1,438)
(468,390)
Case Back Ground
The case is about a leading poultry integrator in the country – First Farms Corporation. First farms is a diversified
company operating as a manufacturer of poultry and aquatic feeds, processed chicken and just recently entered into fast
food business by acquiring franchises of Gulliver’s Chicken and California Chicken. The company grew and picked up since
1990 and is currently planning to expand its operations in 1996.
With optimism, the company is looking into construction of chicken dressing plants and feed mills, to support the
market its projections of increased market share. The construction of dressing plants will double the existing capacity.
Four new feed mills are also being proposed increasing production capacity. The expansion is expected to be financed
with short term notes. With the improved net income and sales, management is concerned because of negative
operating cash flows in 1995 and a sudden decrease in the Return on Equity.
There is a supply glut of chicken – Chicken prices are low because there has excess supply in the market. Another
consideration is the industry has high input and operating cost. International agreements has been signed by the
Philippines to lower trade barriers, thus imported chicken is expected to flow to the country in 1-2 years time.
Case Back Ground
The case is about a leading poultry integrator in the country – First Farms Corporation. First farms is a diversified
company operating as a manufacturer of poultry and aquatic feeds, processed chicken and just recently entered into fast
food business by acquiring franchises of Gulliver’s Chicken and California Chicken. The company grew and picked up since
1990 and is currently planning to expand its operations in 1996.
With optimism, the company is looking into construction of chicken dressing plants and feed mills, to support the
market its projections of increased market share. The construction of dressing plants will double the existing capacity.
Four new feed mills are also being proposed increasing production capacity. The expansion is expected to be financed
with short term notes. With the improved net income and sales, management is concerned because of negative
operating cash flows in 1995 and a sudden decrease in the Return on Equity.
There is a supply glut of chicken – Chicken prices are low because there has excess supply in the market. Another
consideration is the industry has high input and operating cost. International agreements has been signed by the
Philippines to lower trade barriers, thus imported chicken is expected to flow to the country in 1-2 years time.
Case Back Ground
The case is about a leading poultry integrator in the country – First Farms Corporation. First farms is a diversified
company operating as a manufacturer of poultry and aquatic feeds, processed chicken and just recently entered into fast
food business by acquiring franchises of Gulliver’s Chicken and California Chicken. The company grew and picked up since
1990 and is currently planning to expand its operations in 1996.
With optimism, the company is looking into construction of chicken dressing plants and feed mills, to support the
market its projections of increased market share. The construction of dressing plants will double the existing capacity.
Four new feed mills are also being proposed increasing production capacity. The expansion is expected to be financed
with short term notes. With the improved net income and sales, management is concerned because of negative
operating cash flows in 1995 and a sudden decrease in the Return on Equity.
There is a supply glut of chicken – Chicken prices are low because there has excess supply in the market. Another
consideration is the industry has high input and operating cost. International agreements has been signed by the
Philippines to lower trade barriers, thus imported chicken is expected to flow to the country in 1-2 years time.
This study source was downloaded by 100000863359324 from CourseHero.com on 03-10-2023 20:36:03 GMT -06:00
https://www.coursehero.com/file/56927399/Fin3A-Midterm-Activity1doc/
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