Professional Documents
Culture Documents
1
I. COMPANY PROFILE
Historical Background
ABS-CBN Corporation (ABS-CBN or the Company) traces its roots from Bolinao
Electronics Corporation (BEC), established in 1946 as an assembler of radio transmitting equipment. In
1952, BEC adopted the business name Alto Broadcasting System (ABS) and 7 setting up the countrys
first television broadcast by 1953. On September 24, 1956, Chronicle Broadcasting Network (CBN),
owned by Don Eugenio Lopez Sr. of the Lopez family, was organized primarily for radio broadcasting.
In 1957, Don Eugenio Lopez Sr. acquired ABS and on February 1, 1967, the operations of ABS and
CBN were integrated and BEC changed its corporate name to ABS-CBN Broadcasting Corporation. On
August 16, 2010, the Philippine Securities and Exchange Commission (SEC) approved the change of
Companys corporate name to ABS-CBN Corporation. This change is a reflection of the Companys
diversified businesses in existing and new industries.
ABS-CBN achieved many firsts since it started the television industry in the country in 1953. However,
with the imposition of martial law in September 1972, ABS-CBN ceased operations as the government
forcibly took control of the Company. ABS-CBN resumed commercial operations in 1986 after the
People Power or EDSA revolution.
Recovery after 14 years of absence was difficult as resources were scarce. Nevertheless, through
relentless effort, ABS-CBN recaptured leadership in the Philippine television and radio industries by
1988. During the 1990s and the early part of the new millennium, the Company expanded and ventured
into complementary businesses in cable TV, international distribution, mobile services, and magazine
publishing among others.
Corporate Information
ABS-CBN Corporation (ABS-CBN or Parent Company) was incorporated in the Philippines
on July 11, 1946. On July 27, 1994, the Philippine Securities and Exchange Commission (SEC)
approved the extension of the corporate term of the Parent Company for another 50 years. The Parent
Companys core business is television and radio broadcasting. Its subsidiaries and associates are
involved in the following related businesses: cable and direct-to-home (DTH) television distribution
2
and telecommunications services overseas, movie production, audio recording and distribution,
video/audio post production and film distribution. Other activities of the subsidiaries include
merchandising, internet and mobile services, publishing, money remittance and theme parks.
The Parent Company is 79%-owned by Lopez, Inc. a Philippine entity, the ultimate Parent
Company.
In 2013, Capital International Private Equity Fund VI, L.P. (CIPEF) subscribed to P2.5 billion
worth of new Philippine Depository Receipts (PDRs) issued by ABS-CBN Holdings Corporation (ABSCBN Holdings) which in turn subscribed to the same number of newly issued common shares of the
Parent Company. Lopez, Inc. also subscribed to 34,702,140 common shares and 987,130,246 preferred
shares of the Parent Company in 2013. After the subscription, Lopez, Inc.s economic interest in the
Parent Company decreased to 56% while its voting rights increased from 57% to 79%.
The common shares of ABS-CBN were listed beginning July 8, 1992 and have been traded in
the Philippine Stock Exchange (PSE) since then.
The registered office address of the Parent Company is ABS-CBN Broadcast Center, Sgt.
Esguerra Avenue corner Mother Ignacia St., Quezon City.
The accompanying consolidated financial statements were approved and authorized for issuance by the
Board of Directors (BOD) on March 5, 2015.
VERTICAL ANALYSIS
2013
HORIZONTAL ANALYSIS
2014
Increase/(Decrease)
Amount
Amount
Amount
19,331,90
8
13,287,24
5
57.9
2
39.8
1
1.73
5
0.53
8
18,879,94
6
14,029,68
4
56.28
5
41.82
5
-451,962
-2.337906843
742,439
5.587606761
351,528
1.048
0.842
1
-227,612
-39.30172324
102,859
57.26765065
100
165,724
0.496508109
11,007,656
32.82
-491,709
-4.275966543
9,045,527
26.97
192,087
2.169631239
201,993
13,288,45
2
0.602
-128,036
-38.79537859
39.62
593,382
4.674113652
10,113,904
30.15
499,548
5.195855032
1,165,313
3.474
348,394
42.64731265
94,438
28.8
2.44
7
0.28
3
153,968
0.459
59,530
63.03606599
-145,500
-0.44
-31,704
-0.09
113,796
-78.21030928
-12,397
-0.04
3,283
0.01
15,680
-126.4822134
1.945
140,030
27.33241985
REVENUE
Advertising revenue
Sale of services
Sale of goods
Others
PRODUCTION COSTS
579,140
179,611
33,377,90
4
11,499,365
COST OF SERVICES
8,853,440
COST OF SALES
GROSS PROFIT
330,029
12,695,07
0
9,614,356
FINANCE COST
INTEREST INCOME
FOREIGN EXCHANGE GAINS (LOSSES)-net
EQUITY IN NET EARNINGS (LOSSES) OF
ASSOCIATES AND VENTURES
LOSS ON SALE OF INVESTMENTS
OTHER INCOME
INCOME BEFORE INCOME TAX
PROVISION FOR INCOME TAX
NET INCOME
816,919
100
34.4
5
26.5
2
0.98
9
38
282,470
33,543,62
8
512,322
1.53
5
652,352
2,712,658
8.13
2,787,134
8.31
74,476
2.745499064
684,311
2.05
756,998
2.257
72,687
10.62192483
2,028,347
6.08
2,030,136
6.05
1,789
0.088199899
(Amounts in Thousands)
Years Ended December 31
VERTICAL ANALYSIS
2013
HORIZONTAL ANALYSIS
2014
Amount
10,616,855
Increase/(decrease)
Amount
Amount
18.2
13,238,377
19.69
2,621,522
24.6921
8,333,761
14.29
10,717,317
15.94
2,383,556
28.6012
1,385,972
2.376
1,315,987
1.96
-69,985
-5.04952
3,046,886
5.224
3,669,314
5.46
622,428
20.4283
23,383,474
40.09
28,940,995
43.04
5,557,521
23.7669
18,535,905
31.78
20,572,543
30.60
2,036,638
10.9875
5,429,192
9.308
6,465,599
9.62
1,036,407
19.0895
Goodwill
5,288,350
9.066
5,289,956
7.87
1,606
0.03037
219,191
0.376
242,368
0.36
23,177
10.5739
Investment properties
196,916
0.338
198,734
0.296
1,818
0.92324
ASSETS
Current Assets
166,591
0.286
199,874
0.297
33,283
19.9789
2,530,164
4.338
2,858,187
4.251
328,023
12.9645
2,580,033
4.423
2,468,564
3.671
-111,469
-4.32045
34,946,342
59.91
38,295,825
57
3,349,483
9.58465
58,329,816
100
67,236,820
100
8,907,004
15.27
11,332,006
19.43
12,788,120
19.02
1,456,114
12.8496
193,216
0.331
292,053
0.434
98,837
51.1536
448,861
0.77
724,266
1.077
275,405
61.3564
1,345,471
2.307
110,751
0.165
-1,234,720
-91.7686
13,319,554
22.83
13,915,190
20.7
595,636
4.47189
13,334,579
22.86
20,214,484
30.06
6,879,905
51.5945
276,344
0.474
224,472
0.334
-51,872
-18.7708
4,191,082
7.185
4,790,813
7.125
599,731
14.3097
637,533
1.093
587,654
0.874
-49,879
-7.82375
Convertible note
245,195
0.42
190,522
0.283
-54,673
-22.2978
402,772
0.691
438,857
0.653
36,085
8.95916
19,087,505
32.72
26,446,802
39.33
7,359,297
38.5556
32,407,059
55.6
40,361,992
60
7,954,933
24.547
Common
872,124
1.495
872,124
1.297
Preferred
200,000
0.343
200,000
0.297
4,495,050
7.706
4,495,050
6.685
-270,632
-0.46
-456,773
-0.68
-186,141
68.7801
121,766
0.209
143,281
0.213
21,515
17.6691
34,349
0.059
34,349
0.051
19,817,957
33.98
21,363,395
31.77
1,545,438
0
7.79817
b. Acid-test ratio =
= 1.42
23,383,474,000
= 13,319,554,000
= 1.76
10,616, 855,000+8,333,761,000
13,319,554,000
c. Receivable turnover =
33,377,904,000
2,239,244,000+ 8,333,761,000
d. Collection Period =
e. Inventory turnover =
= 3.16
360 days
receivableturnover
360
3.16
20,682,834
262,221
g. Payable turnover =
360 days
inventory turnover
= 113 days
360
79
= 5 days
5,189,200
1,929,302
360 days
payable turnover
360
2.69
= 79
= 2.69
= 134 days
m. Assets turnover =
9,614,356
8,505,896.5
= 1.13
360
1.13
= 319 days
360 days
=
cash turnover
net sales
average working capital
net sales
average total assets
= =
7,925,357
57,992,081
net sales
total current liabilities
==
7,925,357
13,513,769
= 0.57
= 14%
7,925,357
13,319,554
= 0.60
B. Solvency Ratios
a. Debt Ratio = =
total liabilities
total assets
b. Debt-to-equity ratio = =
c. Equity ratio
= =
32,407,059
58,329,816
total liabilities
total shareholde r ' sequity
= =
= 0.56
= =
32,407,059
25,922,757
25,992,757
58,329,816
= 1.25
= 0.44
1995764
716,894
2.78
e. Fixed assets to non-current debts=
assets(net )
total noncurrent liabilities
29,616,954
19,087,505
= 1.55
f. Fixed assets to shareholders equity =
assets(net )
shareholde r ' s equity
29,616,954
25,922,757
1.14
g. Fixed assets to total equity =
assets(net )
total assets
18,535,905+5,288,350+5,429,192+196,916+166,591
57,992,081
= 0.51
C. Profitability Ratios
a. Gross profit rate
gross profit
net sales
12,695,070
33,377,904
operating profit
net sales
net profit
c. Net profit margin = net sales
2,028,347
= 33,337,904
= 0.38 or 38%
3,080,714
33,377,904
= 0.09 or 9.22%
= 0.0608 or 6.08%
operating income
average total assets
d. Return on investment =
3,080,714
58,329,816
net income
'
ave . shareholde r sequity
= 0.53 or 5.3%
2,028,347
25,922,757
0.08
net income+interest expense , net of tax
average total asset
3,052,305
58,329,816
= 0.05
net income
average current assets
2,028,i347
23,383,474
= 0.09
D. Growth Ratios
a. Basic Earnings per Share =
net income attributable
2,028,347200,000
]
872,124
2.096
=
=0.78
2.68
2.68
0.40
=0.149
2.68
0.40
=0.19
2.096
dividend paid
296,563
=
=0.40
ord . shares outstanding 779,584,602
'
shareholde r s equity
25,922,757
=
=13.8
ave . shares outstanding 1,872,123,642
b. Acid-test ratio =
c. Receivable turnover =
28,940,995
= 13,915,190
= 2.08
13,238,377+ 10,717,317
13,915,190
33,543,628
9,525,539
= 1.72
= 3.52
10
d. Collection Period =
e. Inventory turnover =
360 days
receivableturnover
360
3.52
20,255,176
403,291.5
g. Payable turnover =
360 days
inventory turnover
360
50
= 102 days
= 50.22
= 7 days
20,837,317
12,060,063
360
1.73
360 days
payable turnover
= 1.73
= 208 days
i. Operating turnover = collection period + inventory days = 102 + 7 days = 109 days
j. Cash turnover =
10,113,904
11,927,616
360 days
cash turnover
360
0.85
net sales
average working capital
= 0.85
= 423 days
= =
33,543,628
12,544,862.5
2.67
m. Asset turnover =
net sales
average total assets
33,543,628
62,783,318
net sales
total current liabilities
==
= 0.53
33,543,628
13,915,190
= 2.41
11
a. Debt Ratio = =
total liabilities
total assets
b. Debt-to-equity ratio = =
40,361,992
67,236,820
= .60 or 60%
total liabilities
'
total shareholde r sequity
40,361,992
26,874,828
= 1.5 or
150%
c. Equity ratio
26,874,828
67,236,820
= .40 or 40%
1763176
1023958
= 1.72
or 172%
e. Fixed assets to non-current debts=
assets(net )
total noncurrent liabilities
32,726,706
26,446,802
= 1.24 or 124%
assets(net )
shareholde r ' s equity
32,726,706
26,874,828
1.22 or 122%
g. Fixed assets to total equity =
assets(net )
total assets
32,726,706
67,236,820
= .49 or 49%
C. Profitability Ratios
a. Gross profit rate
gross profit
net sales
13,288,452
33,543,628
operating profit
net sales
net profit
c. Net profit margin = net sales
2,030,136
= 33,543,628
= 0.40
3,174,548
33,543,628
= 0.06
= 0.946
12
d. Return on investment =
operating income
average total assets
3,174,548
62,783,318
net income
'
ave . shareholde r sequity
= 0.506
2,030,136
26,874,828
0.08
f. Return on total assets =
2,747,630
62,783,318
= 0.04
net income
average current assets
2,030,136
26,162,234.5
= 0.08
D. Growth Ratios
a. Basic Earnings per Share =
2,383,418
=2.8672.87
831,220,288
b. Diluted Earnings per share = the company has no dilutive potential common shares
outstanding, therefore basic EPS is the same as diluted EPS.
2,030,136200,000
]
872,124
2.098
=
=0.73
2.87
2.87
13
0.59
=0.21
2.87
0.59
=0.28
2.098
dividend paid
514,600
=
=0.59
ord . shares outstanding 872,124
'
shareholde r s equity
26,874,828,000
=
=14.5
ave . shares outstanding 1,872,123,642
V. INTERPRETATIONS
VERTICAL AND HORIZONTAL ANALYSIS OF INCOME STATEMENT
The Vertical Analysis of Income Statement shows the proportion of individual accounts such as
all costs, expenses, income, losses or gains, other income and net income to the gross sales. Therefore, the
gross sales is used as the base and all of other components stated are shown as a percentage of sales. On
the other hand, the Horizontal Analysis of the ABS-CBNs Statement of Income shows changes in the
amounts of each item on the statement over the period of two years. The gross sales in 2014 increased by
P165,724,000 which constitutes a .497% increase after a year. A large portion of this amount came from
the advertising revenue which constitutes more than half of the gross sales for the two periods. The gross
profit of the network increased by P590,382,000 because of the reduction of costs of production, services
and sales by 1.62%. The pre-operating income increased by P74,476,000 or a percentage change of 2.745.
The increase of this account happened because of large increase of interest income by 63.04% and the
decrease of foreign exchange losses by P113,796,000. Also, the Associates and Ventures, and other
income increased in 2014. Finally, the net income of ABS-CBN in 2014 increased by P1,789,000.
Although the provision for income tax increased by 2.257%, still it resulted to a more amount of net profit
since the pre-operating income of 2014 is more than that of 2013. Indeed, the ABS-CN Corporation and
Subsidiaries made a better performance for 2014.
VERTICAL AND HORIZONTAL ANALYSIS OF BALANCE SHEET
14
The vertical analysis of financial position shows the proportion of each line item on the statement
to the amount of total assets. Hence, the total assets or the sum of liabilities and equity is used as the base
and the individual account in the statement is shown as percentage of total assets or sum of liabilities and
equity.
Similar in the statement of income, the horizontal analysis shows the changes or trends in each account of
the balance sheet. All in all, the current assets increased by P5,557,521,000 or a 23.77% change. The large
portion of this amount came from cash and cash equivalents which also increased by P2,621,522,000.
However, trade and other receivables increased by P2,383,556. Since the cash increased along
with the increase of receivables, it can be inferred that the cash available is idle. In addition, the amount in
program rights and other intangible assets decreased by P69,985,000. This happened may be, some of the
TV programs of the network marked poor ratings in 2014. Under the non-current section of assets, there is
an increase of property, plant and equipment by P2,036,638,000. It may indicate that the network invest
more properties that would help them to be more profitable after a year. All in all, the noncurrent assets of
the network increased by P3,349,483,000 due to the acquisition of property, plant and equipment.
Under the liability section of financial position, the trade other payables increased by 12.85%. The
possible reason of this is there is an increase of short-term borrowings made by the network. The big
portion of the total amount of noncurrent liabilities came from the interest-bearing loans and borrowings,
which may indicate that there is high rate of interest of the long-term borrowings every month that are
accumulated around a year.
Finally, the equity part of the balance sheet shows no significant difference on common and
preferred shares since amounts there are no changes in the amount of these accounts in the two periods.
The big amount comprising this part goes to retained earnings since income of the network is reflected on
this account. Since the network became profitable in its operation in 2014, the retained earnings increased
by P1,545,438 with percentage of 7.798%
LIQUIDITY RATIOS
15
The current ratio is a liquidity ratio that measures a companys ability to pay short term and
long-term obligations. The current ratio of statement of financial position of ABS-CBN in the year 2013 is
1.76 and increased by 2.08 in a year 2014, it indicates that company is continuous to have a greater assets
than its liabilities and suggests that the company is stable to pay off its obligation.
The acid-test ratio is a strong indicator whether a firm has sufficient short-term assets to cover
its immediate liabilities. The acid-test ratio of statement of financial position of ABS-CBN in a year 2013
is 1.42 and increased by 1.72 in a year 2014; since they are both lower than their current ratio it means
that the current asset of the company is highly dependent on inventory. Moreover, the company does have
the liquid assets to pay their current liabilities.
The receivable turnover, it indicates the efficiency of collection of receivables. The receivable
turnover of the statement of financial position of ABS-CBN in a year 2013 is 3.16 and increased by 3.52
in a year 2014; it implies that the company has greater collection of accounts receivable in a prior year
than the previous year.
The collection period, it determines the average duration of accounts receivable during a year.
The collection period based on the balance sheet of ABS-CBN in 2013 is 113 days and then drop to 102
days in 2014; it is good for the company because they are able to collect their receivable in a short period
of time compared to the previous year.
The inventory turnover is a ratio showing how many times a company's inventory is sold and
replaced over a period. The inventory turnover of ABS-CBN during 2013 and 2014 are 79 and 50.22
respectively, since it is diminished the sales of the company must have been weakened so that it is
unfavorable to the company because the number of products deteriorate are increased as they sit in a
warehouse.
The inventory sales period is a financial measure of a company's performance that gives
investors an idea of how long it takes a company to turn its inventory into sales. The inventory sales
period of ABS-CBN in a year 2013 is 5 days and increased by 7 days in a year 2014. It is unfavorable to
the company because it takes longer than previous year to generate profit using their inventory.
16
The payable turnover, it short-term liquidity measure used to quantify the rate at which a
company pays off its suppliers. The payable turnover of ABS-CBN from year 2013 to 2014 is 269 to 173
respectively, since the ratio is lowered, it is unfavorable for the company because it is the sign that the
company is taking longer to pay off its supplier than It was before.
The payable payment days tells how long it takes a company to pay its invoices from trade
creditors, such as suppliers. The payable payment days of ABS-CBN from year 2013 to 2014 is 134 to
208 respectively, since it is increased, it is both favorable and unfavorable for the company. Favorable
because the company has more money on hand from which is good for the working capital and free cash
flow. Unfavorable because if the company takes too long to pay its creditors, they will be unhappy. They
may refuse to extend credit in the future, or they may offer less favorable terms.
The Operating turnover, it indicates the number of day cash is invested until the day of its
recovery. The operating turnover of ABS-CBN from year 2013 to 2014 is 109 to 118 respectively, it is
good for the company because the earlier they invest cash the earlier the cash is to be recovered.
The cash turnover measures how many times per year it replenishes its cash balance with its
sales revenue. The cash turnover of ABS-CBN from 2013 to 2014 is 1.13 to 0.85 respectively, since it is
decreased, it is unfavorable for the company because they turn over their cash balance less times per year
and take longer days to replenish it.
The Days to operating expenses it is a measure of what it costs to operate a piece of property
compared to the income that the property brings in. The days to operating expenses from year 2013 to
2014 is 319 and 423 respectively, it is unfavorable because it takes longer time pay their operating
expenses in a current year than it was before.
The working capital turnover, It is the measurement of comparing the depletion of working
capital to the sales over a given period. The working capital turnover of ABS-CBN during 2013 is 0.57.
Obviously, the company is not generating a lot of sales compared to the money it uses to fund the sales.
17
The ABS-CBN net working capital during 2013 is 10,981,207. The firm uses its net working
capital to fund operations and purchase inventory, the higher the working capital the higher the
opportunity to generate profit.
SOLVENCY AND LEVERAGE RATIOS
The debt ratio is a financial ratio that measures the extent of a companys or consumers
leverage. The debt ratio of ABS CBN during 2013 and 2014 are 56:1 and 60:1 respectively. It indicates
that the company have more assets than debt during those years. Therefore, the company has more
leveraged at the same time implying greater financial risk and probably they find expensive to borrow. A
very low debt ratio is good in the sense that the companys assets are sufficient to meet its obligations; it
may indicate underutilization of a major source of finance which may result in restricted growth. A very
high debt ratio indicates high risk for both debt-holders and equity investors. Due to the high risk, the
company may not be able to obtain finance at good terms or may not be able to raise any more money at
all.
The debt-to-equity ratio, it is a debt ratio used to measure a companys financial leverage. The
debt-to-equity ratio of ABS-CBN during 2013 and 2014 are 1.25 and 1.50 respectively. Lower values of
debt-to-equity ratio are favorable indicating less risk. Higher debt-to-equity ratio is unfavorable because it
means that the business relies more on external lenders thus it is at higher risk, especially at higher
interest rate. As a result, 2013 is more favorable than 2014.
The equity ratio is used to measure a companys financial leverage. The equity ratio of ABSCBN during 2013 is 44% and 40% in 2014. Therefore, the equity ratio in 2013 is more favorable than
2014. Higher investment levels by shareholders shows potential shareholders that the company is worth
investing in since so many investors are willing to finance the company. A higher ratio also shows
potential creditors that the company is more sustainable and less risky to lend future loans. Companies
with higher equity ratios should have less financing and debt service costs than companies with lower
ratios.
18
The times interest ratio measures a firm's ability to make interest and debt service payments.
The time interest ratios of ABS CBN during 2013 and 2014 are 2.78 and 1.72 respectively. It shows that
ABS CBN is more favorable in 2013 than 2014. Higher value of times interest earned ratio is favorable
meaning greater ability of a business to repay its interest and debt. Lower values are unfavorable.
Fixed assets to non-current debts indicate the percentage of investment in fixed assets
financed from non-current debt. The percentage of fixed assets to non-current debts of ABS-CBN
in a year 2013 is 155% but in a year 2014 it decreased by 124%, it means that the fixed assets
investment arises from non-current portion of liabilities has been reduced which is favorable to
the company because they minimized their long-term debt.
Fixed assets to shareholders equiy indicate the percentage of investment in fixed assets
by shareholders. The percentage of investment in fixed assets to shareholders equity of ABSCBN from year 2013 to 2014 is 114% and 122% respectively; since it increased it means that
some of the shareholders invested additional fixed assets to the company by use of their shares. It
is good for the company because their total assets have increased. However, the company has to
pay more dividends to the shareholders.
Fixed assets to total equity indicate the percentage of investment in fixed assets. The
percentage of investment in fixed assets to total equity of ABS-CBN in a year 2013 is 51% but in
2014 it decreased by 49%, it implies there was a depreciation that reduced the value of their
fixed assets. It is good for the company because they could generate profit by using their fixed
asset but since its value has reduced their total assets also decreases.
PROFITABILITY RATIO
The gross profit rate shows the proportion of profits generated by the sale of products or
services, before selling and administrative expenses. It is used to examine the ability of a business to
19
create sellable products in a cost effective manner. The gross profit rate of ABS-CBN in 2013 reaches to
13% lesser than the rate in 2014 which is 40%. This only shows that the company will have more money
to pay in operating expenses like salaries, utilities, and rent. Since this ratio measures the profits from
selling inventory, it also measures the percentage of sales that can be used to help fund other parts of the
business.
The operating profit margin of ABS-CBN in 2013 is 9.22% and 9.46% in 2014. This means that
the percentage of their profit increase. This indicates that the management is able to control the
companys operating expenses.
The net profit margin of ABS-CBN in 2013 is 6.08 % the same in 2014 which is also 6.05%. It
decreases which means that the cost increases.
The return on investment of ABS-CBN in 2013 is 5.3% and in 2014 5.06%. This is not
favorable because every one peso in 2013 and 2014, the return on investment are 5.3 centavos and 5.06
centavos respectively.
The return on shareholders equity of ABS-CBN in 2013 is 3% and 8% in 2014 which may
indicate that there is improvement in terms of financial operation.
The return on total assets of ABS-CBN in 2013 is 4% and 5% in year 2014. This only shows
that their operating income and usage of assets increases. The return for year 2013 is 4 cents for every one
peso of investment and 5 cents in year 2014.
The return on current asset of ABS-CBN in 2013 is 9% and 8% in 2014 which indicates
decrease in returning the resources in current assets cause by gradual decreasea in operating or increase in
costs and expenses incurred.
GROWTH RATIO
20
The basic earnings per share of ABS-CBN in 2014 is 2.87% higher than in 2013 which
is 2.68%. This indicates that the company is capable of generating a significant dividend for
investors. Moreover, the company has a potentially worthwhile investment depending on the
market price of the stock.
The price earnings per ratio of ABS-CBN in 2014 is 7.3% lesser than in 2013 which is
7.8%. This is an indication of poor current and future performance. This could also prove to be a
poor investment.
The dividend payout ratio of ABS-CBN in 2014 is 2.1% and 1.5% in 2013. It increases
by 6%. A high ratio does not mean that much. Investors are mainly concerned with sustainable
trends. For instance, investors can assume that a company has a payout ratio of 20% for the last
ten years will continue giving 20 percent of its profit to shareholders.
The dividend yield ratio of ABS-CBN in 2014 is 2.8% higher than in 2013 which is
1.9%. This indicates that the company pays its investors a large dividend compared to the fair
market value of the stock. This means that the investors are getting highly compensated for their
investments compared with lower dividend yielding stocks.
The dividend per share of ABS CBN in 2014 is 5.9%. It increases by 1.9% compared
in 2013 which is 4%. This shows that there is an increase in the companys net profits out of
which dividends are paid. There may also be a shift in the companys growth strategy that leads
the company to decide to expend less of its earnings in seeking growth and expansion, thus
leaving a larger share of profits available to be returned to equity investors in the form of
dividends.
The book value per share of ABS-CBN in 2014 is 14.5% higher than in 2013 which is
13.8%. This shows that there is an appraisal and the net worth of the company increases.
VI. CONCLUSION AND RECOMMENDATION
21
Based on our analysis, year 2014 is the better year with a better position for ABS-CBN
Corporation. The operation performance of the company increases gradually. The liability and
equity both increases. The equity for 2013 and 2014 are P25,922,757 and 26,874, 828 while the
liability for 2013 and 2014 are 32,407,059 and 40,361,992. Even though their liabilities
increased, it may imply that creditors trust the company for them to pay on time because of their
improving operating performance. Our group conclude that ABS-CBN corporation is financially
stable.
We recommend that they continue their operations and still find ways to improve to
generate more income and to strengthen the trust and support of their consumers, creditors and
investors. They find ways to lessen cost while not sacrificing their performance to continually
improve their financial condition.
22
APPENDIX
2013
P=13,238,377
10,717,317
1,315,987
3,669,314
28,940,995
P=10,616,855
8,333,761
1,385,972
3,046,886
23,383,474
20,572,543
18,535,905
6,465,599
5,289,956
242,368
198,734
199,874
2,858,187
2,468,564
38,295,825
5,429,192
5,288,350
219,191
196,916
166,591
2,530,164
2,580,033
34,946,342
P=67,236,820
P=58,329,816
P=12,788,120
292,053
724,266
110,751
13,915,190
P=11,332,006
193,216
448,861
1,345,471
13,319,554
20,214,484
224,472
4,790,813
587,654
190,522
438,857
26,446,802
40,361,992
13,334,579
276,344
4,191,082
637,533
245,195
402,772
19,087,505
32,407,059
ASSETS
Current Assets
Cash and cash equivalents (Note 6)
Trade and other receivables (Notes 7 and 22)
Program rights and other intangible assets (Note 11)
Other current assets (Note 8)
Total Current Assets
Noncurrent Assets
Property and equipment (Notes 9, 10, 17 and 30)
Program rights and other intangible assets - net of current portion
(Note 11)
Goodwill (Notes 4 and 15)
Available-for-sale (AFS) investments (Note 12)
Investment properties (Notes 9, 10 and 17)
Investments in associates and joint ventures (Note 13)
Deferred tax assets - net (Note 28)
Other noncurrent assets (Note 14)
Total Noncurrent Assets
TOTAL ASSETS
Noncurrent Liabilities
Interest-bearing loans and borrowings - net of current portion
(Notes 9, 10 and 17)
Obligations for program rights - net of current portion (Note 18)
Accrued pension obligation and other employee benefits (Note 29)
Deferred tax liabilities - net (Note 28)
Convertible note (Note 19)
Other noncurrent liabilities (Note 20)
Total Noncurrent Liabilities
Total Liabilities
(Forward)
-2-
December 31
2014
Equity Attributable to Equity Holders of the Parent Company
Capital stock (Note 21):
Common
Preferred
Additional paid-in capital (Notes 2, 4 and 21)
Exchange differences on translation of foreign operations
Unrealized gain on AFS investments (Note 12)
Share-based payment plan (Note 21)
Retained earnings (Note 21)
Philippine depository receipts convertible to common shares (Note 21)
Equity attributable to Equity Holders of the Parent
Noncontrolling Interests (Notes 4 and 23)
Total Equity
TOTAL LIABILITIES AND EQUITY
See accompanying Notes to Consolidated Financial Statements.
P=872,124
200,000
4,495,050
(456,773)
143,281
34,349
21,363,395
(1,264,096)
25,387,330
1,487,498
26,874,828
P=67,236,82
0
2013
P=872,124
200,000
4,495,050
(270,632)
121,766
34,349
19,817,957
(1,164,146)
24,106,468
1,816,289
25,922,757
P=58,329,816
2013
2012
P=18,879,946
14,029,684
351,528
282,470
33,543,628
P=19,331,908
13,287,245
579,140
179,611
33,377,904
P=16,611,731
11,827,501
421,079
123,329
28,983,640
(11,007,656)
(11,499,365)
(10,555,162)
(9,045,527)
(8,853,440)
(8,061,381)
(201,993)
(330,029)
(292,095)
13,288,452
12,695,070
10,075,002
(10,113,904)
(9,614,356)
(8,221,168)
(1,165,313)
(816,919)
(816,701)
153,968
94,438
119,672
(31,704)
(145,500)
111,784
3,283
(12,397)
(58)
652,352
512,322
788,099
2,787,134
2,712,658
2,031,849
756,998
684,311
413,950
(24,781)
P=2,030,136
P=2,028,347
P=1,617,899
P=2,387,085
(356,949)
P=2,030,136
P=2,145,725
(117,378)
P=2,028,347
P=1,580,623
37,276
P=1,617,899
P=2.867
P=2.678
P=2.132
P=2,030,136
2013
P=2,028,347
2012
P=1,617,899
(478,239)
143,472
(334,767)
639,129
(191,739)
447,390
(130,921)
39,276
(91,645)
(186,141)
367,657
(279,753)
21,515
(164,626)
(4,910)
362,747
6,853
(272,900)
(499,393)
810,137
(364,545)
P=1,530,743
P=2,838,484
P=1,253,354
P=1,895,412
(364,669)
P=1,530,743
P=2,906,433
(67,949)
P=2,838,484
P=1,413,954
(160,600)
P=1,253,354
2014
2013
2012
P=2,787,134
P=2,712,658
P=2,031,849
2,871,000
2,714,199
2,825,196
1,327,894
122,975
69,617
1,023,958
(444,826)
(153,968)
(69,427)
4,167
1,430,811
73,421
52,871
716,894
(13,910)
(94,438)
2,836
5,688
1,277,597
65,576
53,166
731,633
(208,564)
(119,672)
(20,329)
(89,121)
(3,283)
7,535,241
12,397
20,061
5,397
7,638,885
58
25,256
24,781
6,597,426
973,670
432,094
1,041,210
389,904
(2,886,288)
(626,555)
(814,390)
65,175
(2,239,244)
1,485,137
985,677
225,297
(371,221)
(254,000)
5,923,816
(912,745)
5,011,071
356,911
239,177
(5,461)
(540)
8,885,521
(830,461)
8,055,060
695,427
(217,963)
(136,802)
(360,000)
7,255,095
(626,732)
6,628,363
785,092
530,573
-2-
2013
2012
(P=4,991,980)
(P=3,727,670)
(P=3,733,534)
(1,433,238)
(2,508)
(194,505)
140,660
(1,772,969)
(97,296)
97,881
(1,495,770)
167,840
124,303
96,580
(30,000)
24,629
(137,962)
175,861
22,863
(6,414,991)
(5,613,387)
(4,993,577)
(9,732,014)
8,576,439
2,000,000
850,000
792,432
4,000,000
(2,550,619)
(983,203)
(498,950)
(400,000)
(29,549)
(99,950)
35,878
(115,722)
(744,937)
(298,066)
(3,850,000)
(37,551)
(1,267,954)
(818,510)
(591,989)
(1,000,000)
(51,179)
4,050,046
3,939,501
200,000
(185,893)
1,757,332
(101,551)
961,249
22,912
(97,713)
2,621,522
4,221,917
(2,240,115)
10,616,855
6,394,938
8,635,053
P=13,238,377
P=10,616,855
P=6,394,938
(24,604)