URC‟s financial position remains healthy with strong cash levels. The Company has a current ratio of 1.98:1 as of September 30, 2012 higher than the 1.71:1 as of September 30, 2011. Acid test ratio also improved by 0.28% in 2012 from 0.90:1 in 2011 to 1.18:1 in 2011. The company‟s receivable turnover was maintained at 10 turnovers. The company was able to collect its receivables in 38 days. On the other hand, Inventory
LIQUIDITY RATIOS 2012 2011
Current Ratio 1.98:1 1.71:1
Acid Test Ratio 1.18:1 0.90:1
Receivables Turnover 10 times 10 times
Average Age of Receivables 38 days 38 days
Inventory Turnover 5 times 6 times
Average Age of Inventory 68 days 64 days
FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION : 35 turnover slightly decreased. Likewise the average age of inventory, was extended for 4 days from 64 days to 68 days.
SOLVENCY RATIOS 2012 2011
Times Interest Earned 12 times 7 times
Debt to Total Asset Ratio 33% 39%
URC‟s Solvency Ratios improved by 2012. Times interest earned improved tremendously by 5 times from 7 times in 2011 to 12 times in 2012. This means that the company may be able to pay all its expenses including interest expense and still have enough left for net income. Furthermore, the company‟s debt to total asset ratio favorably decreased by 6% from 39% in 2011 to 33% in 2012. The decrease in debt ratio indicates that the total assets provided by the creditors decreased. The owner‟s equity was able to fund its assets.
FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION : 36
PROFITABILITY RATIOS 2012 2011
Profit Margin 11% 7%
Asset Turnover 1.03 1.00
Return on Assets 12% 7%
Return on common stockholder‟s equity 18% 12%
Earnings Per Share 3.69 2.25
Price-Earnings Ratio 22.72:1 21.33:1
Pay-out Ratio 48% 78%
URC‟s overall profitability improved in 2012. The company‟s profit margin increased by 4% from 7% in 2011 to 12% in 2012, Asset turnover slightly improved by 0.03% from 1.00 in 2011 to 1.03 in 2012. Return on assets improved by 5% from 7% in 2011 to 12% in 2012. This indicates that the company was able to manage its assets efficiently than 2011. Return on common stockholder‟s equity favorably increased by 6% from12% in 2011 to 18% on 2012. Earnings per share increased by 64% or 1.44 from 2.25 in 2011 to 3.69 in 2012. On the other hand, price-earnings ratio increased by 6.52% or 1.39 from 21. 33:1 in 2011 to 22.72:1 in 2012. The company‟s payout ratio decreased by 30% from 78% in 2011 to 48%
in 2012.
FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION : 37 CONCLUSION:
Universal Robina Corporation operates its food business through operating divisions and wholly-owned or majority owned subsidiaries that are organized into three core business segments: branded consumer foods, agro-industrial products and commodity food products. The Company has a strong brand portfolio created and supported through continuous product innovation, extensive marketing and experienced management. Its brands are household names in the Philippines and a growing number of consumers across Asia are purchasing the Company‟s branded consumer food products.
The company‟s overall financial condition improved in 2012. The company‟s liquidity ratios reveal that the company was able to meet its short term obligations as per the 16% or 0.27 increase in its current ratio.
The company‟s solvency also improved in 2012. URC‟s Times interest earned improved tremendously by 5 times from 7 times in 2011 to 12 times in 2012. Furthermore, the company‟s debt to total asset ratio favorably decreased by 6% from 39% in 2011 to 33%
in 2012.
The company‟s overall profitability improved in 2012. . It is evident in the company‟s 4%
increase in profit margin from 7% in 2011 to 12% in 2012.
The strong growth in the company‟s full year profit was driven by its domestic branded consumer food group (BCFG), which more than offset the weak performance of the commodity food group. The company is also benefiting from its successful expansion internationally.
FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION : 38
FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION : 39 RECOMMENDATION:
Universal Robina Corporation (URC) is a consumer food, animal feed and agricultural product manufacturing company. The company undertakes manufacturing and distribution of branded consumer foods, hogs and day-old chicks, animal and fish feeds, glucose and veterinary compounds as well as it operates flour milling, sugar milling and refining and makes plastic film for packaging consumer products. It also offers coffee, flour, feed, meat, bakery, beverages, biscuits, candy, chocolate, noodles, and easy-to-drink products. The company operates in Philippines, China, Thailand, Malaysia, Vietnam, Singapore, Hong Kong and Indonesia internationally.
Cost of sales slightly increased due to increase in sales. It would be highly beneficial if the company would monitor and manage this efficiently. By tapering this down, the company may be able to increase its profits.
The stronger peso‟s effect on the export industry is evident in the 1,629.1 % increase in foreign exchange loss in 2012. It is highly recommended that the company would consider its effect on the company‟s net income. By prioritizing the domestic market and by strategically managing the export business, the losses may be reduced.
The sales in Thailand contracted in 2012; this was largely due to the floods experienced near the end of 2011. Due to the floods in late 2011, spending on consumer staples is higher than on discretionary products. It is highly recommended that the company to launch other products such as confectionaries and to increase its budget in adverting and marketing.
Through its market leadership and commitment to excellence the company is expected to play in the ASEAN growth story.
FINANCIAL ANALYSIS ON UNIVERSAL ROBINA CORPORATION : 40