KAPUSO

o
KAPAMILYA
Members:
Antonio, Kattee G.
Cuntapay, Phoebe Marieghile
Lopez, Zenith Kim P.
Tuala, Kaylor Ann
ABS-CBN Corporation

Background of the Study

ABS-CBN Corporation is the leading television network in the Philippines. It was first
founded in the year 1967 by James Lindenberg, Antonio Quirino, Eugenio Lopez Sr., and
Fernando Lopez. Earlier than that, it was Chronicle Broadcasting Network (CBN) operating in
the radio broadcasting which was later on merged with Alto Broadcasting System (ABS). Since
then, the corporate name changed into ABS-CBN Broadcasting Corporation. In 2010, the
“Broadcasting” was dropped from its corporate name. ABS-CBN Corporation now is a company
under the management of the Lopez group. It is deemed to be the oldest television broadcaster
in Asia. The company’s primary production is through television and radio programming.
Throughout the years, their program expanded and entered the world of film production, music
production, and new media. Aside from that, they were able to developed ABS-CBN digital
media in order to connect with their viewers. These digital platforms are iWantTv, Jeepney Tv,
TFC, in which it became a tool to pave a way for ABS-CBN to be known globally. ABS-CBN is
also known for their programs supporting the youths and poor family. Their famous charity work
is the Sagip Kapamilya, Bantay Kalikasan and the Bantay Bata 163. Milestone has been in their
side through the years. It’s exceptional. On the year 2020, ABS-CBN faced one of their major
problems. The company was ordered to shut down because of the allegations that they are not
paying enough taxes. The company started to go off air last May, 2020. Regardless of their
controversy, their determination and compassion in their service continues. Their operation
continues although it was limited in selected cables like sky cables. They keep on delivering
news and entertainment using a digital platform.

ABS-CBN CORPORATION AND SUBSIDIARIES

COMPARATIVE STATEMENTS OF FINANCIAL POSITION
December 31
2018 2017 2016
ASSETS

Current Assets
Cash and cash equivalents 18,104,686,000 12,346,556,000 10,964,524,000
Short term investments 1, 804, 041,000 1,358,429,000 3,065,793,000
Trade and other receivables 10,369, 080,000 10,630,014,000 10,204,118,000
Inventories 680,628,000 1,137,234,000 349,821,000
Program rights and other intangible 1,359,188,000 5,062,390,000 1,067,144,000
assets
Other current assets 5,383,138,000 31,043,344,000 4,141,388,000
Total Current Assets 37,700,761,000 31,043,344,000 29,792,788,000

Non-Current Assets
Property and equipment 27,875,625,000 25,700,997,000 24,509,980,000
Goodwill, program rights and other 13,310,366,000 13,181,185,000 12,530,321,000
intangible assets-- net of current portion
Available-for-sale (AFS) investments 242,743,000 210,219,000
Financial assets at Fair Value through 268,304,000 - -
other comprehensive income (FVOCI)
Investment properties 202,763,000 200,740,000 202,114,000
Investment in associates and joint 495,247,000 524,953,000 530,005,000
ventures
Deferred tax assets 3,020,803,000 2,462,942,000 2,498,677,000
Other non-current assets 1,685,348,000 1,748,181,000 2,459,848,000
Total noncurrent assets 46,858,456,000 44,061,741,000 42,941,164,000

TOTAL ASSETS 84,559,217,000 75,105,085,000 72,733,952,000

LIABILITIES AND EQUITY

Current Liabilities
Trade and other payables 13,637,426,000 13,252,577,000 13,648,504,000
Contract liabilities 890,644,000 - -
Income tax payable 208,056,000 263,329,000 277,239,000
Obligations for program rights 441,875,000 349,736,000 439,316,000
Interest-bearing loans and borrowings 414,911,000 350,678,000 354,950,000
Total Current Liabilities 15,592,912,000 14,216,320,000 14, 720,009,000

Noncurrent Liabilities
Interest-bearing loans and borrowings-net 27,810,584,000 20,036,027,000 20, 117,273,000
of current portion
Obligation for program rights- net of 541,548,000 554,657,000 660, 667,000
current portion
Accrued pension of obligation and other 4,029,891,000 5,757,944,000 4,906,236,000
employee benefits
Deferred tax liability 138,271,000 138,271,000 138,271,000
Convertible note 221,217,000 205,380,000 221,063,000
Other noncurrent liabilities 500,346,000 485,542,000 27,730,000
Total Noncurrent Liabilities 33,241,857,000 27,177,821,000 26,322,240,000
Total Liabilities 48,834,769,000 41,394,141,000 41,042,249,000

Equity Attributable to Equity

Holders of the Parent Company
Capital Stock:
Common 872,124,000 872,124,000 872,124,000
Preferred 200,000,000 200,000,000 200,000,000
Additional paid-in capital 4,745,399,000 4,745,399,000 4,740,811,000
Treasury shares and Philippine depository (1,638,719,000) (1,638,719,000) (1,638
receipts convertible to common shares ,719,000)
Exchange differences on translation 921,624,000 359,816,000 18,349,000
foreign operations
Unrealized gain on AFS investments - 180, 408, 000 147,884,000
Share-based payment plan - - 4,588,000
Fair value reserves on financial assets at 205,969,000 - -
FVOCI
Retained earnings 30,291,703,000 28,560,106,000 26,709,981,000
Equity attributable to equity holders of 35,598,100,000 33,279,134,000 31,055,018,000
the parent
Noncontrolling interests 126,348,000 431,810,000 636,685,000
Total equity 35,724,448,000 33,710,944,000 31,691,703,000

TOTAL LIABILITIES AND EQUITY 84,559,217,000 75,105,085,000 72,733,952,000

ABS-CBN CORPORATION AND SUBSIDIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
December 31

2018 2017 2016

CASH FLOWS FROM OPERATING
ACTIVITIES ABS-CBN CORPORATION AND SUBSIDIARIES
Income before income tax COMPARATIVE INCOME STATEMENT
1,980,300,000 3,936,035,000 4,680,871,000
Adjustments to reconcile income before Years Ended December 31
tax to net cash flows:
Depreciation and amortization 2018
3,819,919,000 3,666,140,00020173,401,610,000 2016
Amortization of:
REVENUES
Program rights and other 40,130,592,000 40,698,244,000 41,630,599,000
PRODUCTION COSTS
intangibles (12,345,277,000)
1,721,520,000 (11,833,615,000)
1,818,806,000 (12,011,950,000)
1,182,544,000
COST Debt
OF issue costs
SERVICES 32,927,000
(10,785,230,000) 40,390,000 49,609,000
(10,711,713,000) (10,323,075,000)
COST Deferred
OF SALES charges 292,000
(2,493,359,000) 6,993,000 6,402,000
(2 109 942 000) (1,693,608,000)
Impairment of property and equipment 9,438,000 - -
GROSS PROFIT 14,506,726,000 16 042 974 000 17,601,966,000
Movements in accrued pension
GENERAL
obligation AND
and ADMINISTRATIVE
other employee benefits (12,310,128,000)
(73,913,000) (11,916,759,000)
(439,759,000) (12,661,479,000)
723,243,000
EXPENSE
Interest Expense 1,061,666,000 931,459,000 968,768,000
FINANCE COSTS
Interest Income (1,124,677,000)
(202,801,000) (1,007,916,000)
(166,788,000) (220,982,000)(1,036,386,000)
INTEREST INCOME
Net unrealized foreign exchange loss 202,801,000 166,788,000 220,982,000
FOREIGN EXCHANGE GAINS
(gain) 404,031,000
(179,111,000) (55,261,000)41,194,000
42,624,000 89,063,000
Equity in net losses
EQUITY IN NET LOSSES OF of associates and (29706000) (5,052,000) (1,055,000)
joint ventures AND JOINT VENTURES
ASSOCIATES 29,706,000 5,052,000 1,055,000
Gain onINCOME
OTHER sale of property and 331,253,000 614,806,000 467,780,000
equipment (849,000) (6,221,000) (3,987,000)
DividendBEFORE
INCOME income INCOME TAX (7,651,000)
1,980,300,000 (10,364,000) (14,230,000) 4,680,871,000
3,936,035,000
Working capital changes:
Decrease (increase)
PROVISION in:
FOR (BENEFIT FROM)
Trade
INCOME TAX and other receivables 398,356,000 (662,248,000) 1,084,131,000
Other
Current current assets (208,986,000) (975,176,000)
600,791,000 (526,167,000) 1,047,055,000
604,575,000
Inventories (169,576,000) (158,875,000) 328,993,000
Deferred
Increase (decrease) in: (528,732,000) 167,883,000 108,500,000
72,059,000 772,458,000
(2,903,438,000 1,155,555,000
Trade and other payables (956,435,000) (683.328,000) )
NETObligations
INCOME for program rights (651,615,000)
1,908,241,000
(197,019,000)
3,163,577,000
427,155,000 3,525,316,000
Contract liabilities 790,567,000 - -
Other noncurrent liabilities (11,573,000) 197,694,000 230,664,000
Cash generated from Operations 7,382,181,000 7,247,530,000 9,458,865,000
Income taxes paid (656,064,000) (618,484,000) (907,865,000)
Net Cash provided by Operating
activities 6,726,117,000 6,629,046,000 8,551,000,000

CASH FLOWS FROM INVESTING

ACTIVITIES
Additions to:
(5,970,703,000 (5,058,385,000 (5,565,611,000
Property and equipment ) ) )
Goodwill, program rights and other (1,319,100,000 (1,944,422,000 (1,114,971,000
intangible assets ) ) )
Decrease (increase) in short-term (1,448,248,000
investments (445,612,000) 1,707,364,000 )
Interest received 190,124,000 174,369,000 222,265,000
Acquisition of a business - (35,0000,000) -
Increase in other noncurrent assets 406,827,000 684,846,000 338,551,000
Proceeds from sale of property and
equipment 18,377,000 221,983,000 10,967,000
Acquisition of AFS investments - - (21,008,000)
Investments in joint ventures and
associates - - (10,062,000)
(7,120,087,000 (4,564,245,000 (7,588,117,000
HORIZONTAL ANALYSIS

ABS-CBN CORPORATION AND SUBSIDIARIES

COMPARATIVE STATEMENTS OF FINANCIAL POSITION – HORIZONTAL ANALYSIS
December 31

CHANGE
2018 2017 AMOUNT %
ASSETS
CURRENT ASSETS
Cash and cash equivalents 18,104,686,000 12,346,556,000 5,758,130,000 46.64
Short term investments 1,804,041,000 1,358,429,000 445,612,000 32.80
Trade and other receivables 10,369,080,000 10,630,014,000 (260,934,000) (2.45)
Inventories 680,628,000 508,721,000 171,907,000 33.79
Program rights and other intangible 1,359,188,000 1,137,234,000 221,954,000 19.52
assets
Other current assets 5,383,138,000 5,062,390,000 320,748,000 6.34
TOTAL CURRENT ASSETS 37,700,761,000 31,043,344,000 6,657,417 21.45

NON-CURRENT ASSETS
Property and equipment 27,875,625,000 25,700,997,000 2,174,628,000 8.46
Goodwill program rights and other 13,310,366,000 13,181,185,000
intangible assets-- net of current
portion 129,181,000 0.98
Available-for-sale (AFS) investments 242,743,000 (242,743,000) (100)
Financial assets at Fair Value through 268,304,000
other comprehensive income (FVOCI) 268,304,000 0.00
Investment properties 202,763,000 200,740,000 2,023,000 1.01
Investment in associates and joint 495,247,000 524,953,000
ventures (29,706,000) (5.66)
Deferred tax assets 3,020,803,000 2,462,942,000 557,861,000 22.65
Other non-current assets 1,685,348,000 1,748,181,000 (62,833,000) (3.59)
Total noncurrent assets 46,858,456,000 44,061,741,000 2,796,715,000 6.35
TOTAL ASSETS 84,559,217,000 75,105,085,000 9,454,132,000 12.59

LIABILITIES AND EQUITY

Current Liabilities
Trade and other payables 13,637,426,000 13,252,577,000 384,849,000 2.90
Contract liabilities 890,644,000 890,644,000 0.00
Income tax payable 208,056,000 263,329,000 (55,273,000) (20.99)
Obligations for program rights 441,875,000 349,736,000 92,139,000 26.35
Interest-bearing loans and borrowings 414,911,000 350,678,000 64,233,000 18.32
Total Current Liabilities 15,592,912,000 14,216,320,000 1,376,592,000 9.68

Noncurrent Liabilities
Interest-bearing loans and 27,810,584,000 20,036,027,000
borrowings-net of current portion 7,774,557,000 38.80
Obligation for program rights- net of 541,548,000 554,657,000
current portion (13,109,000) (2.36)
Accrued pension of obligation and 4,029,891,000 5,757,944,000
other employee benefits (1,728,053,000) (30.01)
Deferred tax liability 138,271,000 138,271,000 0 0.00
Convertible note 221,217,000 205,380,000 15,837,000 7.71
Other noncurrent liabilities 500,346,000 485,542,000 14,804,000 3.05
Total Noncurrent Liabilities 33, 241, 857, 27,177,821,000
000 6,064,036,000 22.31
Total Liabilities 48,834,769,000 41,394,141,000 7,440,628,000 17.98

Equity Attributable to Equity holders of

the Parent Company
Capital Stock:
Common 872,124,000 872,124,000 0 0
Preferred 200,000,000 200,000,000 0 0
Additional paid-in capital 4,745,399,000 4,745,399,000 0 0
Treasury shares and Philippine (1,638,719,000) (1,638,719,000)
depository receipts convertible to
common shares 0 0
Exchange differences on translation 921,624,000 359,816,000
foreign operations 561,808,000 156.14
Unrealized gain on AFS investments 180,408,000 (180,408,000) (100.00)
Fair value reserves on financial assets 205,969,000
at FVOCI 205,969,000 0.00
Retained earnings 30,291,703,000 28,560,106,000 1,731,597,000 6.06
Equity attributable to equity 35, 598, 100,000 33,279,134,000
holders of the parent 2,318,966,000 6.97
Non-controlling interests 126,348,000 431,810,000 (305,462,000) (70.74)
Total equity 35,724,448,000 33,710,944,000 2,013,504,000 5.97
TOTAL LIABILITIES AND EQUITY 84, 559, 217,00 75, 105,085,000 9,454,132,000 12.59
ABS-CBN CORPORATION AND SUBSIDIARIES
COMPARATIVE INCOME STATEMENT – HORIZONTAL ANALYSIS
Years Ended December 31

CHANGE
AMOUNT %
2018 2017
REVENUES 40130592 40698244 (567652) (1.39)
PRODUCTION COSTS (12345277) (11833615) (511662) 4.32
COST OF SERVICES (10785230) (10711713) (73517) 0.69
COST OF SALES 2493359 2109942 383417 18.17
GROSS PROFIT 14506726 16042974 (1536248) (9.58)

GENERAL AND ADMINISTRATIVE

EXPENSE (12310128) (11916759) (393369) 3.30
FINANCE COST (1124677) (1007916) (116761) 11.58
INTEREST INCOME 202801 166788 36013 21.59
FOREIGN EXCHANGE GAINS 404031 41194 362837 880.80
EQUITY IN NET LOSSES (29706) (5052) (24654) 488.00
OTHER INCOME 331253 614806 (283553) (46.12)
INCOME BEFORE INCOME TAX 1980300 3936035 (1955735) (49.69)

PROVISION FOR (BENEFIT FROM) INCOME TAX

Current 600791 604575 (3784) (0.63)
Deferred (528732) 167883 (696615) (414.9)
NET INCOME 1908241 3163577 (1255336) (39.68)

SHORT-TERM SOLVENCY ANALYSIS

As shown on the statement of financial position, the percentage of increase in total asset
(21.45%) was greater than the percentage of increase in total current liabilities (9.68%) which is
favorable because it indicates that the company has the ability to pay for its short term
obligations.

LONG-TERM FINANCIAL POSITION ANALYSIS

Total liabilities have a greater increase of 17.98% than total equity by 5.97% which is
unfavorable. Thus, the company does borrows money or obtain more loans because its capital
structure is not enough. Total liabilities also increased at higher percentage than the percentage
of total assets with 12.59% which is also unfavorable.

PROFITABILITY
A good performance in a company indicates that the Net sales increased and Cost of Sale
decreased. However, ABS-CBN Corp. has a greater increase in cost of sale by 18.17% while its
Sale was (1.39%) which is unfavorable and may indicate that the company could unable to
manage its cost.
ABS-CBN CORPORATION AND SUBSIDIARIES
COMPARATIVE STATEMENTS OF FINANCIAL POSITION –HORIZONTAL ANALYSIS
December 31
CHANGE
2017 2016 AMOUNT %
ASSETS
CURRENT ASSETS
Cash and cash equivalents 12,346,556,000 10,964,524,000 1,382,032,000 12.60
Short term investments 1,358,429,000 3,065,793,000 (1,707,364,000) (55.69)
Trade and other receivables 10,630,014,000 10,204,118,000 425,896,000 4.17
Inventories 508,721,000 349,821,000 158,900,000 45.42
Program rights and other intangible 1,137,234,000
assets 1,067,144,000 70,090,000 6.57
Other current assets 5,062,390,000 4,141,388,000 921,002,000 22.24
TOTAL CURRENT ASSETS 31,043,344,000 29,792,788,000 1,250,556,000 4.20

NON-CURRENT ASSETS
Property and equipment 25,700,997,000 24,509,980,000 1,191,017,000 4.86
Goodwill program rights and other 13181185
intangible assets-- net of current
portion 12,530,321,000 650,864,000 5.19
Available-for-sale (AFS) 242,743,000
investments 210,219,000 32,524,000 15.47
Financial assets at Fair Value
through other comprehensive
income (FVOCI)
Investment properties 200,740,000 202,114,000 (1,374,000) (0.68)
Investment in associates and joint 524,953,000
ventures 530,005,000 (5,052,000) (0.95)
Deferred tax assets 2,462,942,000 2,498,677,000 (35,735,000) (1.43)
Other non-current assets 1,748,181,000 2,459,848,000 (711,667,000) (28.93)
Total noncurrent assets 44,061,741,000 42,941,164,000 1,120,577,000 2.61

TOTAL ASSETS 75,105,085,000 72,733.952,000 2,371,133,000 3.26

LIABILITIES AND EQUITY

Current Liabilities
Trade and other payables 13,252,577,000 13648504 (395927) (2.90)
Contact liabilities
Income tax payable 263,329,000 277239 (13910) (5.02)
Obligations for program rights 349,736,000 439316 (89580) (20.39)
Interest-bearing loans and 350,678,000
borrowings 354950 (4272) (1.20)
Total Current Liabilities 14,216,320,000 14720009 (503689) (3.42)
Noncurrent Liabilities
Interest-bearing loans and 20,036,027,000
borrowings-net of current portion 20117273 (81246) (0.40)
Obligation for program rights- net of 554,657,000
current portion 660667 (106010) (16.05)
Accrued pension of obligation and 5,757,944,000
other employee benefits 4906236 851708 17.36
Deferred tax liability 138,271,000 138271 0 0.00
Convertible note 205,380,000 221063 (15683) (7.09)
Other noncurrent liabilities 485,542,000 278730 206812 74.20
Total Noncurrent Liabilities 27,177,821,000 26322240 855581 3.25
Total Liabilities 41,394,141,000 41042249 351892 0.86

Equity Attributable to Equity

Holders of the Parent Company
Capital Stock:
Common 872,124,000 872124 0 0.00
Preferred 200,000,000 200000 0 0.00
Additional paid-in capital 4,745,399,000 4740811 4588 0.10
Treasury shares and Philippine (1,638,719,000) (1638719) 0.00
depository receipts convertible to
common shares
Exchange differences on 359,816,000
translation foreign operations 18349 341467 1860.96
Unrealized gain on AFS 180,408,000
investments 147844 32564 22.03
Share-based payment plan 4588 (4588) (100)
Retained earnings 28,560,106,000 26709981 1850125 6.93
Equity attributable to equity
holders of the parent 33,279,134,000 31055018 2224116 7.16
Non-controlling interests 431,810,000 636685 (204875) (32.18)
Total equity 33,710,944,000 31691703 2019241 6.37
TOTAL LIABILITIES AND EQUITY 75, 105,085,000 72733952 2371133 3.26

ABS-CBN CORPORATION AND SUBSIDIARIES

COMPARATIVE INCOME STATEMENT – HORIZONTAL ANALYSIS
Years Ended December 31

CHANGE
AMOUNT %
2017 2016
REVENUES 40698244 41630599 (932355) (2.24)
PRODUCTION COSTS (11833615) (12011950) 178335 (1.48)
COST OF SERVICES (10711713) (10323075) (388638) 3.76
COST OF SALES 2109942 (1693608) 3803550 (224.58)
GROSS PROFIT 16042974 17601966 (1558992) (8.86)

GENERAL AND ADMINISTRATIVE

EXPENSE (11916759) (12661479) 744720 (5.88)
FINANCE COST (1007916) (1036386) 28470 (2.75)
INTEREST INCOME 166788 220982 (54194) (24.52)
FOREIGN EXCHANGE GAINS 41194 89063 (47869) (53.75)
EQUITY IN NET LOSSES (5052) (1055) (3997) 378.86
OTHER INCOME 614806 467780 147026 31.43
INCOME BEFORE INCOME TAX 3936035 4680871 (744836) (15.91)

PROVISION FOR (BENEFIT FROM) INCOME TAX

Current 604575 1047055 (442480) (42.26)
Deferred 167883 108500 59383 54.73
NET INCOME 3163577 3525316 (361739) (10.26)

SHORT TERM SOLVENY ANALYSIS

It is shown in the financial position of ABS-CBN that the change of the percentage of their
current asset was 4.20% which is higher than the change of their current liabilities that has a
negative effect of (-3.42%). Thus, it is favorable. Because the company has enough current
assets to pay their liabilities within a short period of time. But then, it can be observed that the
revenue of the company declined, it decreases of 932,235. This shows that even though they
have a high current asset the company had experienced a problem on their income. It can also
be noticed that the cash and cash equivalent of the company is higher than the receivables of
the company. The company’s cash and cash equivalent has a change in percentage of 12.60
and the receivables had 4.17. This is beneficial for the company because it can be used in
paying their liabilities and other obligations.

LONG-TERM FINANCIAL POSITION ANALYSIS

The total equity of the company has a change in percentage of 6.37 which is higher than the
change of their liabilities which is only 0.86. These changes can be interpreted as favorable
because ABS-CBN is not too dependent on the capital of the company. And their total liabilities
are not that high, thus, it cannot cause the company a serious problem when it comes to their
obligations. It can also be noticed that there is a change in the property and equipment of the
company, 4.86 was high enough and can be considered as beneficial for the company. Aside
from it, the company’s intangible assets and available-for-sale investments also increased.
These sudden increase of non-current assets is an indication that the company has a healthy
long-term financial position.

OPERATING EFFICIENCY AND PROFITABILITY ANALYSIS

It can be noticed on the income statement that the revenue of the company declined together
with its production cost. It can be assumed that the decreased on the revenue was caused by
the decreased on the production cost. With such changes, the company’s gross profit declined
for 1,558,992. The company also experienced a high change in their expenses. These gradual
change on their income statement was alarming because it can result into a high liability in the
future.
TREND ANALYSIS
ABS-CBN CORPORATION AND SUBSIDIARIES
COMPARATIVE STATEMENTS OF FINANCIAL POSITION –TREND ANALYSIS
December 31

PERCENTAGE (%)
2018 2017 2016
ASSETS
Current Assets
Cash and cash equivalents 165.12 112.60 100
Short term investments 58.84 44.31 100
Trade and other receivables 101.62 104.17 100
Inventories 194.56 325.09 100
Program rights and other intangible assets 127.37 474.39 100
Other current assets 129.98 749.59 100
Total Current Assets 126.54 104.20 100

Non-Current Assets
Property and equipment 113.73 104.86 100
Goodwill, program rights and other intangible
assets-- net of current portion 106.23 105.19 100
Available-for-sale (AFS) investments 0.00 115.47 100
Investment properties 100.32 99.32 100
Investment in associates and joint ventures 93.44 99.05 100
Deferred tax assets 120.90 98.57 100
Other non-current assets 68.51 71.07 100
Total noncurrent assets 109.12 102.61 100
TOTAL ASSETS 116.26 103.26 100

LIABILITIES AND EQUITY

Current Liabilities
Trade and other payables 99.92 97.10 100
Contract liabilities 100
Income tax payable 75.05 94.98 100
Obligations for program rights 1005.82 796.09 100
Interest-bearing loans and borrowings 116.89 98.80 100
Total Current Liabilities 105.93 0.10 100

Noncurrent Liabilities
Interest-bearing loans and borrowings-net of
current portion 138.24 99.60 100
Obligation for program rights- net of current portion 81.97 83.95 100
Accrued pension of obligation and other employee
benefits 82.14 117.36 100
Deferred tax liability 100.00 100.00 100
Convertible note 100.07 92.91 100
Other noncurrent liabilities 179.51 174.20 100
Total Noncurrent Liabilities 126.29 863.06 100
Total Liabilities 118.99 100.86 100
Equity Attributable to Equity Holders of the
Parent Company
Capital Stock:
Common 100.00 100.00 100.00
Preferred 100.00 100.00 100
Additional paid-in capital 100.10 100.10 100
Treasury shares and Philippine depository receipts
convertible to common shares 5022.75 1960.96 100
Exchange differences on translation foreign
operations 100
Unrealized gain on AFS investments 0.00 121.99 100
Share-based payment plan 0.00 0.00 100
Fair value reserves on financial assets at FVOCI 4489.30 0.00 100
Retained earnings 113.41 113.41 100
Equity attributable to equity holders of the
parent 114.63 107.16 100
Non-controlling interests 19.84 67.82 100
Total equity 112.72 106.37 100
TOTAL LIABILITIES AND EQUITY 116.26 103.26 100

ABS-CBN CORPORATION AND SUBSIDIARIES

COMPARATIVE INCOME STATEMENT – TREND ANALYSIS
Years Ended December 31

PERCENTAGES (%)
2018 2017 2016
REVENUES 96.40 97.76 100
PRODUCTION COSTS 102.77 98.52 100
COST OF SERVICES 104.48 103.76 100
COST OF SALES (147.22) (124.58) 100
GROSS PROFIT 82.42 91.14 100
GENERAL AND ADMINISTRATIVE EXPENSE 97.23 94.12 100
FINANCE COSTS 108.52 97.25 100
INTEREST INCOME 91.77 75.48 100
FOREIGN EXCHANGE GAINS 453.65 46.25 100
EQUITY IN NET LOSSES OF ASSOCIATES AND JOINT 2815.73 478.86 100
VENTURES
OTHER INCOME 70.81 131.43 100
INCOME BEFORE INCOME TAX 42.31 84.09 100
PROVISION FOR (BENEFIT FROM) INCOME TAX 100
Current 57.38 57.74 100
Deferred (487.31) 154.73 100
9.33 66.85 100
NET INCOME 54.13 89.74 100

SHORT-TERM SOLVENCY ANALYSIS

Both current assets and current liabilities of ABS-CBN Corporation has an upward trend and this
may indicate a good current financial position of the company because is the upward trend in
current asset has a higher percentage than current liabilities.

LONG TERM FINANCIAL POSITION

Trends in total liabilities and total equity reveal that they both increased but it can be observed
that total liabilities increased in fastest rate. This can be unfavorable because it indicates that
the company is still reliant on creditor’s fund. The property, plant and equipment which
substantially increased are also favorable.
VERTICAL ANALYSIS
ABS-CBN CORPORATION AND SUBSIDIARIES
COMPARATIVE STATEMENTS OF FINANCIAL POSITION – Common-Size Percentages
December 31

PERCENTAGES (%)
2018 2017 2016
ASSETS
Current Assets
Cash and cash equivalents 21.41 16.44 15.07
Short term investments 2.13 1.81 4.22
Trade and other receivables 12.26 14.15 14.03
Inventories 0.80 1.51 0.48
Program rights and other intangible assets 1.61 6.74 1.47
Other current assets 6.37 41.33 5.69
Total Current Assets 44.59 41.33 40.96

Non-Current Assets
Property and equipment 32.97 34.22 33.70
Goodwill, program rights and other intangible assets-- net
of current portion 15.74 17.55 17.23
Available-for-sale (AFS) investments 0.00 0.32 0.29
Financial assets at Fair Value through other comprehensive
income (FVOCI) 0.32 - -
Investment properties 0.24 0.27 0.28
Investment in associates and joint ventures 0.59 0.70 0.73
Deferred tax assets 3.57 3.28 3.44
Other non-current assets 1.99 2.33 3.38
Total noncurrent assets 55.41 58.67 59.04
TOTAL ASSETS 100 100 100

LIABILITIES AND EQUITY

Current Liabilities
Trade and other payables 16.13 17.65 18.76
Contract liabilities 1.05 - -
Income tax payable 0.25 0.35 0.38
Obligations for program rights 0.52 0.47 0.06
Interest-bearing loans and borrowings 0.49 0.47 0.49
Total Current Liabilities 18.44 18.93 20.24

Noncurrent Liabilities
Interest-bearing loans and borrowings-net of current portion 32.89 26.68 27.66
Obligation for program rights- net of current portion 0.64 0.74 0.91
Accrued pension of obligation and other employee benefits 4.77 7.67 6.75
Deferred tax liability 0.16 0.18 0.19
Convertible note 0.26 0.27 0.30
Other noncurrent liabilities 0.59 0.65 0.04
Total Noncurrent Liabilities 39.31 36.19 36.19
Total Liabilities 57.75 55.11 56.43

Equity Attributable to Equity Holders of the Parent

Company
Capital Stock:
Common 1.03 1.16 1.20
Preferred 0.24 0.27 0.27
Additional paid-in capital 5.61 6.32 6.52
Treasury shares and Philippine depository receipts
convertible to common shares (1.94) (2.18) -
Exchange differences on translation foreign operations 1.09 0.48 0.03
Unrealized gain on AFS investments - 0.24 0.20
Share-based payment plan - 0.01
Fair value reserves on financial assets at FVOCI 0.24 - 0.01
Retained earnings 35.82 38.03 36.72
Equity attributable to equity holders of the parent 42.10 44.31 42.70
Non-controlling interests 0.15 0.57 0.88
Total equity 42.25 44.89 43.57
TOTAL LIABILITIES AND EQUITY 100 100 100

ABS-CBN CORPORATION AND SUBSIDIARIES

COMPARATIVE INCOME STATEMENT – Common-Size Percentages
Years Ended December 31

PERCENTAGES (%)
2018 2017 2016
REVENUES 100 100 100
PRODUCTION COSTS 30.76 29.08 28.85
COST OF SERVICES 26.88 26.32 24.80
COST OF SALES 6.21 5.18 4.07
GROSS PROFIT 36.15 39.42 42.28
GENERAL AND ADMINISTRATIVE EXPENSE 30.68 29.28 30.41
FINANCE COSTS 2.80 2.48 2.49
INTEREST INCOME 0.51 0.41 0.53
FOREIGN EXCHANGE GAINS 1.01 0.10 0.21
EQUITY IN NET LOSSES OF ASSOCIATES AND
JOINT VENTURES (0.07) (0.01) (0.003)
OTHER INCOME 0.83 1.51 1.12
INCOME BEFORE INCOME TAX 4.93 9.67 11.24
PROVISION FOR (BENEFIT FROM) INCOME TAX
Current 1.50 1.49 2.52
Deferred (1.32) 0.41 0.26

NET INCOME 4.76 7.77 8.47

EVALUATION OF FINANCIAL POSITION

ABS-CBN’ statement of financial position reveals that its current asset is increasing
accompanied by decreasing current liabilities during the period from December 31, 2016 to
December 31, 2018 this is favorable for the company.

PROFITABILITY

It is shown in the income statement that its production cost is gradually increasing from2016 to
2018. These changes would result to a decrease of gross profit which is unfavorable tendency
for the company. It is also shown that income before tax is decreasing at a faster rate. Hence,
its net income is also decreasing.
ABS-CBN CORPORATION AND SUBSIDIES
FINANCIAL RATIOS
Years ended December 31
LIQUIDITY RATIOS
2018 2017 2016
Current Ratio 2.18 2.02
2.42
Quick Ratio or Acid Test Ratio 0.96 0.95
1.28
Cash Ratio 1.83 1.74
2.07
Cash Flow Ratio 0.5

Cash Flow Liquidity Ratio 1.71 1.43 1.53

Net Working Capital Ratio 0.26 0.22 0.21

LEVERAGE RATIOS

Financial Leverage Ratio 2.37 2.23 2.30

Degree of Financial Leverage (DFL) 1.45 1.20 1.17

Degree of Operating Leverage 28.19 5.97

Degree of Total Leverage 28.45 4.58

CAPITAL STRUCTURE AND SOLVENCY

Debt to Equity Ratio 1.37 1.23 1.30

Long-Term Debt to Equity Ratio 0.93 0.81 0.83

Debt to Total Assets Ratio 0.58 0.55 0.56

EARNINGS COVERAGE

Interest Coverage (Times Interest Earned)

2.71 5.09 5.65
Ratio

ACTIVITY RATIOS

Accounts Receivable Turnover Ratio 3.82 3.91

Days Sales in Receivables 96 days 94 days

Inventory Turnover Ratio 4.19 4.92

Days Sales in Inventory
87 days 74 days

Operating Cycle 104.02 99.7

Total Asset Turnover Ratio 0.50 0.55

Fixed Asset Turnover Ratio 1.50 1.62

PROFITABLITTY RATIOS

Gross Profit Margin Percentage 36.15 39.42 42.28

LIQUIDITY
This company appears to have a good liquidity position. Its current ratio is within the standard of
2:1 and this indicates that the company has adequate funds to pay for its current liabilities and
other payments.
LEVERAGE
This company has a good utilization of assets because its return on equity is greater than its
return on assets.
CAPITAL STRUCTURE AND SOLVENCY
It has a good debt to equity ratio of 1:1 that could mean that the owners and creditors have an
equal stake in the company. The financing of assets both comes from creditors with the amount
of financing and owners in the form of equity. Debt to total assets ratio is favorable which
indicates that the company is lesser reliance to creditors to finance its total assets. This also
means that they can manage properly their liabilities. Its long-term debt is lesser than its total
equity which is also good.
ACTIVITY
This company has a good inventory management reflected by the fact that it has a high
inventory turnover ratio that may also mean that it is not holding excessive amounts of
inventory.
PROFITABILITY
ABS-CBN network's revenue has been declining over the 3 years. The advertising and sales of
service has been decreasing and that is the probable reason of the decline of revenue. The
gross profit margin on the year 2018 has dropped compared to 2017 due to the sudden
increase in the productions costs specifically the amortization of program and rights, travel and
transportation, license and royalty and catering and food expenses. The net profit margin has
been drastically decreasing due to the decrease of its revenues and the increased of
expenses in line with the production.
The company has a greater Return on Equity than the Return on Assets, which is good. It
indicates that the company is increasing its generation of profit without needing much capital. It
also tells how well the management of ABS deploys shareholder capital. However, the ROA,
ROE, and ROCE were all significantly decreased from 2016 to 2018 because again the
earnings has been declined caused by decrease of revenue.
CASH FLOW
The company has positive net cash from operating activities but it generates more cash in year
2016 from its operating activities which means that they are making so much money than spent
on its normal operating expenses that would also able to make new investments from other
companies or property, plant and equipment, as well as paying its long-term debt.

GMA Network Inc.

Background of Study

GMA is one of the biggest television network in the Philippines. It was founded in the year
1950 by Robert La Rue Stewart. Its name began as Republic Broadcasting System (RBS) and
radio broadcasting was its main production. Later on, it ventured into television and started
broadcasting on Channel 7. In 1974, Stewart ceded the network to Felipe L. Gozon, Menardo R.
Jimenez and Gilberto M. Duavit. They took over the company and renamed to GMA (Greater
Manila Area) which was later changed into Global Media Arts. Today, GMA Network, Inc. is one
of the best free-to-air broadcasting company. Their production is primarily engaged in television
and radio broadcasting. Aside from that, they are involved in a wide array of media related
services such as film production, music publishing and distribution, and audio-visual production.
GMA also has a foundation named GMA Kapuso Foundation that aims to help people who are
in need that were affected of calamities.
GMA NETWORK, INC. AND SUBSIDIARIES
COMPARATIVE STATEMENT OF FINANCIAL POSITION
December 31

2018 2017 2016

ASSETS    
Current Assets    
Cash and Cash Equivalent 2,559,105,322 2,279,838,495 3,419,014,205
Trade and other receivables 4,811,973,802 4,905,864,211 5,270,306,881
Programs and other rights 736,461,608 1,140,223,422 860,369,128
Prepaid expense and other current assets 644,937,919 685,992,630 833,817,514
Total Current Assets 8,752,478,651 9,011,918,758 10,383,507,728
Noncurrent Assets    
Property and equipment:    
2,642,298,44
At cost 2,665,618,075 2,776,484,984
9
2,803,196,18
At revalued cost 1,805,234,093 1,805,146,475
4
245,741,88
Available for Sale (AFS) financial Assets - 243,391,881
1
Financial Assets at fair value through other 240,255,8
comprehensive income (FVOCI) 46 - -
Investment and advances 158,215,331 151,103,271 150,835,949
Programs and other rights 200,772,808 205,914,090 200,262,381
Investment properties 40,003,984 51,048,514 53,314,111
Deferred income taxes- net 242,939,864 291,169,389 291,512,030
212,372,3 365,366,21
Other noncurrent assets 154,319,976
45 1
6,540,054,81
Total Noncurrent Assets 5,781,195,524 5,675,267,787
1
TOTAL ASSETS 15,292,533,462 14,793,114,282 16,058,775,515
     
LIABILITIES AND EQUITY      
Current Liabilities    
Trade payables and other current liabilities 2,160,986,267 2,386,901,598 2,441,945,601
500,000,00
Short-term loans 500,000,000 646,360,000
0
346,686,30
Income tax Payable 424,940,559 496,104,301
4
Obligation for program and other rights 119,646,2 139,571,49 76,847,692
69 3
17,053,7 15,437,10
Dividends payable 12,705,059
76 2
Total Current Liabilities 3,222,626,871 3,388,596,497 3,673,962,653
     
Noncurrent Liabilities    
Pension Liabilities 2,182,994,135 1,670,157,190 1,644,323,747
Other Long-term employee benefits 298,843,728 284,654,028 284,556,515
Total Noncurrent liabilities 2,481,837,863 1,954,811,218 1,928,880,262
Total Liabilities 5,704,464,734 5,343,407,715 5,602,842,915
     
Equity    
Capital stock 4,864,692,000 4,864,692,000 4,864,692,000
1,659,035,19
Additional paid-in capital 1,659,035,196 1,659,035,196
6
1,710,505,18
Revaluation Increment on Land- net of tax 1,017,247,029 1,017,247,029
8
Remeasurement loss on retirement plans- (1,038,041,11 (666,224,427
(664,042,118)
net of tax 8) )
Net unrealized loss on AFS financial assets- (8,092,181
(10,113,681)
net of tax - )
Net unrealized loss on financial assets at (5,051,34
FVOCI- net of tax 5) - -
2,368,404,46
Retained Earnings 2,570,710,400 3,574,757,302
8
(28,483,17 (28,483,171
Treasury stocks (28,483,171)
1) )
Underlying Shares of the acquired Philippine (5,790,01 (5,790,016
(5,790,016)
Deposit Receipts 6) )
Total equity attributable to equity holders of 9,525,271,20
9,403,094,830 10,407,302,541
the Parents Company 2
62,797,5 46,611,73
Non-controlling interest 48,630,059
26 7
9,588,068,72
Total equity 9,449,706,567 10,455,932,600
8
     
TOTAL LIABILITIES AND EQUITY 15,292,533,462 14,793,114,282 16,058,775,515

GMA NETWORK, INC. AND SUBSIDIARIES

COMPARATIVE INCOME STATEMENT
Years Ended December 31

2018 2017 2016

REVENUES 15,236,192,369 15,602,292,188 16,953,948,299
PRODUCTION COST 6,483,703,064 6,682,296,268 6,641,457,517
GROSS PROFIT 8,752,489,305 8,919,995,920 10,312,490,782
GENERAL AND ADMINISTRATIVE 5,514,342,920 5,384,409,786 5,236,089,061
EXPENSES
OTHER INCOME (EXPENSE) - NET
Interest Expense (36,251,389) (23,010,666) (16,905,154)
Interest Income 25,455,860 23,776,178 23,650,808
Net foreign currency exchange gain 19,221,001 2,300,851 21,044,145
Equity in net earnings of joint ventures 6,351,690 329,580 2,758,875
Others – net 79,113,895 119,017,401 100,865,087
93,891,057 122,413,344 131,413,761
INCOME BEFORE INCOME TAX 3,332,037,442 3,657,999,478 5,207,815,482
PROVISION FOR (BENEFIT FROM)
INCOME TAX
Current 1,056,853,906 1,094,886,107 1,510,923,590
Deferred (48,828,615) 3,383,736 50,296,632
1,008,025,291 1,098,269,843 1,561,220,222
NET INCOME 2,324,012,151 2,559,729,635 3,646,592,260

GMA NETWORK, INC. AND SUBSIDIARIES

COMPARATIVE CASH FLOW
December 31

2018 2017 2016

CASH FLOWS FROM OPERATING
ACTIVITIES
Income before income tax 3,332,037,442 3,657,999,478 5,207,815,482
Adjustments to reconcile income before
income tax to net cash flows:
Program and other rights usage 871,451,221 905,254,190 836,176,965
Depreciation and amortization 586,448,899 631,515,648 723,598,772
Pension expense 312,489,341 289,541,781 227,546,241
Contributions to retirement plan assets (279,003,770) (259,000,000) (200,000,000)
Provisions for doubtful accounts 109,631,061 8,253,285 25,151,364
Interest expense 36,251,389 23,010,666 16,905,154
Interest income (25,455,860) (23,776,178) (23,650,808)
Amortization of software costs 23,173,008 23,362,883 17,173,566
Gain on sale of property and equipment and (19,829,189) (27,060,463) (29,717,284)
investment properties
Net unrealized foreign currency exchange loss 5,185,384 (59,133,380) (48,144,387)
Equity in net earnings of joint ventures (6,351,690) (329,580) (2,758,875)
Dividend income (2,499,895) (132,811) (2,550,000)
Provision for impairment of investment 2,048,592 --- ---
properties
Reversal of long-outstanding payables -- (32,999,414) (3,233,336)
Working capital changes:
Decreases (increases) in:
Trade and other receivables (128,392,550) 346,895,501 (889,975,687)
Program and other rights (462,548,125) (1,197,820,078) (704,201,246)
Prepaid expenses and other current assets 41,054,711 (34,932,681) 235,211,693
Increases (decreases) in:
Trade payables and other current liabilities (230,194,345) (24,478,909) 255,213,597
Obligations for program and other rights (21,536,158) 75,197,668 (143,634,530)
Other long-term employee benefits 14,189,700 97,513 (11,160,736)
Benefits paid out of Group’s own funds (48,311,185) (7,825,922) (7,646,509)

Cash flows provided by operations 4,109,837,981 4,293,639,197 5,478,119,436

Income taxes paid (978,599,651) (1,244,304,104) (1,384,682,174)
Interest received 24,382,746 23,158,153 21,769,542
Net cash flows from operating activities 3,155,621,076 3,072,493,246 4,115,206,804

CASH FLOWS FROM INVESTING

ACTIVITIES
Acquisitions of:
Property and equipment (519,420,168) (523,727,612) (444,383,976)
Software costs (3,504,612) (41,661,384) (454,017)
Land at revalued amount (7,593,293) (1,364,718) (2,623,618)
Investment properties -- -- (43,811)
Proceeds from:
Sale of property and equipment 26,774,646 29,578,768 33,113,635
Sale of investment properties 4,104,000 --- --
Decreases (increases) in other noncurrent 87,562,847 (5,824,646) 9,464,489
assets
Return of investment in financial asset at 6,089,790 -- --
FVOCI
Cash dividends received 883,221 132,811 --
Advances to an associate and joint ventures (1,162,148) --- (424,498)
Collection from an associate and joint ventures 401,778 --- --
Net cash flows used in investing activities (405,863,939) (542,866,781) (405,351,796)
CASH FLOWS FROM FINANCING
ACTIVITIESS
Proceeds from availment of short-term loans 1,500,000,000 1,500,000,000 500,000,000
Payments of:
Cash dividends (2,436,132,546) (3,563,062,816) (1,955,312,493)
Short-term loans (1,500,000,000) (1,647,452,000) (1,017,624,500)
Interest expense (36,125,000) (22,967,610) (17,597,313)
Net cash flows used in financing activities (2,472,257,546) (3,733,482,426) (2,490,534,306)

NET INCREASE (DECREASE) IN CASH AND 277,499,591 (1,203,855,961) 1,219,320,702

CASH EQUIVALENTS

EFFECT OF EXCHANGE RATE CHANGES 1,767,236 64,680,251 39,395,378

ON CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT 2,279,838,495 3,419,014,205 2,160,298,125

BEGINNING OF YEAR

CASH AND CASH EQUIVALENTS AT END 2,559,105,322 2,279,838,495 3,419,014,205

OF YEAR
HORIZONTAL ANALYSIS
GMA NETWORK, INC. AND SUBSIDIARIES
COMPARATIVE STATEMENT OF FINANCIAL POSITION – HORIZONTAL ANALYSIS
December 31

CHANGE
2018 2017 AMOUNT %
ASSETS
Current Assets
Cash and cash equivalents 2,559,105,322 2,279,838,495 279,266,827 12.25
Trade and other receivables 4,811,973,802 4,905,864,211 (93,890,409) (1.91)
Program and other rights (403,761,814
736,461,608 1,140,223,422 ) (35.41)
Prepaid expenses and other current 644,937,919 685,992,630 (41,054,711) (5.98)
(259,440,107
Total Current Assets 8,752,478,651 9,011,918,758 ) (2.88)

Noncurrent Assets
Property and equipment
At cost 2,642,298,449 2,665,618,075 (23,319,626) (0.87)
At revalued amounts 2,803,196,184 1,805,234,093 997,962,091 55.28
Available-for-sale (AFS) financial (245,741,881
assets - 245,741,881 ) (100.00)
Financial assets at fair value through
other comprehensive income (FVOCI)

240,255,846 - 240,255,846 -
Investment and advances 158,215,331 151,103,271 7,112,060 4.71
Program and other rights 200,772,808 205,914,090 (5,141,282) (2.50)
Investment properties 40,003,984 51,048,514 (11,044,530) (21.64)
Deferred income tax assets - net 242,939,864 291,169,389 (48,229,525) (16.56)
Other noncurrent assets (152,993,866
212,372,345 365,366,211 ) (41.87)
Total Noncurrent Assets 6,540,054,811 5,781,195,524 758,859,287 13.13
15,292,533,46 14,793,114,28
TOTAL ASSETS 2 2 499,419,180 3.38

LIABILITIES AND EQUITY

Current Liabilities
Trade payables and other current (225,915,331
liabilities 2,160,986,267 2,386,901,598 ) (9.46)
Short-term loans 500,000,000 500,000,000 - 0.00
Income tax payable 424,940,559 346,686,304 78,254,255 22.57
Obligations for program and other
rights 119,646,269 139,571,493 (19,925,224) (14.28)
Dividends payable 17,053,776 15,437,102 1,616,674 10.47
Total Current Liabilities 3,222,626,871 3,388,596,497 (165,969,626 (4.90)
)

Noncurrent Liabilities
Pension liability 2,182,994,135 1,670,157,190 512,836,945 30.71
Other long-term employee benefits 298,843,728 284,654,028 14,189,700 4.98
Total Noncurrent Liabilities 2,481,837,863 1,954,811,218 527,026,645 26.96

Total Liabilities 5,704,464,734 5,343,407,715 361,057,019 6.76

Equity
Capital stock 4,864,692,000 4,864,692,000 - 0.00
Additional paid-in capital 1,659,035,196 1,659,035,196 - 0.00
Revaluation increment on land - net of
tax 1,710,505,188 1,017,247,029 693,258,159 68.15
Remeasurement loss on retirement (1,038,041,118 (371,816,691
plans - net of tax ) (666,224,427) ) 55.81
Net unrealized loss on AFS financial
assets - net of tax - (8,092,181) 8,092,181 (100.00)
Net unrealized loss on financial assets
at FVOCI - net of tax (5,051,345) - (5,051,345) -
Retained earnings (202,305,932
2,368,404,468 2,570,710,400 ) (7.87)
Treasury stocks (28,483,171) (28,483,171) - 0.00
Underlying shares of the acquired
Philippine Deposit Receipts (5,790,016) (5,790,016) - 0.00
Total equity attributable to equity
holders of the Parent Company 9,525,271,202 9,403,094,830 122,176,372 1.30
Non-controlling interests 62,797,526 46,611,737 16,185,789 34.72
Total Equity 9,588,068,728 9,449,706,567 138,362,161 1.46
15,292,533,46 14,793,114,28
TOTAL LIABILITIES AND EQUITY 2 2 499,419,180 3.38
GMA NETWORK, INC. AND SUBSIDIARIES
COMPARATIVE INCOME STATEMENT – HORIZONTAL ANALYSIS
Years Ended December 31

2018 2017 CHANGE

AMOUNT %
REVENUES 15,236,192,369 15,602,292,188 (366,099,819) (2.35)
PRODUCTION COST 6,483,703,064 6,682,296,268 (198,593,204) (2.97)
GROSS PROFIT 8,752,489,305 8,919,995,920 (167,506,615) (1.88)
GENERAL AND 5,514,342,920 5,384,409,786
129,933,134 2.41
ADMINISTRATIVE EXPENSES
OTHER INCOME (EXPENSE) –    
NET
Interest Expense -36,251,389 -23,010,666
(13,240,723) 57.54
Interest Income 25,455,860 23,776,178 1,679,682 7.06
Net foreign currency exchange 19,221,001 2,300,851
16,920,150 735.39
gain
Equity in net earnings of joint 6,351,690 329,580
6,022,110 1827.21
ventures
Others – net 79,113,895 119,017,401 (39,903,506) (33.53)
93,891,057 122,413,344 (28,522,287) (23.30)
INCOME BEFORE INCOME TAX 3,332,037,442 3,657,999,478 (325,962,036) (8.91)
PROVISION FOR (BENEFIT    
FROM) INCOME TAX
Current 1,056,853,906 1,094,886,107 (38,032,201) (3.47)
Deferred -48,828,615 3,383,736 (52,212,351) (1543.04)
1,008,025,291 1,098,269,843 (90,244,552) (8.22)

NET INCOME 2,324,012,151 2,559,729,635 (235.717.484) (9.21)

SHORT TERM SOLVENCY ANALYSIS:
It is shown in the financial position that the change of the percentage of the total assets had a
negative effect of (-2.88%) while the current liabilities had a change of (-4.90%), thus, resulting
to unfavorable. It is because the company do not have enough assets to pay for the liabilities
that the company had incurred. It can be noticed that there is a gradual change in the current
assets and current liabilities of the company, as their current assets decreases their current
liability increases, hence, it became a factor why they cannot pay their debts.

LONG TERM FINANCIAL POSITION ANALYSIS

The total liabilities of the company resulted into a change of percentage of 6.76% which is much
higher compared to the total equity of the company that is only 1.46%. These changes can be
interpreted as unfavorable. Because it indicates that the company’s capital is at risk to be used
in complying with the liabilities of the company. It also shows that the company has too much
debt which is detrimental for the company.

OPERATING EFFICIENCY AND PROFITABILITY ANALYSIS

The sales revenue of the company decreased by (-2.35%) while the production cost was also
decreased by (-2.97). It is a clear manifestation that the company’s activity is not enough to
compensate the expenses that they have incurred. These changes affected the gross profit of
the company negatively. Hence, the profitability of the company is at volatile state.
GMA NETWORK, INC. AND SUBSIDIARIES
COMPARATIVE STATEMENT OF FINANCIAL POSITION – HORIZONTAL ANALYSIS
December 31
CHANGE
2017 2016 AMOUNT %
ASSETS
Current Assets
Cash and cash equivalents 2,279,838,495 3,419,014,205 (1,139,175,710) (33.32)

Trade and other receivables 4,905,864,211 5,270,306,881 (364,442,670) (6.92)

Program and other rights 1,140,223,422 860,369,128 279,854,294 32.53

Prepaid expenses and other
685,992,630 833,817,514 (147,824,884) (17.73)
current
Total Current Assets 9,011,918,758 10,383,507,728 (1,371,588,970) (13.21)

Noncurrent Assets
Property and equipment
At cost 2,665,618,075 2,776,484,984 (110,866,909) (3.99)
At revalued amounts 1,805,234,093 1,805,146,475 87,618 0.00
Available-for-sale (AFS)
245,741,881 243,391,881 2,350,000 0.97
financial assets
Financial assets at fair value
through other comprehensive - - - -
income (FVOCI)
Investment and advances 151,103,271 150,835,949 267,322 0.18
Program and other rights 205,914,090 200,262,381 5,651,709 2.82
Investment properties 51,048,514 53,314,111 (2,265,597) (4.25)
Deferred income tax assets –
291,169,389 291,512,030 (342,641) (0.12)
net
Other noncurrent assets 365,366,211 154,319,976 211,046,235 136.76
Total Noncurrent Assets 5,781,195,524 5,675,267,787 105,927,737 1.87
TOTAL ASSETS 14,793,114,282 16,058,775,515 (1,265,661,233) (7.88)

LIABILITIES AND EQUITY

Current Liabilities
Trade payables and other
2,386,901,598 2,441,945,601 (55,044,003) (2.25)
current liabilities
Short-term loans 500,000,000 646,360,000 (146,360,000) (22.64)
Income tax payable 346,686,304 496,104,301 (149,417,997) (30.12)
Obligations for program and
139,571,493 76,847,692 62,723,801 81.62
other rights
Dividends payable 15,437,102 12,705,059 2,732,043 21.50
Total Current Liabilities 3,388,596,497 3,673,962,653 (285,366,156) (7.77)

Noncurrent Liabilities
Pension liability 1,670,157,190 1,644,323,747 25,833,443 1.57
Other long-term employee
284,654,028 284,556,515 97,513 0.03
benefits
Total Noncurrent Liabilities 1,954,811,218 1,928,880,262 25,930,956 1.34
Total Liabilities 5,343,407,715 5,602,842,915 (259,435,200) (4.63)

Equity
Capital stock 4,864,692,000 4,864,692,000 - 0.00
Additional paid-in capital 1,659,035,196 1,659,035,196 - 0.00
Revaluation increment on
1,017,247,029 1,017,247,029 - 0.00
land - net of tax
Remeasurement loss on
(666,224,427) (664,042,118) (2,182,309) 0.33
retirement plans - net of tax
Net unrealized loss on AFS
(8,092,181) (10,113,681) 2,021,500 (19.99)
financial assets - net of tax
Net unrealized loss on
financial assets at FVOCI - - - - -
net of tax
Retained earnings 2,570,710,400 3,574,757,302 (1,004,046,902) (28.09)

Treasury stocks (28,483,171) (28,483,171) - 0.00

Underlying shares of the
acquired Philippine Deposit (5,790,016) (5,790,016) - 0.00
Receipts
Total equity attributable to
equity holders of the Parent 9,403,094,830 10,407,302,541 (1,004,207,711) (9.65)
Company
Non-controlling interests 46,611,737 48,630,059 (2,018,322) (4.15)
Total Equity 9,449,706,567 10,455,932,600 (1,006,226,033) (9.62)
TOTAL LIABILITIES AND
14,793,114,282 16,058,775,515 (1,265,661,233) (7.88)
EQUITY
GMA NETWORK, INC. AND SUBSIDIARIES
COMPARATIVE INCOME STATEMENT – HORIZONTAL ANALYSIS
Years Ended December 31

2017 2016 CHANGE

AMOUNT %
REVENUES 15,602,292,188 16,953,948,299 (1,351,656,111) (7.97)
PRODUCTION COST 6,682,296,268 6,641,457,517 40838751 0.61
GROSS PROFIT 8,919,995,920 10,312,490,782 (1,392,494,862) (13.50)
GENERAL AND 5,384,409,786 5,236,089,061
148,320,725 2.83
ADMINISTRATIVE EXPENSES
OTHER INCOME (EXPENSE) –    
NET
Interest Expense -23,010,666 -16,905,154 (6,105,512) 36.12
Interest Income 23,776,178 23,650,808 125,370 0.53
Net foreign currency exchange 2,300,851 21,044,145
(18,743,294) (89.07)
gain
Equity in net earnings of joint 329,580 2,758,875
(2,429,295) (88.05)
ventures
Others – net 119,017,401 100,865,087 18,152,314 18.00
122,413,344 131,413,761 (9,000,417) (6.85)
INCOME BEFORE INCOME TAX 3,657,999,478 5,207,815,482 (1,549,816,004) (29.76)
PROVISION FOR (BENEFIT    
FROM) INCOME TAX
Current 1,094,886,107 1,510,923,590 (416,037,483) (27.54)
Deferred 3,383,736 50,296,632 (46,912,896) (93.27)
1,098,269,843 1,561,220,222 (462,950,379) (29.65)

(1,086,862,625) (29.80)
NET INCOME 2,559,729,635 3,646,592,260
SHORT-TERM SOLVENCY
It is shown in the financial position that there is a sudden decreased on the change of
percentage of the current assets which has a (-13.21%) and its current liabilities had a change
in percentage of -7.77. These changes can be deemed to be unfavorable because it is clear that
the company do not own enough assets in order to pay its liabilities. It is also shown that the
trade and other receivables had declined in comparison to the previous year (2016). Their cash
and cash equivalent is higher than the receivables of the company, which is beneficial for them
because it can be used in paying their liabilities.

LONG-TERM FINANCIAL POSITION ANALYSIS

There is a change in the total liabilities of the company with a percentage of (-4.63%) while the
equity has also a negative change of (-9.62). The negative liability might be one of the factors
why the equity of the company also declined because the company used the funds for the
equity in order to pay its debts. Thus, these changes can be interpreted as unfavorable because
such changes had also a negative effect on the company’s long-term financial position.

OPERATING EFFICIENCY AND PROFITABILITY ANALYSIS

The sales revenue of the company had a negative change to its percentage which resulted to a
(-7.97) while its production cost is much higher than the revenue of the company with a
percentage of 0.61. These changes can be deemed as unfavorable. It is because such changes
resulted into a negative gross profit of the company. The company’s revenue was not able to
compensate the production cost that was used.
TREND ANALYSIS

GMA NETWORK, INC. AND SUBSIDIARIES

COMPARATIVE STATEMENT OF FINANCIAL POSITION – TREND ANALYSIS
December 31

PERCENTAGES (%)
2018 2017 2016
ASSETS
Current Assets
Cash and cash equivalents 74.85 66.68 100
Trade and other receivables 91.30 93.08 100
Program and other rights 85.60 132.53 100
Prepaid expenses and other current 77.35 82.27 100
Total Current Assets 84.29 86.79 100

Noncurrent Assets
Property and equipment
At cost 95.17 96.01 100
At revalued amounts 155.29 100.00 100
Available-for-sale (AFS) financial assets 0.00 100.97 100
Financial assets at fair value through other
comprehensive income (FVOCI) -- -- --
Investment and advances 104.89 100.18 100
Program and other rights 100.25 102.82 100
Investment properties 75.03 95.75 100
Deferred income tax assets – net 83.34 99.88 100
Other noncurrent assets 137.62 236.76 100
Total Noncurrent Assets 115.24 101.87 100
TOTAL ASSETS 95.23 92.12 100

LIABILITIES AND EQUITY

Current Liabilities
Trade payables and other current liabilities 88.49 97.75 100
Short-term loans 77.36 77.36 100
Income tax payable 85.66 69.88 100
Obligations for program and other rights 155.69 181.62 100
Dividends payable 134.23 121.50 100
Total Current Liabilities 87.72 92.23 100

Noncurrent Liabilities
Pension liability 132.76 101.57 100
Other long-term employee benefits 105.02 100.03 100
Total Noncurrent Liabilities 128.67 101.34 100
Total Liabilities 101.81 95.37 100

Equity
Capital stock 100.00 100.00 100
Additional paid-in capital 100.00 100.00 100
Revaluation increment on land - net of tax 168.15 100.00 100
Remeasurement loss on retirement plans - net of tax 156.32 100.33 100
Net unrealized loss on AFS financial assets - net of tax 0.00 80.01 100
Net unrealized loss on financial assets at FVOCI - net
of tax - - -
Retained earnings 66.25 71.91 100
Treasury stocks 100.00 100.00 100
Underlying shares of the acquired Philippine Deposit
Receipts 100.00 100.00 100
Total equity attributable to equity holders of the Parent
Company 91.52 90.35 100
Non-controlling interests 129.13 95.85 100
Total Equity 91.70 90.38 100
TOTAL LIABILITIES AND EQUITY 95.23 92.12 100

GMA NETWORK, INC. AND SUBSIDIARIES

COMPARATIVE INCOME STATEMENT - TREND ANALYSIS
Years Ended December 31

PERCENTAGE (%)
2018 2017 2016
REVENUES 89.87 92.03 100
PRODUCTION COST 97.03 100.61 100
GROSS PROFIT 98.12 86.50 100
GENERAL AND ADMINISTRATIVE EXPENSES 102.41 102.83 100
OTHER INCOME (EXPENSE) - NET
Interest Expense 157.54 136.12 100
Interest Income 107.06 100.53 100
Net foreign currency exchange gain 835.39 10.93 100
Equity in net earnings of joint ventures 1927.21 11.95 100
Others – net 66.47 118.00 100
76.70 93.15 100
INCOME BEFORE INCOME TAX 91.09 70.24 100
PROVISION FOR (BENEFIT FROM) INCOME TAX
Current 96.53 72.46 100
Deferred (1443.04) 6.73 100
91.78 70.35 100
NET INCOME 90.79 70.20 100
GMA NETWORK, INC. AND SUBSIDIARIES
COMPARATIVE STATEMENT OF CASH FLOW – TREND ANALYSIS
December 31

ITEMS PERCENTAGES (%)

2018 2017 2016
CASH FLOW FROM OPERATING ACTIVITIES 63.98 70.24 100
Income before income tax to Net cash flow:
Program and other rights usage 104.22 108.26 100
Depreciation and amortization 81.05 87.27 100
Pension Expense 137.33 127.25 100
Contribution to retirement plan assets 139.50 129.50 100
Provisions for doubtful accounts 435.89 32.81 100
Interest expense 214.44 136.12 100
Interest income 107.63 100.53 100
Amortization of software costs 134.93 136.04 100
Gain on sale on property and equipment and investment
properties 66.73 91.06 100
Net unrealized foreign currency exchange loss (10.77) 122.83 100
Equity in net earnings of joints ventures 230.23 11.95 100
Dividends Income 98.04 5.21 100
Provision for impairment of investment properties
Reversal of long-outstanding payables 0.00 1020.60 100
Working capital Changes:
Decrease (increase) in:
Trade and other receivables 14.43 (38.98) 100
Programs and other rights 65.68 170.10 100
Prepaid expense and other current assets 17.45 (14.85) 100
Increase (Decrease) in:
Trade payables and other current liabilities (90.20) (9.59) 100
Obligation for program and other rights 14.99 (52.35) 100
Other Long term employees benefits (127.14) (0.87) 100
Benefits paid out of Group's own Funds 631.81 102.35 100
Cash flows Provided By Operation 75.02 78.38 100
Income taxes paid 70.67 89.86 100
Interest received 112.00 106.38 100
Net Cash flows from operation activities 76.68 74.66 100

CASH FLOWS FROM INVESTING AVTIVITIES:

Acquisitions of:
Property and equipment 116.89 117.85 100
software costs 771.91 9176.17 100
Land at revalued amount 289.42 52.02 100
Investment properties 0.00 0.00 100
Proceed from:
Sale of property and equipment 80.86 89.33 100
Sale of investment properties
Decrease (increase) in other noncurrent assets 925.17 -61.54 100
Return in investment in financial assets at FVOCI
Cash dividends received
Advances to an associates and joint ventures 273.77 100.00
Collection from an associates and joint ventures
Net cash flows used in investing activities: 100.13 133.92 100

CASH FLOWFROM FINANCING ACTIVITIES

Proceeds from availments of short term loans 300.00 300.00 100
Payments of:
Cash dividends 124.59 182.22 100
Short-term loans 147.40 161.89 100
Interest expense 205.29 130.52 100
Net cash flows used in financing activities 99.27 149.91 100
SHORT TERM SOLVENCY
The current assets were decreased by 15. 71 % and the current liabilities has also decreased
by 12. 28%. The current financial position of GMA Inc. is not good because even the current
liabilities have been decreasing throughout the years the currents assets is also decreasing.
The trend percentages shows that cash and cash equivalents, trade and others receivables,
program and other rights , prepaid expenses and other current assets shows that there is a
downward tendencies as years passes by. The drastic decline in cash and cash equivalent is
not favorable. This unfavorable tendency indicates that cash collected flow from operating
activities has been lower and the decrease of the collection of trade and other receivables. The
drastic decrease in the program and rights is unfavorable because net sales of GMA have
decreased and this unfavorable situation indicates that not all programs are in the liking of the
viewers.

LONG TERM FINANCIAL POSITION

A comparison of total liabilities and equity reveals that the total liability is decreasing this is a
favorable tendency indicates that there is a fast payment of debt. While the equity is also
decreasing this indicates that there is unfavorable tendency that causes the creditors margin of
safety decreased significantly.

PROFITABILITY
The trend percentages of revenues and production cost show a downward trend. These
percentages reflect that a favorable in the management because they limit the cost but also
unfavorable because the revenues in also showing a decline percentage over the years.
An unfavorable tendency is shown by the general and administrative expenses and the other
expenses because it shows that the percentages of these expenses is increasing fast and
revenues is declining. GMA could earn more if they could earn more profit and control their
expenses properly.
VERTICAL ANALYSIS
GMA NETWORK, INC. AND SUBSIDIARIES
COMPARATIVE STATEMENT OF FINANCIAL POSITION – Common-Size Percentages
December 31

PERCENTAGES (%)
2018 2017 2016
ASSETS
Current Assets
Cash and cash equivalents 16.73 15.41 21.29
Trade and other receivables 31.47 33.16 32.82
Program and other rights 4.82 7.71 5.36
Prepaid expenses and other current 4.22 5.87 5.19
Total Current Assets 57.23 62.16 64.66

Noncurrent Assets
Property and equipment
At cost 17.28 18.01 17.29
At revalued amounts 18.33 12.21 11.24
Available-for-sale (AFS) financial assets - 1.66 1.52
Financial assets at fair value through other
comprehensive income (FVOCI) 1.57 - -
Investment and advances 1.03 1.02 0.94
Program and other rights 1.31 1.39 1.25
Investment properties 0.26 0.35 0.33
Deferred income tax assets - net 1.59 1.97 1.82
Other noncurrent assets 1.39 1.23 0.96
Total Noncurrent Assets 42.77 37.84 35.34
TOTAL ASSETS 100 100 100

LIABILITIES AND EQUITY

Current Liabilities
Trade payables and other current liabilities 14.13 16.14 15.21
Short-term loans 3.27 3.38 4.02
Income tax payable 2.78 2.34 3.09
Obligations for program and other rights 0.78 0.94 0.48
Dividends payable 0.11 0.10 0.08
Total Current Liabilities 21.07 22.91 22.88

Noncurrent Liabilities
Pension liability 14.27 11.29 10.24
Other long-term employee benefits 1.95 1.92 1.77
Total Noncurrent Liabilities 16.23 13.21 12.01
Total Liabilities 37.30 36.12 34.89

Equity
Capital stock 31.81 32.88 30.29
Additional paid-in capital 10.85 11.21 10.33
Revaluation increment on land - net of tax 11.19 6.88 6.33
Remeasurement loss on retirement plans - net of tax (6.79) (4.50) (4.14)
Net unrealized loss on AFS financial assets - net of tax - (0.05) (0.06)
Net unrealized loss on financial assets at FVOCI - net of
tax (0.03) - -
Retained earnings 15.49 17.38 22.26
Treasury stocks (0.19) (0.19) (0.18)
Underlying shares of the acquired Philippine Deposit
Receipts (0.04) (0.04) (0.04)
Total equity attributable to equity holders of the Parent
Company 62.29 63.56 64.81
Non-controlling interests 0.41 0.32 0.30
Total Equity 62.70 63.88 65.11
TOTAL LIABILITIES AND EQUITY 100 100 100

GMA NETWORK, INC. AND SUBSIDIARIES

COMPARATIVE INCOME STATEMENT - Common-Size Percentages
Years Ended December 31

PERCENTAGE (%)
2018 2017 2016
REVENUES 100 100 100
PRODUCTION COST 42.55 42.83 39.17
GROSS PROFIT 57.45 57.17 60.83
GENERAL AND ADMINISTRATIVE EXPENSES 36.19 34.51 30.88
OTHER INCOME (EXPENSE) – NET
Interest Expense 0.24 0.15 0.10
Interest Income 0.17 0.15 0.14
Net foreign currency exchange gain 0.13 0.01 0.12
Equity in net earnings of joint ventures 0.04 0.002 0.02
Others – net 0.52 0.76 0.59
0.62 0.78 0.78
INCOME BEFORE INCOME TAX 21.87 23.45 30.72
PROVISION FOR (BENEFIT FROM) INCOME TAX
Current 6.94 7.02 8.91
Deferred -0.32 0.02 0.30

NET INCOME 15.25 16.41 21.51

EVALUATION OF THE FINANCIAL POSITION
It is shown in the financial position that the current assets of the company is gradually
decreasing. From 64.66 on the year 2016 it declined to 60.92 and 57.23 for the year 2017 and
2018 respectively. This sudden decrease was accompanied by an increase of their total liability.
These changes have a negative impact on the company’s financial position. Because it can be
deemed that the assets of the company are at risk and can be used on in paying the liability of
the company.
It can be noticed that the current assets of the company are higher than its non-current assets,
in which is beneficial for the company because it has cash and assets that are convertible into
cash that can be used in paying for the liabilities and necessities of the company.

EVALUATION OF PROFITABILITY
GMA’s income statement indicates that there is an increased of production cost from 2016 to
2018. This rapid increase of production cost had a negative effect on its gross profit. Year 2016
had a production cost of 39.17% which is lower compared to 42.83% and 42.55% from years
2018 and 2017 respectively. It is because if the production cost of a company will increase, its
gross profit will decrease. It is also shown that the income before income tax of the company is
gradually declining. Hence, it is a clear manifestation that the income of the company is
decreasing.

GMA NETWORK, INC. AND SUBSIDIARIES

FINANCIAL RATIOS
Years ended December 31
LIQUIDITY RATIOS
2018 2017 2016
Current Ratio 2.72 2.66 2.83
2.52 2.46 2.60
Quick Ratio or Acid Test Ratio
1.02 1.01 1.16
Cash Ratio

Cash Flow Ratio 0.98 0.91 1.12

2.00 1.92 2.28
Cash Flow Liquidity Ratio
0.36 0.38 0.42
Net Working Capital Ratio

LEVERAGE RATIOS
1.59 1.57 1.54
Financial Leverage Ratio

Degree of Financial Leverage (DFL) 1.01 1.01 1

Degree of Operating Leverage 4 3.75

CAPITAL STRUCTURE AND SOLVENCY

Debt to Equity Ratio 0.59 0.57 0.54

0.26 0.21 0.18

Long-Term Debt to Equity Ratio

Debt to Total Assets Ratio 0.37 0.36 0.35

EARNINGS COVERAGE

Interest Coverage (Times Interest Earned) 92.91 159.97 309.06

Ratio

ACTIVITY RATIOS

3.14 3.07
Accounts Receivable Turnover Ratio

Days Sales in Receivables 116 days 120 days

Total Asset Turnover Ratio 1.01 0.99

PROFITABLITTY RATIOS
Gross Profit Margin Percentage 57.45% 57.17% 61.83%

Operating Profit Margin Percentage 21.25% 22.66% 21.87%

Net Profit Margin Percentage 15.25% 16.41% 21.51%

EBITDA Margin Percentage 22.11% 23.59% 30.82%

Return on Assets (ROA) 15.45% 16.59%

Return on Equity (ROE) 24.23% 25.72%

MARKET RATIOS

Diluted Earnings Per Share 0.474 0.52 0.75

CASH FLOW RATIOS

Cash Flow Ratio 0.98 0.91 1.12

Cash Flow Margin 20.71% 20.02% 24.68%
Asset Efficiency 0.21 0.20
Cash Flow Yield 1.36 1.20 1.13

LIQUIDITY
The company has good quality of liquidity position. Its current ratio exceeded the standard
of 2, thus, it is clear that the company is using too much of its assets that has a great impact to it
its capital. But it is also beneficial for the company because they were able to pay their
obligations within a short period of time. It is better that the standard was exceeded than not
meeting it at all.
LEVERAGE
The company exceeded the ideal standard of the leverage ratio which is 0.5:1. It is clear
that the company is too dependent in having some debt in order for their company to operate.
They are using debt to finance their assets. These debts are one of the reason why the assets
of the company is decreasing.
CAPITAL STRUCTURE AND SOLVENCY
The company failed to meet the ideal standard of the debt to equity ratio, but it is an
indication that the company do not depend primarily on the creditor’s investments. But this low
equity debt ratio is a manifestation that the company cannot provide some benefits for its
creditors. The company has a good performance when it comes to their long term debt. They
have a good long-term debt equity ratio, in which is lower to the standard ratio of 0.5. This
indicates that the company can compensate their liabilities and obligations without using too
much capital of the stockholders.
PROFITABILITY
The company has a greater Return on Equity than the Return on Assets, which is a good
because the company is prioritizing their shareholders. Because the investment of the
shareholders is not the primary source in paying the obligations of the company. Revenue partly
decreased in 2017 and again decreased in 2018. The Gross profit margin percentage has been
dropped in 2017 to 57.17% compared to 2016 which was 60.83%. The company also has a fair
gross profit margin, although it can be noticed that it is declining, it is probably because of the
decreased in sales and it can still cover the expenses of the company.

CASH FLOW RATIO

The company’s health is at risk because their cash flow ratio is less than 1. For the past
three years, the cash flow ratio of GMA is gradually decreasing. The company has a low cash
flow margin. Hence, the company has a low level of profitability.

SUMMARY OF FINDINGS
With the data that we have acquired from the different financial tools and techniques, we
thoroughly compared the information of both companies. It has come to conclusion that; ABS-
CBN is performing well compared to GMA. ABS-CBN has enough currents assets to
compensate with the obligations that they have. While GMA’s current assets is gradually
decreasing throughout the three years. They are barely meeting the ideal standard of the
financial ratios, wherein, it is ABS-CBN’s strength. ABS-CBN has a good cash flow, in which is
very beneficial to the investors and potential investors. It is because they can settle their debts
and other obligations without the need of taking too much financial assistance from the capital of
the company. Aside from it, ABS-CBN has the ability to return the investments of their investors
with a high return of profit or gain. ABS-CBN has also done well with regards to the net profit
margin even though there is a decrease in their net profit, the company was still able to cover its
operating expenses and other expenditures. With the given data above, ABS-CBN shows a
good financial position and is far from a volatile state. Hence, we decided to invest to ABS-CBN
because of the consistency that we have observed