Horizontal Analysis

Based on the tables presented, it was found out that there is a decrease of
1.61% as to Barksdale’s Income after Taxes compared to the previous year. In
contrary to this decrease, they incurred significant increase as to their gross profit
of 19.88% which can tell us that they grow. It was also found out that the decrease
of their net income is coming from the increase of their operation expenses.

As to their assets, liability and equity, there is also increase of 1.47%. There
current assets also increase as well as the non-current asset. As to the liabilities,
there is also somehow increase as to payables but it is manageable. As to their
equity, they have a decrease of 4.37% due to the retained earnings which was
found out that it dropped 28.88%.

The competitors of Barksdale Brewery Company are Shamrock Brewery,

Bubbles Brewery and Bey Brewery. As we go through Shamrock Brewery’s financial
statements and do horizontal analysis, we found out that they have an increase as
to assets, and total liabilities and equity of 4.76% but they incurred loss as to their
net income which is way high. It is therefore concluded that the company is not
doing good and must invest more and expand their marketing for them to boost
their revenues.

As to Bubbles Brewery, they incurred a big increase as to their assets and

total liabilities and equity. They also incurred net income of 6.92%. Through this, we
can say that the company is growing and can able to satisfy their liabilities.

The Bey Brewery also incurred a big increase of 19.93% as to their assets and
total liabilities and equity. They also had paid a big amount out of their long term
debts and able to increase their retained earnings. They also incurred a big amount
of net income which is 50.37%. It is also concluded that the company is growing and
they are doing good.

To sum up all, Barksdale Brewery Company has great competitors that why
they must need to improve and expand their company so that they will able to
compete with the competitors.
Vertical Analysis

Based on the tables presented, it was found out that the operating expenses
account is a large percentage of the revenue, thus decreasing the net income. Their
net income after taxes is only 6.60% out of their gross revenue. Still it is good in a
way that they incurred income even though the big factor which influence as to the
gross revenue is the other operating expenses.

As to Barksdale’s balance sheet, it is clearly seen that the total asset of the
company is coming from the non-current assets. Therefore, they invest more on
their equipment and machineries. As to their liabilities, most of it is composed out of
their current liabilities, so therefore it is expected that the company is liquid and
can able to pay their payables on time.

As to their competitors, Shamrock Brewery, it is seen that fixed asset is a

large component of their assets. Their liability also is composed mostly of the
current payables. They incurred loss at the end of the year which makes them
illiquid as to the satisfaction of their current payables.

In Bubbles Brewery, it is found out that a large component of their asset also
came from the non-current asset. They incur net income which is 11.27% of the
total revenue. So it is believed that they are liquid to satisfy their liabilities.

In Bey Brewery, it is also found out that large component of their asset also
came from the non-current asset. They incur net income which is 15.64% of the
total revenue. They are also liquid as to satisfaction of liabilities.

It is therefore concluded that Barksdale Brewery Company is performing well

and can able to compete in the market industry.
Trend Analysis

During the year 2011, it has lowest year of the total asset which is 49.89%.
From 2009 to 2013, the total asset of Barksdale Brewery is slowly increasing. The
Barksdale Brewery is a profitable business because if we compare the assets to the
liabilities, there are still more assets than liabilities. And it also had shown that
there is no notes payable and long term debt. Therefore I can conclude that they
are good at managing and choosing the wise decision for their business.
Ratios

As to Barksdale Brewery Company, they have a current ratio of 1.49 is to

1and their working capital to total asset is 15% and it means that they can solvent
and liquid to satisfy their short term liabilities. Their receivable turn-over is 24.28
times which is estimated to be collected 14.83 days. So it is presumed that their
receivables are deemed collectible throughout the year. Their inventory turnover
also is high, 7.95 times, which can supply 45.28 days. Their debt ratio is way high,
which is 37.93%, equity ratio of 62.07% which is good indicator for their stability.
Their gross profit margin is 55% and operating margin of 13.30% which is good
indicator to measure profitability and returns.

Shamrocks Brewery has a current ratio of 1.28 to 1 and their working capital
to total assets of 20.6%, means they are also solvent and liquid. Their receivable
turnover is 12.62 times and is estimated to be collected 28.53 days. It is believed
that their assets are liquid. Their debt ratio is 27.34% and their equity ratio is
72.66% which indicates stability as to long term financial position. They are also
profitable and able to give returns as to investors because their gross profit margin
is 24.01%.

Bubbles Brewery has a current ratio of 1.26 to 1 and their working capital to
total assets of 7%, means they are also insolvent and illiquid. Their receivable
turnover is 8.82 times and is estimated to be collected 40.82 days. It is believed
that their assets are liquid. Their debt ratio is 44.48% and their equity ratio is
55.52% which indicates stability as to long term financial position but still in doubt.
They are also profitable and able to give returns as to investors because their gross
profit margin is 34.26%.

As to Bey Brewery, they have a current ratio of 43.73 is to 1and their working
capital to total asset is 21.32% and it means that they can solvent and liquid to
satisfy their short term liabilities. Their receivable turn-over is 5.69 times which is
estimated to be collected 3.94 days. So it is presumed that their receivables are
deemed collectible throughout the year. Their debt ratio is way high, which is
41.68%, equity ratio of 58.32% which is good indicator for their stability. Their gross
profit margin is 43.73% and operating margin of 21.32% which is good indicator to
measure profitability and returns.
FORECASTING
Case Study