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Horizontal Analysis Interpretation PDF

The document contains financial information about three companies - Limketkai Sons Inc., Cenmin, and Cesco. For Limketkai Sons Inc., revenues decreased due to lower rent and service fees, but other revenues increased. Depreciation expenses increased due to new plant and equipment acquisitions. Income tax provisions decreased, increasing net income. For Cenmin, revenues decreased as assets were not fully utilized. Depreciation expenses increased due to changes in estimated equipment lives. Interest expenses increased due to higher loan amounts. Comprehensive income decreased largely. For Cesco, revenues increased due to higher service revenues, while goods sales slightly decreased. Costs of goods sold and services increased due to higher purchases, labor, and

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263 views

Horizontal Analysis Interpretation PDF

The document contains financial information about three companies - Limketkai Sons Inc., Cenmin, and Cesco. For Limketkai Sons Inc., revenues decreased due to lower rent and service fees, but other revenues increased. Depreciation expenses increased due to new plant and equipment acquisitions. Income tax provisions decreased, increasing net income. For Cenmin, revenues decreased as assets were not fully utilized. Depreciation expenses increased due to changes in estimated equipment lives. Interest expenses increased due to higher loan amounts. Comprehensive income decreased largely. For Cesco, revenues increased due to higher service revenues, while goods sales slightly decreased. Costs of goods sold and services increased due to higher purchases, labor, and

Uploaded by

Alison Jc
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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LIMKETKAI SONS INC.

*The increase of depreciation of 17,730,779 or 10.89% is because the


company acquired new plant and equipment and because of the building and
improvement under the investment properties which results into higher
charges to operation, depreciation expense charged to operations amounted
to 155.5 million and 136.5 million in 2011 and 2010, respectively

*The decrease of revenue by 854,564 was a result of the decrease by both


rent and tenant reimbursement and service fees by 3,021,094 and 6,655,602
respectively, however other revenue managed to increase its sales. Rent
revenue covered a large percentage of the acquisition of sales by the
company thus this creates a big impact

*There is a decrease in the provision for income tax of 7.25% from 2010 to
2011 and it is because of the decrease of the deferred tax liabilities and this
helped the company to reduce its deductions in the earnings before tax
leading to higher net income.

CENMIN

*The revenue decreased by 3.34% or an amount of 3,285,853. This indicates


that CENMIN don’t really maximize their assets to generate higher sales as
shown in their decrease of TATO. The current revenue is almost the same as
its cost and expenses thus these lowers or worst, negatively affect the net
profit of CENMIN such as the personnel expenses due to recruitment of new
employees thus require additional cost for their salaries and wages, bonuses,
and pension costs.

*There is an increase of depreciation & amortization by 42% or an amount of


2,447,174 from 2008 to 2009 because the company revised the estimated
useful lives of certain office, store and food processing equipment, and
furniture and fixture from 5 years to 3 years thus this change increased the
company’s net loss in 2009 by 0.7 million.

*Under other charges & other income, there is an increase of interest


expense of 11.58% mainly because the company acquires loan and since
CENMIN is risky, the interest rate is also high given by bank in a percent of
7.25% per annum which leads to an increase of interest expense during the
current year. In addition, the interest income declines by 69.01% because
there is a decrease in cash in bank from 2008 to 2009 by 5,156,572.

*CENMIN total comprehensive income largely decreased by 2008 to 2009 by


342,310 or 50.66% because their cost and expenses is almost equal which
gives the company a disadvantage to acquire profit and this means that they
do not really generate sales from their own assets thus this would greatly
affect the decisions of the investors and has a higher possibility that
investors would not invest in CENMIN

CESCO

*There is an increase of revenue by 2.25% or 14,785,901 from 2013 to 2014


because of the big elevation of the rendering of services by 14,937,570. The
services rendered were mostly to CEPALCO. The sale of goods has relatively
small percentage that decreased from 2013 to 2014, just by 0.03% or an
amount of 156,669 because there are already excess electrical materials and
equipment by CEPALCO and other customers.

*The increase of cost of goods sold from 374,572,665 to 388,774,212 or by


3.65% from 2013 to 2014 is because of the additional cost for additional
purchases and the cost for freight in which the company have higher
inventories, however, this also caused to a higher rent expense from 2013 to
2014 in order to store these inventories and utilities expense to take good
care of these.

*The cost of services also increased by 6,506,809 or by 7.43% from 2013 to


2014 due to the acquisition of direct materials and direct labor. Result of
additional direct labor, the company incurred personnel expenses such as
salaries and wages, employee benefits, and pension costs that are why the
cost of services increases to the current year.

*The total comprehensive income of CESCO decreased from 66,923,091 to


63,712,840 in the year 2013 to 2014 respectively or by 5.04% or an
equivalent amount of 3,210,251. The decrease was because the company
incurred higher cost and expenses than its revenue and another things is
that the remaining inventories was not yet sold, which means there are still a
lot of inventories left.

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