HORIZONTAL ANALYSIS:

INCOME STATEMENT

Based on the calculations, from 2019 to 2020, Jollibee had a -26.84% decrease in gross sales.
According to the corporation’s notes found on the bottom pages of its financial statements, the
pandemic forced the business to adjust and limit its operations. As a result, the gross sales went
down and the business experienced a decline in growth. Conversely, from 2020 to 2021,
Jollibee’s gross sales increased by 17.59%. Therefore, this indicates that in 2021, Jollibee foods
corporation experienced growth in its sales which can be attributed to the fact that the
restrictions imposed by the pandemic were much tamer and gave the business the freedom to
continue its usual business operations. Regarding the company’s cost of goods sold, it can be
seen that from 2019 to 2020 the cost of the goods sold decreased by -22.98%. This suggests
that Jollibee during the year 2020 has found a way to become efficient in its production
processes and reduce the costs of its inputs. However, from 2020 to 2021, the corporation’s
cost of goods sold increased to 10.17%. This increase in percentage suggests that in 2021,
Jollibee was spending more money on producing the goods it sells. Next is the gross profit of
the corporation, as presented in the table, Jollibee’s gross profit from 2019 to 2020 decreased
by -53.74%. This suggests that the company faced profitability challenges in 2020. As
previously mentioned, the impact of the pandemic played a role in the decline of the company's
gross profit. However, from 2020 to 2021, Jollibee Foods corporation’s gross profit increased by
91.94%, suggesting that the corporation has increased its profitability and made some
improvements in 2021. Moreover, From 2019 to 2020 Jollibee’s expenses increased by 15.33%,
indicating that the corporation is spending more expenses in 2020 than in the previous year.
Meanwhile, from 2020 to 2021, the corporation’s expenses went down by -24.98%. This means
that the expenses in 2021 are lower than the expenses incurred in 2020. In relation to the
company’s net income, both 2020 and 2021 experienced a net loss. From 2019 to 2020, the net
income decreased by -268.21%. As presented by the table, it is evident that in the year 2020,
Jollibee incurred a net loss as opposed to 2019 when the company achieved a net income.
Additionally, from 2020 to 2021, the net loss was around -143.55%.

BALANCE SHEET

As seen from the calculations, Jollibee’s cash and cash equivalents from 2019 to 2020 only
increased by 2.25%. Meanwhile, from 2020 to 2021 it increased by 15.59%. In regard to the
total assets, there was an increase of 12.47% from 2019 to 2020. From 2020 to 2021, the
increase in total assets is very little as there was only an increase of 0.01%. Furthermore, from
2019 to 2020, the corporation's total liability increased by 6.49%, and from 2020 to 2021 it
decreased by -4.29%. This implies that in 2020, Jollibee has employed a lot of financing
activities compared to 2021. Moving on, Jollibee’s total equity from 2019 to 2020 increased by
27.47%. Thus, this means that there was a significant increase in owner’s equity in the year
2020 compared to the previous year. From 2020 to 2021, the total equity increased by 9.04%.
This implies that in 2021, the amount of equity is greater than the amount in 2020.

VERTICAL ANALYSIS

INCOME STATEMENT

In the vertical analysis of the income statement, it is evident that in the year 2019, the gross
sales is significantly greater compared to the two succeeding years. Moreover, compared to
2020 wherein the cost of goods sold is 92.90% of the gross sales, the cost of goods sold in
2019 is only 88.24% of the gross sales. As a result, the gross profit in 2019, which has a
percentage of 17.25% of the gross sales, is higher than the gross profit in 2020 which is only
10.91% of the gross sales. Among the three years, 2021 has the highest percentage of gross
profit, representing 17.80% of the gross sales. This is attributed to the fact that 2020 has the
lowest percentage of the cost of goods sold among the three years, its percentage is only
87.03% of the gross sales. Lastly, from 2019 to 2020 there is a decrease in the net income
because from 4.41% of gross sales in 2019 it became 3.75% of gross sales in 2021.
BALANCE SHEET

The vertical analysis of the balance sheet shows that in the year 2019, total current assets
represent 24.34% of the total assets, while total fixed assets represent 75.66% of the total
assets. This indicates that Jollibee Foods corporation has invested more in fixed assets. In
2020, the total current assets were 37.97% of the total asset, and its fixed asset is 62.03% of
the total assets. Similarly to 2019, the corporation invested a lot in its fixed asset in the year
2020. In 2021, the percentage of the current asset is 31.01% of the total assets, while the
percentage of the fixed asset is 68.99% of the total asset. Thus, we can assume that Jollibee
throughout the three-year period, Jollibee foods corporation has been constantly investing more
in fixed assets. To broadly sum up the three years 2020 has the highest percentage and amount
of total assets, while 2019 has the highest total of fixed assets. In terms of liabilities, we can see
that there is a decrease in total current liabilities from 2019 to 2021, with 2021 having the lowest
total current liabilities: 45,846,091 or 21.74% of the total liabilities and equity. In addition,
Jollibee in the year 2021 increased its total noncurrent liabilities compared to the previous two
years, with an amount of 90,807,981 or 43.07% of the total liabilities and equity. Lastly, the total
equity in 2021 is 35.19% of the total liabilities and equity, while 2020 and 2019 respectively have
32.27% and 28.47%. This suggests that the total equity in 2021 is higher compared to the two
previous years.

LIQUIDITY RATIO

Current Ratio

Based on the data, in 2021, Jollibee corporation had a current ratio of 1.43 which suggests that
the corporation has P1.43 of current assets available to pay off each P1 of the current liabilities.
In 2020, the corporation had a current ratio of 1.36. Although it is considered an acceptable
current ratio, it is still lower than the current ratio in 2021. In contrast to 2021 and 2020, wherein
the company has more than P1 of current assets to pay off its current liabilities, the year 2019
has less than P1 of current assets available to pay off each P1 of current liabilities because its
current ratio is only 0.68. Hence, this indicates that in the year 2019, Jollibee had struggles in
meeting its short-term obligations.

Quick Ratio

In 2021, Jollibee foods corporation had a quick ratio of 1.22, indicating that the corporation had
P1.22 of quick assets available to pay off P1 of current liabilities. Similarly, the corporation also
had a quick ratio of 1.22, thus it has the same implications in 2021. The constant ratio between
the two years indicates that the company was able to maintain its liquidity position and was able
to keep up its ability to pay down its short-term obligations. However, in 2019, Jollibee
corporation had a quick ratio of 0.53, implying that it had less than P1 of quick assets available
to pay off each P1 of current liabilities. Therefore, during this year, the corporation had
difficulties in paying off its short-term debts.

Net operating working capital

In 2021, the company had a NOWC of P32,280,695. In contrast to 2021, the NOWC in 2020 is
lesser, which implies that Jollibee during this period had a lower level of liquidity to support its
ongoing operations. In 2020, the corporation had a NOWC of P48,186,775. Thus, this increase
in NOWC indicates that Jollibee had improved its operating liquidy and is able to support its
ongoing operations. In 2019, the corporation had a NOWC of 10,909,931, suggesting that the
company had low a low level of operating liquidity to support its ongoing operations.
SOLVENCY RATIO

Debt-to-equity Ratio

In 2021, Jollibee corporation had a D/E ratio of 1.84. Compared to the D/E ratio in 2020 and
2019, the D/E ratio in 2021 is significantly lower, indicating that the corporation has a lower level
of debt relative to its equity. In 2020, the corporation had a D/E ratio of 1.2. In contrast to the
D/E ratio in the year 2019, the D/E ratio in 2020 is lower. Thus this means that during this
period, the company managed to reduce its level of debt relative to its equity. In 2019, Jollibee
had a D/E ratio of 2.51, suggesting that the corporation has a high level of debt relative to its
equity. Therefore, most investors would find it hard to invest due to the higher level of financial
risk that comes along with it.

Total-Debt-to-total-asset Ratio

Based on the data provided, in 2021, the corporation has a TD/TA ratio of 0.65. Compared to
2020, the decrease in the TD/TA ratio to 0.65 indicates that Jollibee during this period was less
reliant on debt to finance its operations. In 2020, the TD/TA ratio of the corporation was 0.68,
which was higher than in 2021 but less than the TD/TA ratio of 0.72 in 2019. Therefore, this
indicates that during the year 2019, Jollibee corporation relied heavily on debt to finance its
operations.

PROFITABILITY RATIO

Profit Margin

In 2021, the profit margin has increased to 3.76% compared to the profit margin in 2020. Thus,
this increase indicates a positive sign that the company is improving its profitability. In relation,
the profit margin in 2020 was -10.14%, which implies that the company had more expenses
than revenue, hence the net loss. In 2019, the profit margin was 4.41%, indicating the Jollibee
corporation earns a profit of 4.41 cents for every peso of sales.

Return on asset

Based on the data provided, in 2021, Jollibee corporation’s ROA was 2.61%, which is higher
than in the year 2020. Thus, this increase in ROA indicates that the company is utilizing its
assets more efficiently to generate profit. In 2020, the corporation’s ROA was -5.99%, implying
that the company had a net loss and was not using its resources efficiently to generate profit.
On the other hand, the ROA in 2019 was 4.01%, which indicates that the company was using its
assets more efficiently and effectively to gain profit as opposed to the situation in the
succeeding year.

Return on equity

In 2021, Jollibee corporation’s ROE was 7.42%, indicating that the corporation is generating
profit per peso of shareholder equity. However, in 2020, the ROE was -18.57, implying that the
company incurred a net loss and did not efficiently utilize the equity invested by shareholders to
generate profit. On the other hand, the ROE in 2019 was 14.07%, which is a high value
compared to the two succeeding years. Therefore, this indicates that Jollibee generated a profit
of 14.07 cents for every peso of shareholder equity, and compared to the succeeding year the
company has efficiently utilized its equity.

EFFICIENCY RATIO

Inventory Turnover

Based on the data, the inventory turnover ratio of Jollibee has increased from 12.67 in 2020 to
14.45 in 2021. This indicates that the corporation during this period was able to manage its
inventory effectively and efficiently as it was able to sell and replace its inventory more often
compared to 2020.

Fixed Asset Turnover

In 2020, the fixed asset turnover was 0.91, which means that for every peso invested in fixed
assets, a return of P0.91 is earned. However, in 2021, the fixed asset turnover increased to
1.06, which means that for every peso invested in fixed assets, a return of P1.06 is earned.

Total Asset Turnover

Based on the data provided, in 2021, Jollibee corporation’s total asset turnover ratio was 0.2.
Meanwhile, in 2020, the corporation’s total asset turnover was 1.98. This suggests that in 2020,
the corporation is generating more revenue for every peso of its assets compared to 2021.

Dupont Equation

From the data, Jollibee’s Dupont ratio was 0.074124 in 2021, -0.18569 in 2020, and 0.140751 in
2019. It can be seen that in 2020 the Dupont ratio dropped to -0.18569, indicating that the company is not
generating a return on equity. However, in 2021 the Dupont ratio improved as it rose to 0.074124,
implying that the corporation is generating a return on equity.