Assumptions

 The following revenues will increase by the 5-year average growth rate (2012-2016) for the first
forecasted year:
A. Advertising revenue…………………………10.14%
B. Sale of service………………………………….6.82%
C. Others……………………………………………..5.51%
Growth rates for succeeding forecasted years shall be based on a 5-year moving average.

 Sales of good revenue will increase by 13% for the next 3 forecasted years, which the increase
rate from the year 2015-2016. NOTE: A 5-year average growth rate was not used since from
2014-2015, there was a dramatic increase caused by the introduction of ABS-CBN TVPLUS, thus,
to provide clear forecasts, such data will not be used to eliminate excessive fluctuations. But,
growth rates for succeeding forecasted years shall be based on a 5-year moving average.

 All costs and expenses on the income statement shall be based on the percentage of total
revenue

 Provisions for income tax shall use a rate of 25%, as per stated in ABS-CBN annual report

 It is assumed that there is no other comprehensive income accounts that will affect the net
income in profit and loss statement.

 Non-controlling interest on income statement is based on the increase/decrease of the Non-

controlling interest equity on the statement of financial position.

 The company’s equity ratio is assumed to maintain a 0.414 (41.4%) for the first forecasted year
and such ratio is assumed to increase by 0.50%, which is the safest growth rate for such ratio.

 A constant rate of 17.88% dividend payout ratio, based on a 3-year average rate, shall be
maintained for the remainder of the forecasted years. Thus 17.88% of net income shall be
forecasted to be declared for the following years
 The statement of financial position at year-end is similar in percentage of sales to that of the 5-
year average of previous years (and this will continue in the future). The following accounts are
considered varying directly with sales:

A. Current Assets:
1. Cash and Cash Equivalents
2. Trade and Other receivables
3. Inventories
4. Program rights and other intangible assets
5. Other current assets
B. Noncurrent Assets
1. Property and Equipment
2. Program rights and other intangible assets
3. Deferred tax assets
4. Other noncurrent assets
C. Current Liabilities
1. Trade and other payable
2. Income tax payable
3. Obligations for program rights
D. Non-current Liabilities
1. Accrued pension obligation and other employee benefits
2. Deferred tax liabilities
3. Other noncurrent liabilities
 Retained earnings is computed as retained earnings beginning plus net income less dividends
declared