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Current Ratio
Max’s Group’s current ratio indicates that its current liabilities are larger than
its current assets and that the company may have a hard time paying its
current obligations.
Quick Ratio
The company’s low quick ratio indicates that the company may have a hard
time paying its current obligations using its quick assets, or assets that can
easily be turned into cash.
SOLVENCY RATIOS
PROFITABILITY RATIOS
2015 2014
Rate of Return on Net 5% -1%
Sales
Gross Profit Rate 27% 21%
Profitability ratios are ratios used to assess the ability of the business to
generate profit.
STABILITY RATIOS
2015 2014
Debt/Equity Ratio 1.54 1.65
Stability ratios are ratios used to assess the company’s stability and ability to
meet its long-term financial obligations.
Debt/Equity Ratio
Max’s Group’s Debt/Euity ratios decreased from 1.65 in 2014 to 1.54 in 2015.
These ratios indicate that the company has been financing its growth with
debt. The decrease in the ratio means that the company had lowered its take
on their debts.
Equity Ratio
Max’s Group’s equity ratio has increased from 38% in 2014 to 39% in 2015.
This indicates that in 2015, 39% of the company’s assets are financed by the
owner’s equity. This is not a good ratio, because it means that only 39% of
the company’s assets actually belong to the owners of the company, which
they would receive in time of liquidation, and the rest are from debt.
Fixed Assets to Long-term Liabilities
Max’s Group’s fixed assets to long-term liabilities decreased insignificantly,
from 1.80 in 2014 to 1.79 in 2013. These ratios indicate that the company’s
long-term liabilities may be secured with its fixed assets, and that it has
enough fixed assets to be used as collateral for mortgage.
RECOMMENDATION
If possible, the company should reduce its expenses and strive for higher
sales, to be more profitable. They can also improve their strategic
management.
For high-risk investors and creditors, they can use this opportunity to invest
in and finance Max’s Group, in order for the company to create more strategic
plans that might guarantee them return.
As for low-risk investors and creditors, they could wait for the company to
recover from their indebtedness before they invest, since the company has
been improving in terms of their debt/equity and equity ratios, and their
overall profitability ratios.
MAX'S GROUP, INC.
Doing business under the names and styles of Pancake House;
Maple; Dencio's; Kabisera ng Dencio's; and Singkit
(FORMERLY MAX'S GROUP, INC.) AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(Amounts in Thousands)
2015 2014
ASSETS
Current Assets
Cash 817,921 956,522
Trade and other receivables 536,911 677,559
Inventories 484,724 364,286
Prepaid expenses and other current assets 357,365 363,473
Total Current Assets 2,196,921 2,361,840
Noncurrent Assets
Property and equipment 2,402,768 1,751,220
Intangible Assets 5,015,751 4,899,277
Investment properties 0 426,281
Net retirement plan assets 389,722 462,153
Net deferred income tax assets 189,740 196,605
Security deposits on lease contracts 374,534 320,567
Other noncurrent assets 320,486 289,119
Total Noncurrent Assets 8,693,001 8,345,222
10,889,922 10,707,062
2015 2014
ASSETS
Current Assets
Cash 7.23% 8.93%
Trade and other receivables 4.93% 6.33%
Inventories 4.45% 3.40%
Prepaid expenses and other current assets 3.28% 3.39%
Total Current Assets 20.17% 22.06%
Noncurrent Assets
Property and equipment 22.06% 16.36%
Intangible Assets 46.06% 45.76%
Investment properties - 3.98%
Net retirement plan assets 3.44% 4.32%
Net deferred income tax assets 1.68% 1.84%
Security deposits on lease contracts 3.31% 2.99%
Other noncurrent assets 2.83% 2.70%
Total Noncurrent Assets 80.59% 77.94%
TOTAL ASSETS 100.00% 100.00%
2015 2014
ASSETS
Current Assets
Cash 85.51% 100.00%
Trade and other receivables 79.24% 100.00%
Inventories 133.06% 100.00%
Prepaid expenses and other current assets 98.32% 100.00%
Total Current Assets 93.02% 100.00%
Noncurrent Assets
Property and equipment 137.21% 100.00%
Intangible Assets 102.38% 100.00%
Investment properties - 100.00%
Net retirement plan assets 84.33% 100.00%
Net deferred income tax assets 96.51% 100.00%
Security deposits on lease contracts 116.83% 100.00%
Other noncurrent assets 110.85% 100.00%
Total Noncurrent Assets 104.17% 100.00%
TOTAL ASSETS 101.71% 100.00%
MAX’S GROUP
Submitted by:
Bonifacio, Jan Myka B.
2BFM
Submitted to:
Prof. George Ong, CPA