Chapter 2

METHODS

Research Design
The researchers used comparative research in this study in order to distinguish the
difference between the three (3) companies of real estate sector. According to Hannah
Richardson, comparative research studies should be used when comparing two (or more) groups,
often cross-nationally. These studies analyze the similarities and differences between these
groups in an attempt to understand the groups.

Population and Sampling

The population of the study was covered by three (3) well-known companies of the real
estate sector in the Philippines namely Ayala Land Inc., Robinsons Land Corp., and Vista Land
& Lifescapes, Inc. The researchers gathered the financial statements of each company from year
2013 to 2017 to analyze their profitability, risk ratio and liquidity in order to know which among
these companies is the best choice for investment decisions. The companies were selected
through purposive sampling, specifically homogeneous sampling. Only those elements will be
selected from the population which best fits the purpose of our study.

Source of Data
The sources of data were financial statements of the selected publicly listed companies
under real estate sector, which are Ayala Land Inc., Robinsons Land Corp., and Vista Land &
Lifescapes, Inc., covering their operations for a 5-year period, 2013 to 2017. These companies
were registered under Securities of Exchange Commission (SEC).

Financial Ratios

 Current Ratio (CR= Current Asset/ Current Liabilities)

 Gross Profit Margin (GPM= Gross Profit/ Net Sales)

 Operating Profit Margin (OPM= Operating Profit / Net Sales)

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 Net Profit Margin (Profit Margin= Net Income/ Revenue)

 Total Asset Turnover (TATO= Revenue/ Total Assets)

 Return on Total Asset (ROA= Net Income/ Total Assets)

 Return on Common Equity (ROE= Net Income/ Capital)

 Debt to Asset Ratio (Debt Ratio= Total Debt/ Total Asset)

 Debt to equity (Leverage= Total Liability/ Total equity)

Data Gathering Procedure

The researchers downloaded financial statements for the year 2013 to 2017 of the
selected publicly listed companies under real estate sector in the Philippines namely Ayala Land
Inc., Robinsons Land Corp., and Vista Land & Lifescapes, Inc. The researchers executed
financial statement analysis, commonly the ratio analyses in order to obtain answers for the
research questions.
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Data Analysis
In analyzing the data, financial statements of the selected companies were gathered from
the year 2013 to 2017. These financial statements were collected from the official sites of the
companies. The researchers computed the different ratios such as profitability, liquidity and risk
ratio from the financial statements in order to analyze the status of every company. The researchers
compared the results by rating their performance based on their financial ratios and concluded
which of the selected companies was the ideal company that satisfied the terms of being the most
profitable, most solvent, and has the least risk among the three. The researchers also compared the
results based on the selected companies’ financial ratios to their corresponding stock prices in
order to know whether there is a relationship between the two.