Anda di halaman 1dari 9

ST.

PAUL UNIVERSITY SURIGAO


Surigao City, Philippines

CHAPTER 5

SUMMARY, CONCLUSIONS, AND RECOMENDATIONS

This chapter present the summary, findings, conclusion and recommendation of the

study.

Summary

This study focused on the financial analysis of Nine O’ One Paint Center& Enterprises in

Surigao City.

The business profile of Nine O’ One Paint Center& Enterprises included the beginning

capital, number of employees and number of years in operation. The financial ratios were

liquidity ratios consists of the current ratio, quick ratio, net working capital and inventory

turnover. Profitability ratio is gross profit margin and net profit margin. The solvency ratios are

the debt to asset ratio, debt to equity ratio and assets turnover.

The study used the descriptive design using documentary analysis in the form of their

Financial statements which were the financial position, income statement and statement of cash

flow of 2014, 2015 and 2016. The data were analysed and interpreted using the financial

analysis of the financial ratios.

Findings

The findings of the study were summarized as follows:

1. In the business profile of Nine O’One Paint Center& Enterprises in Surigao City. The

beginning capital was P1,200,000 and had 5 employees and had been operating for 3 years.
ST. PAUL UNIVERSITY SURIGAO
Surigao City, Philippines

28

2. As to liquidity ratios, current ratio from year 2014 got 6.89:1, 2015 got 8.43:1 and 2016 got

the results of 2.14:1. 1.2 to 2 above indicated of capable to pay its obligation. As to quick

ratio, the results in year 2014, got 3.76:1, 2015 got 3.03:1 and in the year 2016 the results

was .09:1. In the Years 2014 and 2015, the results were 1 and above and it indicated that they

can pay back its current liability. As to networking capital, the result in the year of 2015 was

better when compared to 2014 and 2016. But both ratios were positive which showed as able

to pay of each short term liability. As to the inventory turnover, from year 2014 to 2015 this

one was the highest as it indicated as greater sales efficiency and lower risk of loss that

results of 5.55 from 4.24 in the previous years of 2015 and 2016 with a result of 0.92.

3. As to profitability ratios, the gross profit margin from the year 2014 was 24.99%, and from

the of year 2015 the results was 21.81%. In 2016, it had 42.16%. Year 2016 showed the

better result. Both years indicated that the company can make a reasonable profit. As to the

net profit ratio, year 2014 got the highest which had a result of 14.21%, and was followed by

11.43% in the year 2016. However, in the year 2015, it got a lowest ratio. It had the result of

4.52% which indicated the least organized and efficient. The highest indicated as a high

margin of safety and lower risk that a decline in sales would result in net loss.

4. As to Solvency ratios, debt to asset ratio was from year 2014 to 2016. Year 2016 got the

highest as it indicated less than 1, and it showed that a considerate proportion of assets were

being funded with those results of 21.13% from 11.56% in the year 2014, and 9.83% in the

year 2015. As to debt to equity ratio from year 2014 to 2016, the result was a lesser ratio as it

indicated that if less than 0.5 most of the company asset was financed through equity. As to
ST. PAUL UNIVERSITY SURIGAO
Surigao City, Philippines

29

the asset turnover, in the year 2015 it had a results of 2.43 times and its indicated that more

sales in the business was produced based on its sales in 2016 as it resulted with 0.61 times

which indicated less sales in producing based on its assets.

Conclusions

Based on the findings of the study, the following conclusions were drawn:

1. Nine O’ One Paint Center& Enterprises had a beginning of P 1,200,000 with 5 employees

and is operating for 3 years.

2. As to Liquidity Ratios:

 Current ratio. Both years had the highest current ratio which indicated that they can easily

pay back its financial obligation on or before its due and they had also remaining assets after

paying their debts that can be used for the daily operations.

 Quick Ratio. Year 2014 got the highest quick ratio in which it can pay its debts using its near

cash assets which was the cash and account receivable and after paying that they had excess

from it that can be used for the operations of their business. And also, in the year 2015, it had

the high quick ratio while in the year 2016, it had the low ratio.

 Net Working Capital. Both years had a higher ratio but in the year 2015 it had the highest

working capital which indicated that there was less financial strain that they experienced

because of the enough capital and resources for expansion. They were able to pay its short

term debts and its capacity to finance their day-to-day operation.


ST. PAUL UNIVERSITY SURIGAO
Surigao City, Philippines

30

 Inventory turnover. In the year 2014, it had the highest inventory turnover which means a

greater sales efficiency and lower risk of loss.

3. As to Profitability Ratios:

 Gross Profit Margin. Year 2016 showed the increase of their profit margin this indicated that

the business can make a reasonable profit.

 Net Profit Margin. Year 2014 has got the highest ratio that indicated its safety in next years

of operations and there was a lower the risk that decline in sales which would result to net

loss.

4. As to Solvency Ratio:

 Debt to Asset Ratio. Both years had the lowest ratio which resulted to a lower debt to total

asset ratio and was considered better for of financial stability of the company. If the value of

total asset ratio is low, it suggests that the company has borrowed fewer funds as compared

to total asset that it owns.

 Debt to Equity Ratio. Both years had the lowest ratio which means the company’s assets

were financed through equity or the owner of the business.

 Asset Turnover. Year 2015 had the highest asset turnover which indicated effective enough

in utilizing their assets because it can generate sales. And it was able to compensate the costs

incurred in acquiring their assets as well evaluate the future performance of the same asset.
ST. PAUL UNIVERSITY SURIGAO
Surigao City, Philippines

31

Recommendations

In the view of the findings and conclusions of the study, the following recommendations

were made:

1. The owner of the Nino O' One Paint Center& Enterprises should use the findings of the study

to serve as the basis for decision making to operate well and to maximize the wealth of the

business.

2. The findings of this study would serve as basis for creating marketing strategies on how to

cope with the situation such as managing its inventories, increase current assets or reduce

current liabilities and its equity to continue its business and generate more assets and sales.

3. To find alternative investment to avoid idle cash in the long-run.

4. The proposed financial account improvement may be implemented.


ST. PAUL UNIVERSITY SURIGAO
Surigao City, Philippines

32

REFERENCES
Avenir, R. (2017). What are Activity Ratios.Retrieved from:
http://smallbusiness.chron.com/activity-ratios-57298.html

Averkamp,H. 2017) Accounting Coach.Retrieve from:


https://www.accountingcoach.com/blog/what-is-the-income-statement

Awan,M. (2012) . Synopsis of Financial Analysis.Retrieved from:


http://mbatop.blogspot.com/2012/10/synopsis-of-financial-analysis.html

Ballada, W. et.al., (2013) Partnership and Corporation Accounting.Manila, Philippines:


Made Easy Books

Borad, S. (2017).Debt to Total Asset Ratio.Retrieved from:


https://efinancemanagement.com/financial-analysis/debt-to-total-asset-ratio

Cabrera, E.. (2015). Financial Management ( Vol.1). Manila, Philippines:


GIC Enterprise &Co.,INC.

Conrad, S (2017). Profitability Ratio. Retrieved from:


http://www.myaccountingcourse.com/financial-ratios/profitability-ratios

Murray, G (2017). Asset Turnover Ratio Retrieved from:


http://www.investinganswers.com/financial-dictionary/ratio-analysis/asset-turnover-
ratio-2339

Murray, G (2017). Debt to Equity Ratio.Retrieved from:


http://www.investinganswers.com/financial-dictionary/ratio-analysis/debt-equity-ratio-
358

Hughes, K. (2015). 10 Advantages to Painting Your Industrial Equip. Retrieved from:


https://www.performance-painting.com/blog/10-advantages-to-painting-your-industrial-
equipment

Fortes, H. (2017).Debt-to-Equity Ratio.Retrieved from: http://accounting-


simplified.com/financial/ratio-analysis/debt-to-equity.html

Keythman,B. (2017). How to Calculate and Interpret a Company's Net Working Capital.
Retrived from:http://smallbusiness.chron.com/calculate-interpret-companys-net-working-
capital-16051.html
ST. PAUL UNIVERSITY SURIGAO
Surigao City, Philippines

33

Kokemuller, N (2017). What Does It Mean When Your Quick Ratio Is Below Industry?
Retrived from: http://smallbusiness.chron.com/mean-quick-ratio-below-industry-
20412.html

Laman, R. et. Al (2015) Financial System Market & Management. Manila, Phillipines:
GIC Enterprise & Co. Inc.

Lan,J. (2013). 16 Financial Ratios for Analyzing a Company’s Strengths and Weaknesses.
Retrieved from: http://www.aaii.com/journal/article/16-financial-ratios-for-analyzing-a-
companys-strengths-and-weaknesses.touch

Morgan, R. (2017).What Is the Average Gross Profit Margin for a Small Retail Business?
Retrieved from: http://smallbusiness.chron.com/average-gross-profit-margin-small-retail-
business-22607.html

Needles, B. et. Al.(2014). Financial & Managerial Accounting. International Edition:


South-Western CENGAGE Learning

Obaidullah,J. (2013). Financial Ratio Analysis.Retrieved from:


http://accountingexplained.com/financial/ratios/

Peavler, R. (2016). How Do you Do Financial SatementAnalysis. Retrieved from:


https://www.thebalance.com/how-do-you-do-financial-statement-analysis-393235

Sadownik et.al.(2013).Financial Ratio Analysis. Retrieved from:


https://www.demonstratingvalue.org/resources/financial-ratio-analysis

Salvador, S. et. al. (2012).Financial Management and Financial Analysis.


Sta. Maria,Philippines: Allen Adrian Books Inc.

Suralta, B(2017). The Current Ratio: Formula, What It Is, & How to Calculate It.
Retrieved from. https://fitsmallbusiness.com/what-is-current-ratio-formula/

Wilkinson,J (2013). Inventory Turnover Ratio Analysis. Retrieved from:


https://strategiccfo.com/inventory-turnover-ratio-analysis/

Wilkinson,J (2013) Net Profit Margin Ratio. Retrieved from:


https://strategiccfo.com/net-profit-margin-ratio/2076

Valix, C. et.al.,(2016) Financial Accounting (Vol.3). Manila, Philippines :


GIC Enterprises &Co.,INC.
ST. PAUL UNIVERSITY SURIGAO
Surigao City, Philippines

35

APPENDIX B
LETTER ASKING PERMISSION TO CONDUCT THE STUDY
ST. PAUL UNIVERSITY SURIGAO
Surigao City

To whom it may concern:

Pauline peace to you!


The undersigned are currently writing their undergraduate thesis entitled: “FINANCIAL
ANALYSIS OF NINE O’ ONE PAINT CENTER & ENTERPRISES IN SURIGAO CITY,” in
partial fulfillment of the requirement to the degree of Bachelor of Science in Accounting
Technology.
In connection to this, we respectfully ask your kind approval from your goal office to allow as
gathering information from the participant.
We would gladly appreciate your kind approval to this request.
Thank you and God bless!

Respectfully yours,
ROSELYN T. DORON
ALJHUNDE L. JUANITE
LOWELLA B. LAOSINGUAN
Researchers

Noted:
DR. ERLITA C. GUERRA DR. RAMIL A. RAVANES
Adviser Professor
ST. PAUL UNIVERSITY SURIGAO
Surigao City, Philippines

36

APPENDIX C
LETTER OF THE PARTICIPANT
ST. PAUL UNIVERSITY SURIGAO
Surigao City

To whom it may concern:

Pauline peace!
The undersigned are currently writing their undergraduate thesis entitled: “FINANCIAL
ANALYSIS OF NINE O’ ONE PAINT CENTER & ENTERPRISES IN SURIGAO CITY, “in
partial fulfillment of the requirement to the degree of Bachelor of Science in Accounting
Technology.

In this regard, we would like to request your time to allow us to gather information from your
business.
Thank you and God bless!

Respectfully yours,

ROSELYN T. DORON
ALJHUNDE L. JUANITE
LOWELLA B. LAOSINGUAN
Researchers

Noted:
DR. ERLITA C. GUERRA DR. EFREN R. EMPOT
Adviser Dean, College of Business and Technology

Anda mungkin juga menyukai