A Comparative Financial Analysis of Security Bank Corporation and BDO Corporation

For the Years 2016, 2017, 2018

A Paper

Presented to the

College Department

Philippine Cultural College

In partial fulfillment

Of the course requirements

In OMELEC/ MMELEC

SUBMITTED TO:

Professor Melanie Li

SUBMITTED BY:

Caitlin L. Chua
Paulyn S. Gripo

November 18, 2019

TABLE OF CONTENTS

I. INTRODUCTION

OVERVIEW OF THE INDUSTRY

II. SECURITY BANK CORPORATION

1. COMPANY PROFILE
1.1. Key facts
1.2. Financial Performance
1.3.Key Executives
1.4.Ownership and Major Stockholders
1.5. Company History

2. BUSINESS OVERVIEW
2.1. Business Description
2.2. Major Products and Services
2.3. Markets and Sales Activities
2.4. Locations, Subsidiaries, Operating Units

3. SWOT ANALYSIS
3.1. Overview
3.2. Strengths
3.3. Weaknesses
3.4. Opportunities
3.5. Threats

4. FINANCIAL STATEMENT ANALYSIS

4.1. Financial Statements – 3 years comparative
4.1.1. Income Statement
4.1.2. Balance Sheet
4.1.3. Cash Flow
 4.2 Common-size financial statements – 3 years comparative
Discussion
4.2.1 Discussion and analysis
4.2.2 Trend Analysis over 3 years, % changes

4.3 Financial Ratios*

4.3.1 Liquidity ratios
4.3.2 Capital Structure ratios
4.3.3 Asset management efficiency ratios
4.3.4 Profitability ratios
4.3.5 Market value ratios

* Show computations and graphs, discuss and analyze trends

4.4 Dupont Analysis (chart)

III. BDO CORPORATION

1. COMPANY PROFILE
1.1. Key facts
1.2. Financial Performance
1.3.Key Executives
1.4.Ownership and Major Stockholders
1.5. Company History

2. BUSINESS OVERVIEW
2.1. Business Description
2.2. Major Products and Services
2.3. Markets and Sales Activities
2.4. Locations, Subsidiaries, Operating Units

3. SWOT ANALYSIS
 3.1. Overview
3.2. Strengths
3.3. Weaknesses
3.4. Opportunities
3.5. Threats

4. FINANCIAL STATEMENT ANALYSIS

4.1. Financial Statements – 3 years comparative
4.1.1. Income Statement
4.1.2. Balance Sheet
4.1.3. Cash Flow

4.2 Common-size financial statements – 3 years comparative

Discussion
4.2.1 Discussion and analysis
4.2.2 Trend Analysis over 3 years, % changes

4.3 Financial Ratios*

4.3.1 Liquidity ratios
4.3.2 Capital Structure ratios
4.3.3 Asset management efficiency ratios
4.3.4 Profitability ratios
4.3.5 Market value ratios

* Show computations and graphs, discuss and analyze trends

4.4 Dupont Analysis (chart)

IV. COMPARATIVE FINANCIAL ANALYSIS OF ONE CORPORATION AND TWO

CORPORATION
1. Comparison and analysis of common size financial statements
2. Comparison and analysis of ratios
V. SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

VI. REFERENCES

VII. APPENDIX
Audited Financial Statements of the two corporations for 2016, 2017 and 2018
(excluding Notes to Financial Statements)
Tabulation of ratios for 2016, 2017 and 2018 for each corporation
I. INTRODUCTION

The Banking & Financial Services industry serves an important role in the global economy. By
facilitating the movement of money from people or organizations with surplus capital to people
or organizations wanting capital, financial intermediaries help power innovation and growth,
creating jobs, building infrastructure and funding new ideas. Individuals tend to borrow more
early in life (to pay for college and buy homes, for example) but invest more later in life (to build
wealth and save for retirement). Financial intermediaries offer a service to help an individuals or
firm to save or borrow money.

Company types: What do they do? Who do they do it for? And why do they do it

 Retail banks - provide transaction services and facilitate the lending of money to
individuals via credit cards, loans and mortgages. Commercial banks do the same for
companies.

 Corporate investment bankers – provide a range of financial services to companies,

institutions and governments. They manage corporate, strategic and financial
opportunities, including mergers, acquisitions, bonds and shares, lending, privatizations,
initial public offerings (IPOs). Corporate investment bankers also advise and lead
management buyouts, raise capital, provide strategic advice to clients, and identify and
secure new deals.

 Financial traders - buy and sell shares, bonds and assets for investors, including
individuals and banks. They make prices and execute trades, seeking to maximize assets
or minimize financial risk.

 Investment banks - a bank that purchases large holdings of newly issued shares and
resells them to investors.

Banks earn revenue on the difference between the rate of interest they pay to lenders and they
charge to borrowers. If you have $1000 in your current account you will likely earn close to 0.1%
in interest. If, however, you were to take out a $1000 loan you will likely be charged close to
10% in interest. The interest you pay is governed predominantly by your creditworthiness; the
likelihood attached to your ability to repay your loans.
III. BDO CORPORATION

1. COMPANY PROFILE

1.1. Key facts

BDO Unibank Inc. (BDO), originally known as Acme Savings Bank, was acquired by the SM Group
in 1976. BDO listed its shares on the Philippine Stock Exchange on May 21, 2002. The Company
merged with Equitable PCI Bank in May 2007.
1.2. Financial Performance

Fiscal year is January-December. All values PHP

Millions. 2018 2017 2016

Interest Income 129,670 100,346 82,477

Interest and Fees on Loans 115,384 88,178 73,171

Interest on Bank Deposits 1,733 1,742 696

Other Interest or Dividend Income 12,553 10,426 8,610

Interest Income Growth 29.22% 21.67% 13.63%

Total Interest Expense 5,153 3,123 2,790

Interest Expense on Bank Deposits 25,595 14,919 13,623

Other Interest Expense 5,153 3,123 2,790

Interest Expense on Debt 5,153 3,123 2,790

Total Interest Expense Growth 29.22% 21.67% 13.63%

Fiscal year is January-December. All values PHP
Millions. 2018 2017 2016

Net Interest Income 124,517 97,223 79,687

Net Interest Income Growth 29.22% 21.67% 13.63%

Loan Loss Provision 6,141 6,377 3,407

Loan Loss Provision Growth 29.22% 21.67% 13.63%

Net Interest Income after Provision 118,376 90,846 76,280

Net Interest Inc After Loan Loss Prov Growth 29.22% 21.67% 13.63%

Net Interest Margin 3.60% - -

Non-Interest Income 47,356 46,043 40,692

Securities Gain 244 - -

Trading Account Income (1,863) 450 1,860

Foreign Exchange Gains 3,789 3,412 2,978

Trust Income, Commissions & Fees 30,686 28,947 22,197

Trust Income 3,314 3,246 3,123

Fiscal year is January-December. All values PHP
Millions. 2018 2017 2016

Commission & Fee Income 27,372 25,701 19,074

Other Operating Income 14,500 13,234 13,657

Non-Interest Expense 133,520 105,563 88,809

Labor & Related Expense 30,449 27,405 24,698

Equipment Expense 5,745 8,410 7,659

Operating Provisions 25 - -

Taxes Other than Income Taxes 11,639 8,270 7,224

Depreciation & Amortization 5,227 4,611 4,330

Other Operating Expense 44,534 35,702 25,695

Operating Income 42,518 37,572 33,743

Operating Income Growth 29.22% 21.67% 13.63%

Operating Income Margin 24.02% - -

Non-Operating Income (Expense) 6,841 3,735 3,271

Miscellaneous Non Operating Expense 6,210 3,123 2,790

Fiscal year is January-December. All values PHP
Millions. 2018 2017 2016

Equity in Affiliates (Pretax) 631 612 481

Unusual Expense 560 627 1,181

Pretax Income 43,646 37,557 33,043

Pretax Income Growth 29.22% 21.67% 13.63%

Pretax Margin 24.66% - -

Income Taxes 11,007 9,452 6,797

Income Tax - Current – Domestic 11,013 9,416 6,764

Income Tax - Deferred – Domestic (6) 36 33

Equity in Affiliates - - -

Consolidated Net Income 32,639 28,105 26,246

Minority Interest Expense (69) 35 12

Net Income 32,708 28,070 26,234

Net Income Growth 29.22% 21.67% 13.63%

Fiscal year is January-December. All values PHP
Millions. 2018 2017 2016

Net Margin 18.48% - -

Net Income After Extraordinaries 0 0 0

Preferred Dividends 339 340 339

Net Income Available to Common 32,369 27,730 25,895

EPS (Basic) 7.40 6.42 6.51

EPS (Basic) Growth 29.22% 21.67% 13.63%

Basic Shares Outstanding 4,372 4,322 3,982

EPS (Diluted) 7.40 6.42 6.50

EPS (Diluted) Growth 29.22% 21.67% 13.63%

Diluted Shares Outstanding 4,372 4,322 3,982

1.3. Key Executives

Name/Title Current Board Membership

Teresita T. Sy-Coson, 67, Chairman BDO Unibank, Inc.

Nestor V. Tan, 59, President, Chief Executive
BDO Unibank, Inc.
Officer & Director

Josefina N. Tan, 83, Director BDO Unibank, Inc.

Jesus A. Jacinto, 70, Vice Chairman BDO Unibank, Inc.

Christopher A. Bell-Knight, 70, Non-Executive

BDO Unibank, Inc.
Director

Vicente S. Perez, 60, Independent Director BDO Unibank, Inc.

George T. Barcelon, Independent Director BDO Unibank, Inc.

Dioscoro-Roy I. Ramos, Independent Director BDO Unibank, Inc.

Jones M. Castro, 66, Independent Director BDO Unibank, Inc.

Techzone Philippines, Inc., Himap Properties

Corp., BDO Securities Corp., Capital Managers
& Advisors, Inc., Hicap Properties Corp., The
Country Club, Inc. /Philippines/, Consolidated
Coconut Corp., La Concha Land Investments

Jose F. Buenaventura, 81, Independent Corp., Apo Fruits Corp., Agrotex Commodities,

Director Inc., Peter Paul Philippine Corp., Ballet

Philippines, Cargill Seeds, Inc., San Dionisio
Realty Corp., Euroville Realty & Development
Corp., Lear Automotive Corp., Turner
Entertainment Manila, Inc., BDO Unibank,
Inc., PhilPlans First, Inc., Cebu Air, Inc., The
Fashion Place, Inc., Milano & Co., Inc.,
 Country Club Development Corp., Melco
Crown (Philippines) Resorts Corp., 2B3C
Foundation, Inc., Nouveau Manufacturing,
Inc., Global Resource for Outsourced
Workers, Inc., Philippines First Insurance Co.,
Inc., Philam Plans, Inc., Total Consolidated
Asset Management, Inc., Anric Holdings, Inc.,
Grow!, Inc., Sanitary Wares Manufacturing
Corp., Grow Holdings Philippines, Inc.

Philippine Geothermal Production Co., Inc.,

Gilberto C. Teodoro, Independent Director
Canlubang Sugar Estate, BDO Unibank, Inc.

1.4. Ownership and Major Stockholders

The ownership of Banco de Oro can be divided into two part, or rather two stages:

1. First stage- before merger of equals with the Equitable PCI bank

2. Second stage- after BDO’s merging with the Equitable PCI bank.

During the first stage the bank’s shares were separated between main bdo owners this way:

 Main shares (40.09%) among which 35.64% were foreign and 4.45% were Filipino
belonged to the PCD Nominee Corporation.

 Other shares (27.41%, 22.08%) belonged to the SM Investments Corporation and

Primebridge Holdings respectively.

After the merging situation has changed and bank’s ownership separated its shares following
way:

 Main shares (40.87%) belong to the SM Investments Corporation.

  Other shares (8.81%, 5.14%, 2.10%) belong to the Multi-Realty Development
Corporation, Sybase Equity Investments Corporation and Shoemart respectively.

BDO’s major shareholders are the SM Group and IFC (International Finance Corporation)/ IFC
Capitalization Fund.

1.5. Company History

Today BDO’s head office is located in Makati, Philippines and the bank is considered as the largest
and the most popular bank in Philippines. On the official site of BDO it is said that nowadays this
bank has more than one thousand branches all over the world (1104 bdo branches) and more
than three and a half thousands of ATMs (3655 ATMs). The offices of this bank can be found in
the Middle East and in Asia as well as in Europe and North America. Let’s see main stages of
BDO’s developing.
Banco de Oro (or today it is also called BDO Unibank, Inc., which is its legal name) was created
in 1968 with the name Acme Savings Bank. At that time, it had only two branches. Then in 1976
the magnate Henry Sy together with his group of Sy Group companies acquired this bank and
gave it a name of “Banco de Oro Savings and Mortgage Bank”. In 1994 bank became commercial
and in two years its name was changed to a “Banco de Oro Universal bank” or as we used to call
it nowadays- “BDO Unibank”.

2. BUSINESS OVERVIEW

2.1. Business Description

BDO is a full-service universal bank in the Philippines. It provides a complete array of industry-
leading products and services including Lending (corporate and consumer), Deposit-taking,
Foreign Exchange, Brokering, Trust and Investments, Credit Cards, Corporate Cash Management
and Remittances in the Philippines. Through its local subsidiaries, the Bank offers Investment
Banking, Private Banking, Leasing and Finance, Rural Banking, Life Insurance, Insurance
Brokerage and Stock Brokerage services.

2.2. Major Products and Services

BDO finds ways to satisfy BDO merchants' needs by providing the following:

 Straight Payment - Over-the-counter or face-to-face transactions

  Installment Payment Plan - Regular, zero percent or Buy Now, Pay Later

Cardholders can now have the flexibility to convert a regular purchase, in staggered payment,
interest free!
Consumer lifestyle and shopping habits have been rapidly changing. Banks and stores have to
acknowledge this by working together to provide increased spending power and flexible payment
options. The Installment facility, traditionally used only for purchase of big-ticket items such as
appliances, furniture, gadgets, etc. has evolved. Clothing and other basic necessities are now also
offered on installment to become more affordable to the consumers. This facility is available to
all BDO cardholders, the largest card base in the country.
This program will not just boost your store's sales but likewise benefit from the market we both
serve.

 Delivery/Events - Uses remote/wireless terminals ideal for delivery services, events and
exhibits.

Refers to BDO's facility of card acceptance using the Point-of-Sale Wireless Technology which will
be installed at your site to be used for deliveries, events or roadshows without the need of
telephone access.

 eCommerce - Internet/On-line transactions

The BDO Internet Payment Gateway Facility provides a standard internet connection for your
company to securely and reliably send and receive payment authorizations allowing your
customers to purchase goods and services from your internet site

 Mail Order/Telephone Order (MOTO) - Cardholder Not Present transactions

This facility allows your company the privilege of accepting transactions that are called-in, mailed
or faxed by your customers. As such, your company will be able to accommodate transactions
without the presence of the cardholders at your establishment.

 Recurring Payment System (RPS) - Merchants with continuous billing transactions like
insurance premiums, subscription payments and club membership dues

The Recurring Payment System (RPS) Facility is used frequently by companies for "auto-debit-
arrangements" with clients. This payment facility allows the company to process transactions
which are recurring in nature such as periodic fees/charges.

BDO also provides acquired merchants the following Services:

 Point of Sale (POS) terminal installation

 Card acceptance and POS terminal usage orientation

 Supplies

 Terminal maintenance, servicing and repair

 Merchant Services Call Center (with PLDT and Digitel toll-free number)

 Merchant Online access - transaction reports for payment reconciliation available via web

 Account Officers and Relationship Managers that monitors merchant's need

2.3. Markets and Sales Activities

BDO’s branches are at the forefront of setting high standards as a sales and service-oriented,
customer-focused force.

The customer experience is in many ways the sum total of what’s transpiring inside an
organization, sometimes even indirectly. If there’s no alignment of internal behaviors, it seeps
into the customer experience. Yet, if every individual in the business is aligned and working in
harmony, then customers will experience that positive coherence every time they interact with
the company. This brings about the very tangible benefits of more customers, greater loyalty,
and premium pricing.

What was needed at BDO was a move away from simpler models of broadcasting in favor of a
segmented, tailored approach that truly activated employees as agents of business growth – from
understanding to action and from action to initiative.

“We recognized that sustaining the brand proposition was key, especially with the turnovers, and
the growth and expansion of the business across markets and geographic location. We focused
on the customer experiences we wanted to nurture and then worked with Interbrand to highlight
the behaviors that brought BDO’s brand proposition to life,” added Tan.

The following practices have been key to delivering BDO’s employee engagement effectively:

 This was an initiative endorsed and led by BDO’s President and senior leadership. While
employee engagement efforts may start from the bottom up or within one division, true
organizational impact ultimately requires the support of top leadership.

 Segmenting the workforce similar to segmenting customers – it’s important to work not
only with HR, but also key business and functional heads to understand the different needs
of diverse employee groups. An individual working as a bank teller in the provinces will
have different motivations than that of a senior banker working in head office.

 Move beyond internal communications – emphasize how to live the brand through
actionable behaviors and link these actions to desired customer experiences.

 Help internal staff understand the role they play on the outside. Many back-office function
employees don’t understand or even realize the vital role they play in delivering and
influencing the customer experience.

 It’s important to generate a sense of momentum and energy. An effective tactic is to pilot
programs that quickly demonstrate the positive business impact of engagement.

 Create scalable solutions that can easily be accessed and delivered through digital
channels. For BDO, Interbrand created an internal socialization tool that allowed staff at
all levels and all locations to search and share exemplary ‘We find ways’ success stories.

Today, BDO maintains a strong Number 1 or 2 market share position in almost every major
product category of significance. It has become the overwhelming image leader in terms of
defined brand attributes, critical awareness and patronage – surpassing its nearest competitors
within three years of establishing its brand proposition.

Annual usage, attitude and image studies since 2010 show that customer experience in the branch
network has been a major driver of BDO’s image, along with the advertising. Since the beginning,
the BDO customer promise has been consistent and unchanged as “We find ways” – and
supported by its customer service philosophy. This commitment is reflected in BDO’s customer
tracking scores over the past 5 years, in which the bank’s main index score exceeds both regional
and global standards. Additionally, among local multi-banking customers, the tracking likewise
shows BDO’s significant advantage over its nearest competitors.
2.4. Locations, Subsidiaries, Operating Units

BDO is divided into the following subsidiaries and affiliates:

Philippine-based subsidiaries

 BDO Capital & Investment Corporation

 BDO Insurance Brokers

 BDO Leasing and Finance Inc.(Formerly PCI Leasing and Finance)

 BDO Nomura Securities

 BDO Private Bank

 BDO Realty Corporation

 BDO Securities Corporation

 BDO Strategic Holdings(formerly EBC Investments and 6 other companies)

 BDO Technology Center(Equitable Data Center and PCI Automation Center)

 BDO Life Assurance Company

 Equimark-NFC Development Corporation

 BDO Network Bank (Formerly One Network Bank. The largest rural bank in the Philippines)

 PCIBank Europe SpA

 PCIBank Securities Inc.

 Zamora Trust Services (CIMB Bank Authorized Agent For International Tax Payments and
Tax Refunds)
BDO has the largest distribution network with over 1,300 operating branches and more than
4,000 ATMs nationwide.

3. SWOT ANALYSIS

3.1. Overview

Being the premier universal bank in the country, BDO has utilized its strengths in building
customer loyalty throughout the years. With their slogan, “We Find Ways”, the bank has been
able to build a strong customer base to the extent of operating in extensive banking hours. BDO
is capable of meeting the customers’ needs efficiently with the use of advanced technology. This
allowed the company to diversify and innovate its services through offering loans and deposits,
payments and settlement services, asset management, investment banking, dealership and
brokerage, insurance services, etc. In addition, BDO has a firm and competent management
operated by the Sy family, which pioneered the establishment of SM Malls. However, due to its
limited international presence, BDO has not yet expanded into most of the geographical areas of
the ASEAN region. The bank has also limited presence in rural areas, and some branches pose
inconsistencies with regard customer services. Also, a big threat to BDO would be the tight
competition in the market, with Bank of the Philippine Islands (BPI) and Metropolitan Banking
Corporation (Metrobank) as its close competitors. The competitors of BDO in the market are not
just confined in domestic financial institutions but also in foreign banks. This can be due to the
increase of the presence of foreign banks as there is an existence of foreign bank liberalization
act. Other external factors contributing to the threats of BDO includes government regulation.
The bank is regulated by laws and the government is in control when it comes to tax
implementations; the Bangko Sentral ng Pilipinas (BSP), on the other hand, determines the
interest rates which affects the bank’s profits.

3.2. Strengths

Advanced technology, customer loyalty, strong and competent management, diverse and
innovative services, extensive banking hours

3.3. Weaknesses

Limited international presence, limited presence in the rural areas, inconsistencies in customer
services
3.4. Opportunities

Expansion to foreign markets, merge with other banks, increase exposure in the Philippines
3.5. Threats

Tight competition in the market, no substitute for financial services, increased amount of foreign
banks, government regulation, ASEAN integration

4. FINANCIAL STATEMENT ANALYSIS

4.1. Financial Statements – 3 years comparative

4.1.1. Income Statement

2018 2017 2016

Period Ending:
31/12 31/12 31/12

Net Interest Income 98292 81753 65624

Loan Loss Provision 6286 6537 3815

Net Interest Income After Loan Loss Provision 92006 75216 61809

Non-Interest Income, Bank 51293 47206 41613

Non-Interest Expense, Bank -99653 -84865 -70379

Net Income Before Taxes 43646 37557 33043

Provision for Income Taxes 11007 9452 6797

Net Income After Taxes 32639 28105 26246

Minority Interest 69 -35 -12

Equity In Affiliates - - -

U.S GAAP Adjustment - - -

Net Income Before Extraordinary Items 32708 28070 26234

Total Extraordinary Items - - -

Net Income 32708 28070 26234

Total Adjustments to Net Income -339 -340 -339

Income Available to Common Excluding
32369 27730 25895
Extraordinary Items
Dilution Adjustment - - -

Diluted Net Income 32369 27730 25895

Diluted Weighted Average Shares 4372 4322 3982.12

Diluted EPS Excluding Extraordinary Items 7.4 6.42 6.5

DPS - Common Stock Primary Issue 1.2 1.2 1.15

Diluted Normalized EPS 7.32 6.36 6.42

4.1.2. Balance Sheet

2018 2017 2016

Period Ending:
31/12 31/12 31/12

Total Current Assets - - -

Total Assets 3022247 2668104 2324999

Cash & Due from Banks 463173 449793 400705

Other Earning Assets, Total 404982 351639 284902
Net Loans 1993301 1724996 1455842
Property/Plant/Equipment, Total - Net 33660 29346 26912
Property/Plant/Equipment, Total –
60263 54263 48709
Gross
Accumulated Depreciation, Total -26603 -24917 -21797
Goodwill, Net 4435 4435 4435
Intangibles, Net 5064 4961 4826
Long Term Investments 5081 4945 4449
Other Long Term Assets, Total 8388 8103 7755
Other Assets, Total 104163 89886 135173
Total Current Liabilities - - - -

Total Liabilities 2694875 2370616 2108183

Accounts Payable 20695 27898 24932

Payable/Accrued - - -
Accrued Expenses - - -
Total Deposits 2419965 2121012 1905204
Other Bearing Liabilities, Total 3591 4059 3194
Total Short Term Borrowings - - -
Current Port. of LT Debt/Capital
- - -
Leases
Other Current liabilities, Total 1342 1825 1568
Total Long Term Debt 153653 140514 110586
Long Term Debt 153653 140514 110586
Capital Lease Obligations - - -
 Total Debt 153653 140514 110586
Deferred Income Tax - - -
Minority Interest 777 852 743
Other Liabilities, Total 94852 74456 61956
Total Equity 327372 297488 216816

Redeemable Preferred Stock, Total - - -

Preferred Stock - Non Redeemable,
5150 5150 5150
Net
Common Stock, Total 43740 43690 36500
Additional Paid-In Capital 123977 122966 70127
Retained Earnings (Accumulated
171124 136894 114407
Deficit)
Treasury Stock – Common - - -
ESOP Debt Guarantee - - -
Unrealized Gain (Loss) -9956 -2983 -2911
Other Equity, Total -6663 -8229 -6457
Total Liabilities & Shareholders' Equity 3022247 2668104 2324999

Total Common Shares Outstanding 4374.05 4368.97 3819.88

Total Preferred Shares Outstanding 515 515 538.97

4.1.3. Cash Flow

2018 2017 2016

Period Ending:
31/12 31/12 31/12

Period Length: 12 Months 12 Months 12 Months

Net Income/Starting Line 43646 37557 33043

Cash From Operating Activities 90312 -2819 63566

 Depreciation/Depletion 5776 5172 4782
Amortization - - -
Deferred Taxes - - -
Non-Cash Items -91965 -76027 -64600
Cash Receipts - - -
Cash Payments - - -
Cash Taxes Paid 10631 8836 6528
Cash Interest Paid 23833 17650 12488
Changes in Working Capital 132855 30479 90341
Cash From Investing Activities -56740 -67731 -29424

Capital Expenditures -8135 -6158 -5537

Other Investing Cash Flow Items,
-48605 -61573 -23887
Total
Cash From Financing Activities 2399 83983 -5401

Financing Cash Flow Items - - -

Total Cash Dividends Paid -5612 -5632 -4766
Issuance (Retirement) of Stock,
461 60029 238
Net
Issuance (Retirement) of Debt,
7550 29586 -873
Net
Foreign Exchange Effects - - -

Net Change in Cash 35971 13433 28741

4.2 Common-size financial statements – 3 years comparative

4.2.1 Discussion and analysis

In the income statement, most of the values presented increased. And this is a good sign because
it only shows that a company is doing well. The financial earnings performance of the BDO over
the years 2016-2018 was also shown above. For the balance sheet, almost all the values have
increased. It means that the financial status of the business as of 2016-2018, that BDO owns
(assets) has increased in number. This means that the company probably acquired some new
facilities and equipment. For how much it owes (liabilities), some of the values increased but
some decreased. It only shows that they borrowed money from other sources. And for the amount
invested in the business (equity), some increased in number while others decreased. But some
still remain the same. It means that the number of investors increased. It could also mean that
some investors pulled their money out of the company. For the cash flow statement it shows that
almost all values increased. It means that the company’s cash is being generated (cash inflows),
and where its cash is being spent (cash outflows), for the year 2016-2018, was regulated well. It
is important for analyzing the liquidity and long term solvency of a company.

4.2.2 Trend Analysis over 3 years, % changes

Name Company Industry

P/E Ratio TTM 15.73 16.88

Price to Sales TTM 3.91 4.55

Price to Cash Flow MRQ 8.87 11.11

Price to Free Cash Flow TTM 48.23 20.25

Price to Book MRQ 1.9 1.71

Price to Tangible Book MRQ 1.87 1.8

Gross margin TTM - 53.98%

Gross Margin 5YA - 48.8%

Operating margin TTM 32.34% 33.1%

Operating margin 5YA 30.97% 34.14%

Pretax margin TTM 32.34% 34.25%

Pretax margin 5YA 30.97% 35.54%

Net Profit margin TTM 24.95% 27.62%

Net Profit margin 5YA 24.27% 29.81%

Revenue/Share TTM 39.53 19.29

Basic EPS ANN 7.4 5.48

Diluted EPS ANN 7.4 5.48

Book Value/Share MRQ 82.73 50.81

Tangible Book Value/Share MRQ 82.73 48.93

Cash/Share MRQ 93.78 66.65

Cash Flow/Share TTM 10.98 6.51

Return on Equity TTM 13.06% 10.81%

Return on Equity 5YA 11.96% 13.35%

Return on Assets TTM 1.44% 1.27%

Return on Assets 5YA 1.2% 1.57%

Return on Investment TTM - 4.97%

Return on Investment 5YA - 7.78%

EPS(MRQ) vs Qtr. 1 Yr. Ago MRQ 43.16% 3.98%

EPS(TTM) vs TTM 1 Yr. Ago TTM 49.31% 2.16%

5 Year EPS Growth 5YA 4.61% 9.03%

Sales (MRQ) vs Qtr. 1 Yr. Ago MRQ 21.96% 13.69%

Sales (TTM) vs TTM 1 Yr. Ago TTM 31.15% 12.95%

 5 Year Sales Growth 5YA 17.92% 12.29%

5 Year Capital Spending Growth 5YA 12.47% 21.69%

Quick Ratio MRQ - 0.69

Current Ratio MRQ - 0.71

LT Debt to Equity MRQ 49.23% 12.02%

Total Debt to Equity MRQ 49.23% 68.21%

Efficiency

Asset Turnover TTM - 0.08

Inventory Turnover TTM - 1.92

Revenue/Employee TTM - 3.75M

Net Income/Employee TTM - 658.51K

Receivable Turnover TTM - 0.38

Dividend Yield ANN 0.77% 1.52%

Dividend Yield 5 Year Avg. 5YA 0.96% 1.6%

Dividend Growth Rate ANN 1.53% 5.59%

Payout Ratio TTM 6.03% 7.86

TTM = Trailing Twelve Months 5YA = 5-Year Average MRQ = Most Recent Quarter

4.3 Financial Ratios*

4.3.1 Liquidity ratios

Current Ratio
Current Ratio= Current Assets/ Current Liability
 = 3022247/ 2694875
= 1.12

4.3.2 Capital Structure ratios

% of Equity =Market Value of Equity/Market Value of Equity + Market Value of Debt

Market Value of Debt/ Market Value of Equity + Market Value of Debt

% of Debt =

4.3.3 Asset management efficiency ratios

ACCOUNTS PAYABLES TURNOVER
Accounts Payables Turnover = Total Purchases/Average Accounts Payables

AVERAGE NO. OF DAYS PAYABLE OUTSTANDING

Average No. of Days Payable Outstanding = 365/Accounts Payables Turnover

WORKING CAPITAL TURNOVER

Working Capital Turnover = Sales/Average Working Capital
Working Capital = Current Assets-Current Liabilities

FIXED ASSETS TURNOVER

Fixed Asset Turnover = Sales/Average Fixed Assets

TOTAL ASSET TURNOVER

Total Assets Turnover = Sales/Average Total Assets

4.3.4 Profitability ratios

4.3.5 Market value ratios

 4.4 Dupont Analysis (chart)

https://www.bdo.com.ph/about-bdo/business-operation

https://quotes.wsj.com/PH/BDO/financials/annual/income-statement

https://quotes.wsj.com/PH/BDO/company-people

https://binixo.ph/blog/bdo-history/

https://www.bdo.com.ph/support-topics/board-directors-and-shareholder-matters/who-are-
bdo%E2%80%99s-major-shareholders

https://www.bdo.com.ph/mobile/about-bdo

https://edge.pse.com.ph/companyInformation/form.do?cmpy_id=260

https://www.bdo.com.ph/business/cards/merchant-accreditation/products-and-services

https://www.marketing-interactive.com/features/case-study-bdo-interbrand/

https://www.bdo.com.ph/subsidiaries
https://www.researchandmarkets.com/reports/4668890/bdo-unibank-inc-strategy-swot-and-
corporate

https://www.dlsu.edu.ph/wp-content/uploads/pdf/conferences/research-congress-
proceedings/2015/EBM/002EBM_Caoile_PV.pdf

https://www.bdo.com.ph/sites/default/files/pdf/BDO-Unibank-2016-Annual-Report.pdf

https://www.bdo.com.ph/sites/default/files/pdf/BDO%202017%20Annual%20Report.pdf

https://quotes.wsj.com/PH/BDO/financials/annual/cash-flow

https://www.investing.com/equities/bdo-unibank-income-statement

https://www.investing.com/equities/bdo-unibank-balance-sheet

https://www.investing.com/equities/bdo-unibank-cash-flow

https://ph.investing.com/equities/bdo-unibank-ratios