AlejandroGonzalezFinanceRefresher

AlejandroGonzalezFinanceRefresher - DeLaSalleUniversity

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De La Salle University Graduate School of Business VERIZON COMMUNICATIONS PHILIPPINES, INC. FINANCIAL ANALYSIS 1
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CREATED BY:  ALEJANDRO S. GONZALEZ DLSU ID #  10896252 TABLE OF CONTENTS COMMENTS ON THE RESULTS OF ANALYSIS …………………………………. . 3-5 WORKING PAPERS ………………………………………………………………. .. (refer to Appendices) VERTICAL ANALYSIS [2009, 2008, 2007, 2006] HORIZONTAL ANALYSIS [2009, 2008, 2007, 2006] TREND ANALYSIS [2006, 2007, 2008, 2009] FISCAL FITNESS ANALYSIS [2009, 2008, 2007, 2006] FINANCIAL RATIOS [2009, 2008, 2007, 2006] MANAGEMENT RESPONSIBILITY LETTER ………………………………………. .. 6-8 CHAIRMAN OF THE BOARD  PRESIDENT OR CHIEF EXECUTIVE OFFICER CHIEF FINANCE OFFICER AUDITOR’S REPORT 2
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.. 9-16 STATEMENT OF FINANCIAL POSITION STATEMENT OF COMPREHENSIVE INCOME STATEMENT OF CHANGES IN EQUITY STATEMENT OF CASH FLOWS COMMENTS ON THE RESULTS OF ANALYSIS 1. Vertical Analysis a. Statement of Financial Position Total assets are mostly consists of current assets, specifically of related party transactions which is about  83.43% in 2009. These are transactions primarily related to the company’s normal business operations such  as marketing, technical and operational support services. The company enters into transactions with other  related parties consisting mainly of interest-bearing cash advances and recharges of various expenses such  as payroll, supplies and utilities. The company has not recorded any impairment of receivables relating to  amounts owed by the related parties. The related party balances are interest bearing, computed on rates based on the Federal Short Term Rates  (FSTR) for US entities and the London Inter-Bank Offered Rate (LIBOR) for non-US entities. The difference of around 5 million pesos and 18 million pesos of balances under interest expense is recorded  which gave the vertical analysis of liabilities as against the assets to be much higher. This towed on a capital  deficit of 19.91% and 27.15% in 2009 and 2008. But since related parties are all Verizon subsidiaries, even  though  there   have  been  no  guarantees provided   or received  for  these  receivables  and  payables,  the  assessment undertaken on each financial year is examined by the financial position of these related parties  and the market in which these parties are operating. 3
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AlejandroGonzalezFinanceRefresher - DeLaSalleUniversity

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