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Assignment 3 Fin MNGMNT

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SIMON- Izumi Baban
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14 views

Assignment 3 Fin MNGMNT

Uploaded by

SIMON- Izumi Baban
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Assignment No.

3 – Financial Statements

1. Statement of Financial Position


San Miguel Corporation's 2023 Statement of Financial Position shows an overall asset of ₱1.18
trillion, a small rise over 2022. The company's liquidity fell significantly, with cash and cash
equivalents falling from ₱137 billion in 2022 to ₱56 billion in 2023. This drop indicates either
significant capital expenditures or cash withdrawals. Current liabilities increased due to higher
short-term borrowing (₱21 billion) and long-term debt, reflecting reliance on external finance.
This increase in liabilities may indicate a need to manage debt more cautiously, potentially
affecting future liquidity and financial flexibility.
2. Statement of Income
In 2023, San Miguel Corporation experienced a significant financial loss of ₱16.9 billion, up
from ₱5.2 billion in 2022. The sharp loss was mostly caused by a rise in finance expenses, which
nearly doubled from ₱19.6 billion in 2022 to ₱37.8 billion in 2023 due to rising interest rates and
borrowings. The corporation also lost ₱2 billion in foreign exchange. These concerns were
exacerbated by increased operational expenses and derivative losses. Despite earning cash from
dividends, interest, and other sources, these gains were inadequate to cover the increased
expenditures.
3. Statement of Changes in Equity
Despite a net loss for the year, San Miguel Corporation's equity increased to ₱561 billion in 2023
from ₱543 billion in 2022. The re-issuance of treasury shares, totaling ₱46.7 billion, contributed
significantly to the growth in equity. Another issue was the redemption of some of its capital
instruments and preferred shares, which helped to balance its total equity position. These capital
flows were sufficient to offset the company's losses, proving its capacity to attract fresh investors
and manage its capital base successfully.
4. Statement of Cash Flows
San Miguel's cash flows from operational activities were positive at ₱5.3 billion, down from
₱22.6 billion in 2022, confirming the business's capacity to produce cash from core operations
despite a net loss. Meanwhile, there was a considerable cash outflow of ₱127 billion from
investing operations. This was largely due to significant investments in shares and advances, as
well as property and equipment, as the corporation attempted to reinvest in its operations. In
2023, the company raised ₱41 billion through short-term borrowings to fund capital expenditures
and debt service.

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