RE P UBL IC OF THE P HIL IPP IN E S

Ilocos Sur Polytechnic State College

Tagudin Campus, 2714 Ilocos Sur

Analysis of Audited Financial Statements of San

Miguel Corporation 2021

Presented to Mr John Paul Daria , Instructor

College of Business Management and Entrepreneurship
Ilocos Sur Polytechnic State College

In Final Fulfilment
of the Requirements for the Course
Fin 151 Financial Analysis and Reporting

BARNACHEA, JESSIE
FERNANDEZ, MICHELLE
HA B E R , H E I D I E C.
L OREN ZA NA, DAND Y
SOMERA, JOYCE
BS BA FM 2 A S tu d e nts

Bachelor of Science in Business Administration

1 s t Semester 2022- 2023
 TABLE OF CONTENTS

I. Company Overview

II. Details

a. Statements of Financial Position

b. Statement of Comprehensive Income
c. Statement of Changes in Equity
d. Statement of Cash Flows

III. Financial Statement Analysis

a. Vertical Analysis
b. Horizontal Analysis
c. Financial Ratio Analysis

IV. Summary

V. Reference
“Your World Made Better”

40 San Miguel Avenue, Mandaluyong City

1550 Metro Manila, Philippines
P.O. Box 271 Manila Central Post Office
Telephone: (+632)8-632-300
 V IS IO N
We are San Miguel.

Guided by a strong sense of social, environmental and economic

responsibility, our businesses will lead efforts to deliver on national goals,
setting the pace of progress in the Philippines.

M IS SI ON
To provide good and vital services well within the reach of every Filipino,
making everyday life a celebration

OBJECTIVES
San Miguel’s goal is to help people enjoy and make progress in their lives
through the many products and services that our company offers. We want
to give every customer and consumer we touch access to the best we can
offer – whether in terms of quality, or affordability or choice.
 I. INTRODUCTION

The San Miguel Corporation was established in 1890 as La Fabrica de

Cerveza de San Miguel founded by Don Enrique Maria Barreto de Ycaza y
Esteban. The Southeast Asia’s first brewery produced and bottled what
would eventually become one of the bestselling beers in the region. Within
the span of a generation, San Miguel Beer became an icon among beer
drinkers.

By 1914, San Miguel Beer was being exported from its headquarters
in Manila to Shanghai, Hong Kong and Guam. A pioneer in Asia, San Miguel
established a brewery in Hong Kong in 1948 , the first local brewer in
the crown colony.

Today, San Miguel Beer–the Company’s flagship product–is one of the

largest selling beers and among the top 10 beer brands in the world. While
brewing beer is the company’s heritage, San Miguel subsequently branched
out into the food and packaging businesses.

From the original cerveza that first rolled off the bottling line, San
Miguel Corporation has since expanded its portfolio to produce a wide range
of popular beverage, food and packaging products which have–for over a
century–catered to generations of consumers’ ever changing tastes. Today,
San Miguel Corporation is one of the region’s largest diversified
conglomerates. Its businesses span a variety of industries— fuel and
petrochemicals; power, and infrastructure. Its reach has expanded
regionally and globally, first through manufacturing operations in Asia,
followed by key partnerships with global industry leaders in the beverage,
food, and packaging industries.

The Company’s manufacturing operations extend beyond the

Philippines to Hong Kong, China, Indonesia, Vietnam, Thailand and
Malaysia. Its products are exported to major markets around the world.
Continuing a tradition of product quality, San Miguel is capitalizing on its
unique strengths in brands and distribution to weave its products more
deeply into the fabric of everyday life. Not just in the Philippines but in the
Asia-Pacific region.
 II. C OM P AN Y P ROFILE

San Miguel Corporation is one of the largest and most diversified

conglomerates in the Philippines by revenues and total assets, with sales
equivalent to approximately 4% of the Philippine GDP in 2020.

SMC’s five key business groups, most of which are market leaders in
their respective industries, include the following: food and beverage,
packaging, fuel and oil, energy, and infrastructure. In addition, SMC has
investments in other businesses such as property development and leasing,
cement, car distributorship, and banking services.

SMC has a portfolio of companies that is interwoven into the economic

fabric of the Philippines, benefiting from, as well as contributing to, the
development and economic progress of the nation. SMC, through its
subsidiaries and affiliates, has become a market leader in its businesses in
the Philippines with an extensive portfolio of products that include beer,
spirits, non-alcoholic beverages, poultry, animal feeds, flour, fresh and
processed meats, dairy products, coffee, various packaging products, and a
full range of refined petroleum products, most of which are leaders in their
respective markets. In addition, SMC contributes to the growth of
downstream industries and sustains a network of hundreds of third-party
suppliers.
 III. COMPANY DETAILS

SAN MIGUEL CORPORATI ON

S EP AR AT E F IN A N C I AL S T AT E M E N T S
D ECEMBER 31, 2021 AND 20220

PARENT AUDITED FINANCIAL STATEMENTS

APRIL 2 5 , 2 0 2 2
 I V. FI NANC IAL STAT EM ENT ANALYSIS
a. VERT IC AL AN ALYS IS

SAN MIGUEL CORPORATION

ST A T E M E N T O F F I N A N CI A L P OS IT I ON
A S OF D E CE M B R E 3 1, 2 02 0 A N D 20 21
(IN MILLIONS)
ASSETS 2021 % 2020 %
Current Assets
Cash a nd Cash Equi va lents P96, 509 10.25% P135, 816 14.69%
Receivables - net 91, 323 9.7% 88, 562 9.58%
Prepaid Expenses and other current 5, 655 0.6% 5, 411 0.59%
Assets
Total Current Assets 193, 487 20.55% 229, 789 24.86%
Non-current Assets
Investments and Advances - net 730, 333 77.55% 680, 565 73.62%
Property, Plant, and Equipment - net 1, 250 0.13% 1, 162 0.13%
Right-of-use Assets - net 444 0.05 519 0.06%

Investment Property - net 779 0.08% 790 0.08%

Deferred Tax Assets - net 2, 005 0.21% 4, 102 0.44%
Other non-current assets - net 13, 465 1.43% 7, 538 0.81%
Total N o n c u r r e n t Assets 748, 276 79.45% 694, 676 75.14%
TOTAL ASSETS P941, 763 100% P924, 465 100%

LIABILITIES AND EQUITY

Current Liabilities
Loans Payable P51, 450 5.46% P23, 950 2.59%
Accounts Payable and Accrued Expenses 11, 200 1.19% 11, 131 1.20%
Income and Other Taxes Payable 750 0.08% 707 0.08%
Subscription Payable 1, 444 0.15% 2, 710 0.29%
Dividends Payable 2, 879 0.31% 3, 291 0.36%
Current Maturities of long-term debt - 16, 833 1.79% 159 0.02%
net of debt issue costs
Total Current Liabilities 84, 556 8.98% 41, 948 4.54%

Non-current Liabilities
Long-term Debt - net of current 280, 767 29.81% 261, 223 28.26%
maturities and debt issue costs
Other noncurrent liabilities 1, 479 0.16% 2, 414 0.26%
Total Non-current Liabilities 282, 246 29.97% 263, 637 28.52%
TOTAL LIABILITIES 366, 802 38.95% 305, 585 33.06%
EQUITY
Capital Stock - Common 16, 443 1.75% 16, 443 1.78%
Capital Stock - Preferred 10, 187 1.08% 10, 187 1.10%
Additional Paid-In Capital 177, 719 18.87% 177, 719 19.22%
Ca pi ta l Se cu ri ti es 33, 031 35.07% 33, 031 3. 57%
Equity Reserves 1, 663 0.18% 1, 052 0.11%
Returned Earnings 480, 281 51% 490, 594 53.07%
Treasury Stock (144, 363) (15.33%) (110, 146) (11.91%)
TO TA L E Q UI TY 574, 961 61.05% 618, 880 66.94%

TOTA L LIA BILITIES AND EQUITY P941, 763 100% P924, 465 100%

SAN MIGUEL CORPORATION

STATEMENT OF INCOME
FOR THE YEARS ENDED DECEMBRE 31, 2020 AND 2021
(IN MILLIONS)
2021 % 2020 %
REVENUES
Dividend Income P14, 713 P13, 000
Sale of Services 3, 210 4, 436
Interest Income 1, 875 3, 229
Rent Income 355 171
Gain (loss) on derivatives - net 65 (1, 752)
Gain on Sale of investments and others 144 4, 666
TOTAL P20, 362 100% P23, 750 100%

EXPENSES
Costs and Expenses 4, 000 19.64% 5, 270 22.19%
Interest Expense and other Financing 10, 755 52.82% 12, 618 53.13%
Ch a rge s
Loss (gain) on foreign exchange - net 2, 390 11.74% (1, 912) 8.05%
TOTAL P17, 145 84.20% 15, 976 67.27%

INCOME BEFORE TAX 3, 217 15.80% 7, 774 32.73%

I N C O M E TA X E X P EN S E (2, 023) (9.94%) (816) (3.44%)

NET INCOME P1, 194 5.86% P6, 958 29.29%

SAN MIGUEL CORPORATION

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBRE 31, 2020 AND 2021
(IN MILLIONS
2021 %
NET INCOME P1, 194 66.15%
O TH ER C O M PREH EN S I VE I N C OM E ( LOS S )
Item that will not be reclassified to profit or loss
Equity Reserve for Retirement Plan 764 42.33%
Income Tax Expense (108) (5.98%)
TOTAL 656 36.34%

Items that may be reclassified to profit or loss

Loss on Cash flow Hedges (1) (0.06%)
 Income Tax Benefits (expense) (36) (1.99%)
TOTAL (37) (2.05%)

Net Loss on Financial Assets at fair value through (4) (0.22%)

other Comprehensive Income
Income Tax Expense (4) (0.22%)
TOTAL (8) (0.44%)

OTHE R COMP RE HE N SIV E IN COME (L OSS) – Ne t of 611 33.85%

Tax
TOTA L COMP RE HE N SIV E IN COME – Ne t of Ta x P1, 805 100%

SAN MIGUEL CORPORATION

STATEMENT OF CHANGES IN EQUITY
F O R T H E Y E A R S E N D E D D E CE M B R E 3 1 , 2 0 2 0 A N D 2 0 2 1
(IN MILLIONS)
2021 %

Capital Stock – Common P16, 443

Capital Stock – Preferred 10, 187
Additional Paid in Capital 177, 719
Senior Perpetual Capital Securities 24, 211
Redeemable Perpetual Securities 8, 820
Reserve for Retirement Plan 1, 153
Hedging Reserve (503)
Fair Value Reserve 402
Retained Earnings 490, 594
Treasury Stock – Common (67, 093)
Treasury Stock - Preferred (43, 053)
TOTAL P 618, 880 107.64%

Equity Reserve for Retirement Plan P656

Net Loss on Cash Flows Hedges (37)
Net Loss on Financial Assets at fair value through other (8)
Comprehensive Income

Other Comprehensive Inco me (loss) 611

Net Income 1, 194
TOTAL COMPREHENSIVE INCOME P 1, 805 0.31%

Redemption of Subseries “2-C”, Subseries “2-E” and (34, 217) (5.95%)

Subseries “2-G” Preferred Shares
Cash Dividends and Distributions:
Common (3, 337) (0.58%)
Preferred (6, 002) (1.04%)
Senior Perpetual Capital Securities (1, 804) (0.31%)
Redeemable Perpetual Securities (364) (0.06%)

T O T A L E Q U I T Y A S D E CE M B E R 3 1 , 2 0 2 1 P 574, 961 100%

 SAN MIGUEL CORPORATION
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEM BRE 31, 2020 AND 2021
(IN MILLIONS)
2021 %
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax P3,217
Adjustments for:
Interest expense and other financing
ch ar ge s 10,755
Unrealized loss (gain) on foreign
exchange - net 5,380
Gain on sale of investments and others (144)
Depreciation, amortization and others - net (485)
Interest income (1,875)
Dividend income (14,713)
Operating income (loss) before working capital changes
2,135
C ha ng es in n on cash c ur re nt as se ts , ce rt ai n c ur re nt l iabi li t ie s
and others (3,030)
Ca sh u se d in op er at i o ns (895)

Dividend received 14,604

Interest expense and other financing charges paid
(9,545)
Income taxes paid (74)
N e t c a s h f l o w s p r o v i d e d b y ( u se d in ) o p e r at i n g a c ti v i ti e s
4 , 0 90 4.24%
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to:
I n v e s t m e n t s an d ad v an c e s (57,907)
Property and equipment (160)
Investment property -
Proceeds from redemption of investment in
preferred shares 7,911
Interest received 1,395
Proceeds from sale of intangible assets,

investment property and others 149

Increase in other noncurrent assets (5,092)
N e t c a s h f l o w s p r o v id e d b y i n v e s t i ng ac t iv iti e s ( 53 ,7 04 ) (55.65%)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from:
Short-term borrowings P260,200
Long-term borrowings 56,133
Payments of:

Short-term borrowings (232,700)

Long-term borrowings (31,691)

Lease liabilities (59)
Cash dividends and distributions paid (11,919)
Redemption of preferred shares (34,217)
Proceeds from re-issuance of treasury shares -
Proceeds from issuance of senior perpetual capital securities
-
Proceeds from the issuance of redeemable perpetual securities -
ne t -
N e t c a s h f lo w s p r o v id e d b y f in a nc i ng ac ti v it ie s 5,747 5.95%

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH

EQUIVALENTS 4,560 4.72%
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
(39,307) (40.73%)
C A S H A N D C A S H E Q U I V A L E N T S A T B E G I N N I N G O F YE A R
135,816 140.73%
CASH AND CASH EQUIVALENTS AT END OF YEAR
P96,509 100%

b. HORIZONTAL ANALYSIS
SAN MIGUEL CORPORATION
ST A T E M E N T O F F I N A N CI A L P OS IT I ON
A S O F D E CE MB R E 31 , 20 20 A N D 2 02 1
(IN MILLIONS)
ASSETS 2021 2020 Di ff e r e n c e %
Current Assets
Cash a nd Cash Equi va lents P96, 509 P135, 816 -P38, 677 -28.61%
Receivables - net 91, 323 88, 562 2, 761 3.12%
Prepaid Expenses and other current 5, 655 5, 411 2 44 4.51%
Assets
Total Current Assets 193, 487 229, 789 -P36,302 - 15.80%

Non-current Assets
Investments and Advances - net 730, 333 680, 565 49, 768 7.31%
Property, Plant, and Equipment - net 1, 250 1, 162 88 7.57%
Right-of-use Assets - net 444 519 - 75 - 14.45%
Investment Property - net 779 790 - 11 - 1.39%
Deferred Tax Assets - net 2, 005 4, 102 - 2, 097 -51.12%

Other noncurrent assets - net 13, 465 7, 538 5,927 78.63%

Total Noncurrent Assets 748, 276 694, 676 53,600 7.72%

TOTAL ASSETS P941, 763 P924, 465 17, 298 1.87%

LIABILITIES AND EQUITY

Current Liabilities
Loans Payable P51, 450 P23, 950 27, 500 114.82%
Accounts Payable and Accrued 11, 200 11, 131 69 0.62%
Expenses
Income and Other Taxes Payable 750 707 43 6.08%
Subscription Payable 1, 444 2, 710 - 1,266 -46.72%

Dividends Payable 2, 879 3, 291 -412 - 12. 52%

Current Maturities of long-term debt - 16, 833 159 16, 674 10486.79%
net of debt issue costs
Total Current Liabilities 84, 556 41, 948 42,608 101.57%

Non-current Liabilities
Long-term Debt - net of current 280, 767 261, 223 19,544 7.48%
maturities and debt issue costs
Other noncurrent liabilities 1, 479 2, 414 - 935 - 3 8. 7 3 %
Total Noncurrent Liabilities 282, 246 263, 637 18, 609 7.06%
TOTAL LIABILITIES 366, 802 305, 585 61, 217 20.03%

E QUITY
Capital Stock - Common 16, 443 16, 443 0 --
Capital Stock - Preferred 10, 187 10, 187 0 --
Additional Paid-In Capital 177, 719 177, 719 0 ---
C apit al S ec urit ie s 33, 031 33, 031 0 ---
Equity Reserves 1, 663 1, 052 611 58.08%
Returned Earnings 480, 281 490, 594 - 10,313 -2. 10%
Treasury Stock (144, 363) (110, 146) (34,217) 31.07%
T OT A L E QU IT Y 574, 961 618, 880 -43, 919 - 7.10%

TOTAL EQUITY AND L IAB IL ITIE S P941, 763 P924, 465 P17, 298 1.87%
 SAN MIGUEL CORPORATION
STATEMENT OF INCOME
F O R T H E Y E A R S E N D E D D E CE M B R E 3 1 , 2 0 2 0 A N D 2 0 2 1
(IN MILLIONS)
2021 2020 Difference %
REVENUES
Dividend Income P14, 713 P13, 000 P1,713 13.18%
Sale of Services 3, 210 4, 436 - 1,226 - 2 7. 6 4 %
Interest Income 1, 875 3, 229 - 1,354 - 4 1. 9 3 %
Rent Income 355 171 184 107.6%
Gain (loss) on derivatives - net 65 (1, 752) 1, 817 - 103.71%
Gain on Sale of investments and 144 4, 666 -4,522 - 9 6. 9 1 %
others
TOTAL P20, 362 P23, 750 -P3,388 - 14. 27%

EXPENSES
Costs and Expenses 4, 000 5, 270 - 1,270 - 2 4. 1 0 %
Interest Expense and other Financing 10, 755 12, 618 - 1,863 - 14. 76%
C h a rge s
Loss (gain) on foreign exchange - net 2, 390 (1, 912) 4,302 - 225%
TOTAL P17, 145 15, 976 1,169 7.32%

INCOME BEFORE TAX 3, 217 7, 774 -4, 557 - 5 8. 6 2 %

 I N C O M E TA X EX PE N S E (2, 023) (816) (1,207) 147.92%

NET INCOME P1, 194 P6, 958 -P5, 764 - 8 2. 8 4 %

SAN MIGUEL CORPORATION

STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBRE 31, 2020 AND 2021
(IN MILLIONS)
2021 2020 D if f e r e n c e %
NET INCOME P1, 194 P6, 958 -P5, 764 -82.84%
O T H E R C O M P R E H E N S I V E I N CO ME ( L O S S )
Item that will not be reclassified to profit or
loss
Equity Reserve for Retirement Plan 764 83 681 820.48%
Income Tax Expense (108) (25) (83) 332%
TOTAL 656 58 598 1031.03%

Items that may be reclassified to profit or

loss
Loss on Cash flow Hedges (1) (116) 115 -99.14%
Income Tax Benefits (expense) (36) 35 - 71 -202.86%
TOTAL (37) (81) 44 -54.32%

Net Loss on Financial Assets at fair value (4) (170) 166 -97.65%
through other Comprehensive Income
Income Tax Expense (4) (1) -3 300%
TOTAL (8) (171) 163 -95.32%

O T H E R C O M P R E H E N S I V E I N C O ME (L O SS ) – 611 (194) 805 -414.95%

Net of Tax
TO TA L C OM P R E HE N SI V E I N C OM E – N e t o f P1, 805 P6, 764 -P4,959 - 73.31%
Tax

SAN MIGUEL CORPORATION

STATEMENT OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBRE 31, 2020 AND 2021
(IN MILLIONS)
2021 2020 D i ff er en ces %

Capital Stock - Common P16, 443 P 16, 443 0 ---

Capital Stock - Preferred 10, 187 10, 187 0 ---
Additional Paid in Capital 177, 719 177, 938 -219 -0.12%
Senior Perpetual Capital Securiti es 24, 211 --- 24, 211 ---
Redeemable Perpetual Secu rities 8, 820 --- 8, 820 ---
Reserve for Retirement Plan 1, 153 1, 095 58 5.30%
Hedging Reserve (503) (422) -81 19.19%
Fair Value Reserve 402 573 - 171 - 2 9. 8 4 %
R et ai ne d E ar ni ng s 490, 594 493, 414 -2,820 - 0. 5 7%
Tr ea su r y St oc k – Co mm on (67, 093) (67, 093) 0 ---
Treasury Stock - Preferre d (43, 053) (49, 190) 0 ---
TOTAL P 618, 880 P 582, 945 P35,935 6.16%
Equity Reserve for Retirement Plan P656 58 598 1031%
Net Loss on Cash Flows Hedges (37) (81) 44 - 5 4. 3 2 %
Net Loss on Financial Assets at fair value (8) (171) 163 - 9 5. 3 2 %
through other Comprehens ive Income

Other Comprehensive Income (loss) 611 (194) 805 -

414.95%
Net Income 1, 194 6, 958 -5,764 -8.28%
TOTAL COMPREHENSIVE INCOME P 1, 805 P 6, 764 -P4, 959 - 73. 31%
Issuance of Senior Perpetual C apital --- 24, 211 -24, 211 - 100%
Securities
Issuance of Redeemable Perpetual --- 19, 522 - 19, 522 - 100%
Securities
Purchase and Cancellation of Redeemable --- (10, 810) 10, 810 - 100%
Perpetual Securi ties
Re -issuance of Treasury Shares - Preferred --- 33, 574 -33, 574 - 100%
Redemption of Series 1 and Subseries “2 - --- (27, 656) 27, 656 100%
D” Preferred Shares
Redemption of Subseri es “2-C”, Subseri es (34, 217) --- (34, 217) ---
“2-E” a nd Su bs er i es “2-G” P re fe rr ed Sh ares
Cash Dividends and Distributi ons:
Common (3, 337) (3, 337) 0 ---
Preferred (6, 002) (6, 052) 0 ---
Senior Perpetual Capital Securi ti es (1, 804) --- (1, 804) ---
Redeemable Perpetual Secu rities (364) (281) -83 29.54%
TOTAL EQUITY AS DECEMBER 31, 2021 P 574, 961 P 618, 880 -P43,919 -7.10%

SAN MIGUEL CORPORATION

STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEM BRE 31, 2020 AND 2021
(IN MILLIONS)
2021 2020 Difference %
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax P3,217 P7,774
Adjustments for:
Interest expense and other financing
ch ar ge s 10,755 12,618
Unrealized loss (gain) on foreign
exchange - net 5,380 (2,838)
Gain on sale of investments and others (144) (4,666)
Depreciation, amortization and others - net (485) 331
Interest income (1,875) (3,229)
Dividend income (14,713) (13,000)
Operating income (loss) before working capital
changes 2,135 (3,010)
C h a n g e s i n n o n c as h c u r r e n t as s e t s , c e r t ai n c ur r e n t
liabilities and others (3,030) (1,171)
C as h us ed i n o pe rat i on s (895) (4,181)

Dividend received 14,604 13,000

Interest expense and other financing charges paid
(9,545) (11,867)
Income taxes paid (74) (196)
N e t c a s h f lo w s p r o v i d ed b y ( u s e d i n ) o p e r a ti n g
activities
4 ,0 9 0 (3 , 244 ) 7,334 -226.08%
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to:
I nv e s t m e n t s a n d ad v an c e s (57,907) (36,837)
Property and equipment (160) (40)
Investment property - (4)
Proceeds from redemption of investment in
preferred shares 7,911 -
Interest received 1,395 3,151
Proceeds from sale of intangible assets,

investment property and others 149 1

Increase in other noncurren t assets (5,092) (722)
N e t c a s h f l o w s p r o v i d e d b y i n v e s t in g a c ti v i t i e s ( 53 ,7 0 4 ) (34,451) ( 1 9 , 25 3 ) 55.89%

C A S H F L O W S F R O M F I N A N C I N G A CT I V I T I E S

Proceeds from:
Short-term borrowings P260,200 P428,400
Long-term borrowings 56,133 98,864
Payments of:

Short-term borrowings (232,700) (449,200)

Long-term borrowings (31,691) (14,148)

Lease liabilities (59) (52)
Cash dividends and distributions paid (11,919) (9,773)

Redemption of preferred shares (34,217) (27,656)

Proceeds from re-issuance of treasury shares - 33,588
Proceeds from issuance of senior perpetual capital
securit ies - 24,211
Proceeds from the issuance of redeemable perpetual
securities - net - 8,712
N e t c a s h f lo w s p r o v id e d b y f in a nc i ng a c ti v i tie s 5,747 9 2, 9 4 6 -87, 199 - 93.82%

EFFECT OF EXCHANGE RATE CHANGES ON

CASH AND CASH EQUIVALENTS
4,560 (7,785) 12,345 - 158.57%
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS
(39,307) 47,466 -86, 773 - 182.81%
C A S H A N D C A S H E Q U I V A L E N T S A T B E GI N N I N G
OF YEAR 135,816 88,350 47, 466 53.72
CASH AND CASH EQUIVALENTS AT END OF
YEAR
P96,509 P135,816 -P39, 307 -28.94%
 c. FINANCIAL RATIO ANALYSIS (Liquidity, Profitability, Solvency)

1. LIQUIDITY

CU R RE N T RA TI O = C u r r e n t As s et s / C u r r e n t L ia bi li t i es

Current Assets / Current Liabilities

Current = P 193, 487 / P 84, 556 = 2.2883

Ratio

WO RKIN G CAPITAL = Curr en t Ass ets - Current Liabilitie s

Current Assets - Current Liabilities

Working = P 193, 487 - P 84, 556 = P 108, 931

Capital

A C I D T E S T R A T I O = Q u i c k As s e t s / C u r r e n t Li ab il i t ie s

Quick Assets / Current Liabilities

Acid Test = P 187, 832 / P 84, 556 = 2. 2214

Ratio

The San Miguel Corporation is liquid because its liquidity ratios

are all in positive terms. The corporation is capable to pay its short-term
obligations since it has a current ratio of 2.28:1, a working capital of P
108,931-Million, and an Acid Test Ratio of 2.22:1. The company is capable
of paying its maturing obligations since their total current asset is two times
higher than its current obligations.

2. SOLVENCY

D E B T T O EQ U I T Y R A T I O = T o t al L ia bi li t i es / T ot al e qu it y

(In Millions) = P 366, 802

P 574, 961

= 0.6380 or 0.64

DEBT RATIO = Total Liabilities / Total Assets

(In Millions) = P 366, 802

P 941, 763
 = 0.3895 or 38.95%

EQUITY RATIO = Total Equity / Total Assets

(In Millions) = P 574, 961

P 941, 763

= 0.6105 or 61.05%

E Q UI TY MU LTI PLI ER = Total As s ets / Total Equ ity

(In Millions) = P 941, 763

P 574, 961

= 1.6380

The San Miguel Corporation is solvent since it has a Debt to Equity

Ratio of 0.64 times which lesser than the normal norm of 1. The debt ratio
of the company is 38.95%, lower than 50%, and its equity ratio is 61.05%,
higher than 50%. Simply means that the corporation’s total shareholder’s
equity is higher than its long-term liabilities or debts. The company’s
productions and operations are now more than 130 years, making it achieve
stability and be known as one of the Philippines’ largest and most diversified
conglomerates.

3. PROFITABILITY

RETURN ON SALES = Earnings After Tax / Net Sales

(In Millions) = P 1, 194

P 20, 362

= 0.0586

RETURN ON ASSETS = Earnings After Tax / Average Total Assets

(In Millions) = P 1, 194

P 941,763 + P924,465
2

= P 1, 194
P 933, 114

= 0.00128
R E TU RN O N O WN ER’S EQ UI TY = Ear n in gs After Tax / Aver age
Shareholder’s Equity

(In Millions) = P 1, 194

P 574, 961 + P 618,880
2

= P 1, 194
P 596, 920.50

= 0 .0 02

The corporation is profitable since its Return on Sales is 0.0586 or

5.86%. However, the Net Income of the corporation decreased by -82.84%,
from P 6, 958-Million in 2020 to P 1 , 194-Million in 2021 . Nonetheless,
San Miguel Corporation is still profitable inside the market since all
profitability ratios and percentages are positive.

4. DU PONT EQUATION

Net Profit Margin x Asset Turnover x Equity Multiplier

Operating Income / x Total Sales / Total x Total Assets /

Total Sales Assets Shareholder’s Equity

P 3, 217 / P 20, 362 x P 20, 362 / 941, 763 x P 941, 763 / 574, 961

0.1580 x 0.0216 x 1.6380

= 0 . 0 0 5 6 or 0 . 5 6 %

The corporation has a 0.0056 or 0.56% return on equity (ROE) which

means that every peso invested in the corporation will accumulate 0.56%
profit or earnings. This indicates that investing in the corporation will be a
great opportunity and profitability for investors.
 V. SUMMARY

San Miguel Corporation delivered a strong performance in 2021

posting a growth in its consolidated net income with pre-pandemic levels,
even as it continues to focus on sustainability and nation-building to help
set the stage for a robust economic recovery. The conglomerate’s group-wide
revenues, driven by higher sales across major businesses as a result of
effective cost management initiatives and enhanced operational efficiencies.

The vertical analysis of San Miguel Corporation shows that out of the
total assets, P 941,763-M, 20.55% is the total current assets of the
corporation while the total non-current assets are 79.45%. In the P 193,
487-M current assets, 10.25% is the cash and cash equivalents of the
corporation. While, in the P 748,276-M non-current assets, 77.55% is the
investments and advances of the corporation. In year 2021, SMC has a total
liabilities and equity of P 941,763-M equaled to the total assets. The total
liabilities of the corporation in 2021 are equivalent to 38.95% of the total
liabilities and equity amounting to P 366,802 -M. In the other hand, the
total shareholder’s equity of 2021 is P 574,961-M or 61.05% of the total
liabilities and equity of the corporation. The vertical analysis in the
statement of income of the corporation displays that out of the P 20,362
-M revenues, 8 4 . 2 0 % is the total expenses resulting to 1 5 . 8 0 % ( P 3 , 2 1 7
- M ) operating income and P 1,194-M or 5.86% net income or income
after tax. In the statement of changes in equity, the total shareholder’s
equity as December 31, 2021 amounts to P 574,961-M. Out of the total
equity of the year, P 618,880-M is the shareholder’s equity at the
beginning of the year, and 0.31% is the total comprehensive income and a
total of - 1.99% deductions. Lastly, in the statement of cash flows of the
corporation, out of the P 96,509-M cash and cash equivalents at the end
of the year, 4.24% is the net cash flow provided by operating activities, -
55.65% from investing activities, and 5.95% is the net cash flow
provided by financing activities of the corporation.

The horizontal analysis of San Miguel Corporation portrays that there

are 1.87% increase in the total assets, liabilities, and shareholder’s equity of
the year 2021. However, there is a decrease in the cash and cash
equivalents of the corporation with 28.61%, an increase of the total
liabilities with 20.03%, and decrease in the total shareholder’s equity of
7.10%. In addition, the net income of the corporation decreased with
82.84% and the total comprehensive income also decreased with 73.31%.
Meanwhile, the cash and cash equivalents at the end of the year decreased
with 28.94%, from P 135,816- M in 2020 down to P 96,509-M in 2021.

The SMC continuously perform and operate inside their businesses for
over 130 years and undeniably became one of the biggest companies that
contribute high percentages to the Philippine economy. The liquidity of the
corporation is in positive terms because of large amounts of the current
assets which are five times than the current liabilities. The company is more
than capable of paying their maturing obligations and portions of long-term
debts. SMC is a diversified conglomerate which demonstrates their multiple
source of income. They acquire high costs and expenses due to their huge
coverage; however, they gain higher net income in return, this shows the
profitability of the San Miguel Corporation. The debt ratio of the corporation
as of 2021 is lesser than 50% and its equity ratio is 61.05% higher with a
0.64% debt to equity ratio resulting to the solvency and stability of the
company. The Du Pont Equation also shows that in every peso of investment
in the company will accumulate 0.56% return on investment.

San Miguel Corporation established a high end company profile that

attracts potential stock investors inside the market. SMC has large
investments annually and never fail to generate profits. The San Miguel
Foods, San Miguel Brewery Inc, Ginebra San Miguel Inc, San Miguel
Properties Inc, SMC Infrastructure, San Miguel Yamamura Packaging
Corporation, Petron Corporation, and SMC Global Power are now all in large
scales in the market in terms of profit.

Nonetheless, the San Miguel Corporation should continue to diversify

into industries and continue to formulate strategic plans for the
continuation of the business in the future. Expansion of channel
distribution is also important since SMC is already operating internationally,
it is better to become more accessible in different nations. In addition , the
continuations of investments of the company to other leading positions of
developed businesses in the market are helpful for further expansions.
Lastly, the adaptation of global market practices and movements will be
beneficial for SMC. The San Miguel Corporation should now operate in a
globalized environment and markets and they should now begin to develop
its trademark, locally and globally for the better.

VI. REFERENCES
o San Miguel Corporation Official Website “sanmiguel.com.ph”

o 2021 San Miguel Corporation Parent Audited

Financial Statements (Apr 25, 2022)

o SMC-SEC-FORM 17 A PARTI, II, AND III - Final