Final Defense Script

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The ROE ratios during these years were unstable considering the large difference between the highest and lowest reported ROE. Again, it is fluctuating. The sudden decrease in the last quarter of 2012 is due to the reduction of net income and the total shareholders’ equity’s inability to offset that decrease. Despite this, San Miguel Corporation gain a rightful amount of net income which resulted to a swift increase of 9.16% on the same quarter of the following year.

Because total assets are partially financed with debt and partially by equity funds, this is an inclusive way of measuring earning power that ignores specific sources of financing. Just like the event that affects the ROE, it also affects the ROA.

EPS. The drastic movement can be attributed to the increase and decrease in equity on net earnings of the associate. The eps in 2013 was pulled down by the high maintenance cost of PAL and Air Philippines Corporation. However the last quarter of 2013 reported the highest eps of 13 pesos.

Financial leverage.

As for the Debt to equity. the lowest ratio of 1.57 , which also signifies an increase in the denominator, is due to the Corporation’s investment in the oil refining and marketing business in Malaysia which resulted to an increase in the corporation’s equity.

Debt to Asset. Again this is the portion of debt to the total assets. In general the debt to asset ratio of smc exhibited a minimal movement that it can be consider as stable. .

It can be inferred that the times interest earned ratio of SMC exhibited an upward trend. Most of the ratios computed using the data from 2011 to 2012 resulted to a ratio of more than 2.0