FEU & CEU Financial Statement Analysis

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Executive Summary Horizontal Analysis Vertical Analysis Ratio Analysis Conclusions/Recommendations Public Perception and Recent Results

OVERVIEW
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EXECUTIVE SUMMARY
FEU Official name CEU CENTRO ESCOLAR UNIVERSITY

FAR EASTERN UNIVERSITY, INCORPORATED

Location
Internet address Stock Symbol

Sampaloc, Manila
http://investors.feu.edu. ph FEU

San Miguel, Manila

http://www.ceu.edu.ph CEU

Fiscal Year end

Date of SEC filing Independent auditor

MARCH 31, 2011

JULY 13, 2011 Punongbayan & Araullo
Education courses

MARCH 31, 2011

Sycip, Gorres Velayo

Primary services

Education courses

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HORIZONTAL ANALYSIS
112 110 108 106

REVENUE 2009 FEU CEU 100.00% 100.00% 2010 103.23% 102.24% 2011 109.81% 105.28%

104
FEU 102 100 98 96 94 2011 2010 2009 CEU

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HORIZONTAL ANALYSIS
120

OPERATING PROFIT 2009 2010 2011

100

80

60

FEU CEU

FEU

100.00%

102.38%
103.83%

105.57%
40

CEU 100.00%

72.44%

20

0 2011 2010 2009

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HORIZONTAL ANALYSIS
140 120

NET INCOME
100

2009 FEU CEU 100.00% 100.00%

2010 127.64% 103.61%

2011
80 FEU

108.34% 72.21%

60

CEU

40

20

0 2011 2010 2009

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HORIZONTAL ANALYSIS
120 100

NET CASH FROM OPERATING ACTIVITIES

80

2009 FEU CEU 100.00% 100.00%

2010 88.47% 100.62%

2011
60 FEU CEU

109.04% 99.97%

40

20

0 2011 2010 2009

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HORIZONTAL ANALYSIS
108 106

ASSETS
104

2010

2011
102 FEU CEU

FEU

100.00%

106.10%
100

CEU

100.00%

99.44%

98

96 2011 2010

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VERTICAL ANALYSIS
INCOME STATEMENT 2011 FEU CEU 100.00 100.00 % % N/A N/A 69.33% 83.84% 5.33% 0.74% 35.10% 14.49%

REVENUE

COGS OPERATING EXPENSES INCOME TAX EXPENSE NET INCOME

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VERTICAL ANALYSIS
BALANCE SHEET

2011
Current Assets Property, Plant and Equipment All Other Assets TOTAL ASSETS Current Liabilities Non-current Liabilities Total Liabilities Stockholder's Equity FEU 50.34% 34.59% 15.07% 100.00% 10.17% 0.38% 10.56% 89.44% CEU 92.00% 90.78% 2.00% 100.00% 9.13% 14.89% 24.02% 75.98%
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VERTICAL ANALYSIS
Product or Service Cost Control Operating Cost Control Debt Servicing Tax burden Profitability

RATIO ANALYSIS
CATEGORY: Short- Term Liquidity RATIO Current ratio Quick Ratio Working Capital Cash ratio FEU 4.95 4.55 1,892,685,538.00 0.18 CEU 1.01 0.95 2,087,861.00 0.88

Cash Flow ratio

2.18

2.31

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RATIO ANALYSIS
SOLVENCY RATIO Debt ratio Financial Leverage ratio Financial leverage index FEU 0.11 1.12 1.14 CEU 0.24 1.32 1.32

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RATIO ANALYSIS
ACTIVITY FEU Accounts Receivable ratio 3.63 CEU 4.93

Current Asset Turnover Ratio

Fixed Assets Turnover ratio Total assets turnover ratio Current liabilities turnover

0.79
0.80 0.40 3.92

4.64
0.47 0.43 4.67

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RATIO ANALYSIS
PROFITABILITY FEU CEU

Operating margin
Profit margin on sales Basic earning power ratio (BEP) Earnings per share Book value per share Operating cash flow to income Return on Total Assets (ROA) Return on Common Equity (ROE)

0.31
0.35 0.35 65.23 429.64 0.95 0.14 0.16

0.18
0.14 0.07 0.53 6.57 1.72 0.06 0.08

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RATIO ANALYSIS
MARKET
FEU Price Earning (P/E) ratio 15.27 CEU 16.46

Earnings yield Dividend yield

Market /Book ratio

0.07 0.04
2.33

0.06 0.75
1.34

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CONCLUSION & RECOMMENDATION

What are the overall strengths and weaknesses of each corporation? FEU has a favorable economic and industry outlook; firm well-positioned geographically whereby it is situated in the University Belt. FEU can effectively compete with these institutions of learning because of its well-modulated tuition fees subject to government regulations, air conditioned classrooms, electronic library and continuous improvement of physical plants and facilities; Substantial sales growth, partially resulting from market expansion.
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CONCLUSION & RECOMMENDATION

CEUs weaknesses are inefficiency in controlling costs related to income compare to FEU whom able to generate high income and yet maintain low percentage of costs. Unlike the latter, CEU has weak tendency to meet currently maturing obligations, and FEU gives high value to the institution and high rate of return to its stockholders compare to CEU.

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CONCLUSION & RECOMMENDATION

What recommendation would you make to current and potential private or organizational investors in the two corporations? I would recommend to potential investors to invest in Far Eastern University for there a high rate of return to stockholders and high value of the company and also the same is more profitable.

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CONCLUSION & RECOMMENDATION

What recommendation would you make to lenders regarding the credit-worthiness of the corporations? In terms of credit worthiness, I would recommend to lenders that there is more assurance that FEU is more liquid and solvent plus the fact that the same is more profitable than CEU
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PUBLIC PERCEPTION & RECENT RESULTS

What is the general sentiment toward each company? The public believed that FEU was committed in its vision and mission of striving to produce principled and competent graduates as evidenced by the performance of its graduates in their respective Board exams which is generally better than the national passing rate as indicated in its annual report. As a result, the university was able to open other branch in the country.
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PUBLIC PERCEPTION & RECENT RESULTS

The general sentiment regarding Centro Escolar University is that in the viewpoint of the students wherein they complaint about the facilities of the school and other issues, and because of this the students are looking forward to transfer from other university and that would affect the performance of the institution for it will be a loss for them and this would trigger lack of confidence of future students and so as the other users.
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PUBLIC PERCEPTION & RECENT RESULTS

How does the financial industry currently perceive each company? FEU was stable as it was able to maintain its financial stability which the main sources are its tuition and other fees which are moderate, subject to government regulation. In addition, it also provides full and partial scholarships to deserving students. In addition, it is one of the top three insurance providers in Canada.
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PUBLIC PERCEPTION & RECENT RESULTS

How has public perception positively or negatively affected the companies? Public perception could affect the institution in a negative manner when issue arises, such as unwanted policies and procedures, poor facilities and etc. would greatly affect the performance and standing of the company and so as the value of the institution, this could trigger future investor to decline future engagement in the company and many more, but this could be taken in an affirmative manner whereas, the institution would take this as a stepping stone for a change for the better, if they would consider to do so. A positive public perception will aid the company gain more enrollees, thus higher income.

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PUBLIC PERCEPTION & RECENT RESULTS

What, if anything, has the company done to counter any negative sentiment that may exist? The company may use corporate social responsibility to embrace responsibility for the company's actions and encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered as stakeholders. If the company has CSR initiatives the employees are more proud of and committed to the organization. This will result to favorable outcome, thus improving in rendering service.

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PUBLIC PERCEPTION & RECENT RESULTS

Would you change any of your conclusions or recommendations from the previous section based on current financial information? We still believe that FEU is more advantageous than CEU based on the preceding discussion.

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THANK YOU. . . God bless!!

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