University of Santo Tomas

College of Commerce and

Business Administration
Financial Management Area

VALUATION
OF

AG FINANCE,
INCORPORATED
4FM3
GULAPA, Patricia Ann
HOW, Janine
Wang, Rui

COMPANY DESCRIPTION
The AG Finance, Inc. is a micro-finance company that caters to workers here and abroad.
The company started its roots in 2001 by providing Salary Loans to permanent rank and file
employees of reputable companies in the Philippines. With over a decade of experience in the
overseas market, the company has grown to be a well-known player in OFW Financing industry.
It is committed to bring Filipinos a little bit closer to the world and in making the Philippines a
bigger part of the globe through dedication and service to our fellow kababayans' here and
abroad.
Local client companies are able to free themselves from the administrative and capital costs of
processing and handling employee loans by availing their services. They are able to focus their
funds and resources to their core business.
In 2003, the company saw a great demand in the deployment of Overseas Filipino Workers
(OFWs). The Company expanded its market coverage to Filipinos aspiring to provide a better life
for their families by dedicatedly working abroad. The OFWs need to invest in their families' future.
The company offers access to immediate funds for pre-deployment and relocation expenses to
migrating professionals through our OFW Financing Program.

Products and Services

The company offers a range of non-collateralized loans which can be used for various financing
needs. The loan products are extremely personalized with variable interest rates, terms and fees,
as well as minimal application requirements.

STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months

For the Years

Ended March 31

Ended December 31

2013

2012

2010

2011

2012

Forecast

2013

2014

2015

2016

2017

(unaudited)
Interest income

37,297,687 15,657,569 37,797,983 76,033,193 82,453,952

less:Interest expense

872,690

Net interest income

36,424,997 15,229,270 35,818,643 70,484,824 78,555,010

less: Impairment loss

9,973,690 1,329,628 2,662,384

Net interest income after

impairment loss

26,451,307 13,899,642 33,156,259 67,058,315 73,236,498

Other operating income

5,258,079 2,992,878 6,605,085

428,299

1,979,340

5,548,369

3,426,509

3,898,942

5,318,512

12,904,907 16,542,601

Other operating expenses 9,299,224 6,589,121 18,050,512 22,380,171 28,083,417

Profit before tax

22,410,162 10,303,399 21,710,832 57,583,051 61,695,682

Tax expense

6,723,025 3,091,002 6,517,498

Net Profit

15,687,137 7,212,397 15,193,334 40,264,329 43,187,046

17,318,722 18,508,636

2.650131235 1.072588246 1.685971415

ROE

0.182219961

DPO

1.518974046

gg

0.518974046

0.09456743

163500000

0.495790684

42,483,267.58

64,339,478.93 60,855,846.73 54,996,187.92 59,938,261.94

1,741,197.02 2,674,101.48
40,578,075.84

28,192,285.48

2,530,067.87

3,148,339.19

3,329,291.25

3,230,247.53

43,067,779.94 37,158,008.94 38,596,513.17 39,529,167.14

7,399,981.62 8,576,063.28
14,737,214.79

2,304,417.20

46,791,331.01 40,818,338.76 42,635,437.60 43,344,149.26

3,645,018.58 3,215,689.49

35,928,517.37

2,628,194.64

7,483,975.26

7,802,198.35

7,941,071.43

18,124,085.95 16,893,527.79 16,524,587.44 17,167,314.49

32,786,908.93 27,174,970.12 29,286,441.92 29,660,517.24

8,463,052.50 9,848,602.16

8,159,449.24

8,794,020.86

8,907,195.34

72,812,125.05 122,759,161.50 206,968,437.21 348,942,868.93 588,307,702.46

STATEMENTS OF FINANCIAL POSITION

Amounts in
As of March 31

As of December 31

2013 2010

2011

Forecast

2012

2013

2014

2015

2016

2017

90,428,846

17,566,145.31 21,123,536.62 32,253,983.83 22,874,002.05 24,978,367.47

Assets
Cash

39,826,463 10,101,968 5,933,575

Loans receivable- net

280,905,498

128,465,905 149,995,293 240,309,956

Property and
equipment- net

14,090,852

11,065,100 15,457,460 14,213,086

13,446,026.19 14,348,510.59 13,996,831.03 13,925,479.72 14,089,067.05

Other assets-net

8,929,999

2,630,892

4,765,638.46

Total Assets

343,752,812

152,263,865 178,244,952 350,950,120

75,000,000

6,858,624

5,998,232

166,678,311.30 181,792,583.74

5,809,344.28

211,975,903.33 236,691,707.70

193,824,648.90

5,496,553.87
260,158,674.37

180,421,415.85 185,249,801.61

5,338,831.72

5,544,826.29

235,452,126.00 243,841,707.09

Liabilities and Equity

Loans payable

87,050,024 25,000,000 100,000,000

60,150,092.74 53,177,196.38 68,389,156.30 60,253,599.25 60,288,140.99

Accrued expenses and

6,328,972
other payables

6,550,669

5,790,772

6,598,010

6,301,999.49

6,221,225.35

6,371,706.39

6,298,010.07

6,296,680.82

Income tax payable

9,731,680

3,259,524

6,786,203

7,347,087

5,457,143.88

6,479,912.54

6,380,919.18

6,087,971.31

6,314,054.53

Total Liabilities

91,060,652

96,860,217 37,576,975 113,945,097

74,574,033.24 68,349,450.93 83,433,302.59 75,200,494.94 75,410,482.80

Capital stock

193,750,002

30,000,000 75,000,000 75,000,000

55,260,472.48 67,740,080.26 65,479,776.45 62,582,921.00 65,233,333.92

Deposits for future

stock subscription

- 53,150,000

53,150,000.00 53,150,000.00 53,150,000.00 53,150,000.00 53,150,000.00

Stock dividends
distributable

65,600,002

65,600,002.00 65,600,002.00 65,600,002.00 65,600,002.00 65,600,002.00

Retained earnings

58,942,158 25,403,648 65,667,977 43,255,021

41,632,141.44 49,083,965.06 44,545,274.41 44,983,855.53 46,160,019.57

TotalEquity

252,692,160 55,403,648 140,667,977 237,005,023

Total Liabilities and

Equity

343,752,812 152,263,865 178,244,952 350,950,120

Current Assets
Outstanding shares

75,000,000

Current
Liabilities

122,695,994.33 159,929,185.54
211,975,903.33 179,184,399.04

198,529,877.14 222,343,197.11

237,106,810.27

246,161,843.34

148,509,570.95 158,268,977.41
208,054,400.45 206,763,421.14

221,526,646.29 229,752,640.05

14,423,940.50 15,172,254.54 15,044,146.29 14,946,895.69 15,122,341.81

166,539,791.32 186,047,405.94

Change

166,918,787.04

19,507,614.62 12,816,307.28

198,863,713.22
(15,157,964.68)

183,705,748.55 189,651,930.76
5,946,182.21

2013

2014

2015

2016

FCFE 52,558,038.61 108,469,224.16 221,627,885.85 342,089,730.80

1.495790684

2.237389771 3.346666776

5.005912986

35,137,295.06 48,480,253.90 66,223,469.71 68,337,130.85

SUM 218,178,149.52
75,000,000
Price 2.91
RECOMMENDATION:
Indifferent.
The price 2.18 versuss intrinsic value of 2.91 is very close.
The intrinsic value computed is only a few cents higher than the current value.