BreadTalk

Interpretation of Financial
Statements

Name: Chee Jia Lih

Student no.: 10661365
Lecturer: Mr. Frederick Cabanes
Presentation Date: 8th March 2019
Horizontal Analysis: Balance Sheet
2015 2016 2017 Change from Percent • N.C.A consist of higher % of investment properties by
($’000) ($’000) ($’000) 2016 to 2017 71.7% in 2017
24,053 22,984 39,463 16,479 71.7% • Because Breadtalk has purchased, construct or develop
new investment properties i.e. office space in Shanghai
Investment Properties (Pg. 62, 66, 104, 148)
• It also has 29% interest in Chijmes, an investment
property held through an associate, Perennial (Chijmes)
Pte Ltd
• Caused the C.L ↑ by 18.9% - short-term loans & current-
portion of long-term loans have significant ↑ about
166.6% & 56.2%
Investment Properties
50000000
• Generally, properties can’t be converted into cash quickly.
39463000 Rather, the real value lies in its ability to productively
40000000 serve the company
30000000 24053000 • In conclusion, Breadtalk chose to invest that cash back
20000000 into its business to enhance its future profit potential
22984000
10000000

0
2015 2016 2017
Ratio Analysis: Profitability
- Show how well a company can generate profits from its operations
2015 2016 2017 Change from Industry • Increasing from 2015 to 2017
2016 to 2017 Standard
• Higher ratio in 2017 as compared to previous year and it
6.57% 7.81% 14.38% 6.57% 13.52% was above the industry ratio

Return on owners’ equity (Pg. 65 & 66)
𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡/𝐼𝑛𝑐𝑜𝑚𝑒
𝑂𝑝𝑒𝑛𝑖𝑛𝑔 𝑆𝑡𝑜𝑐𝑘ℎ𝑜𝑙𝑑𝑒𝑟𝑠 ′ 𝐸𝑞𝑢𝑖𝑡𝑦
• High return on equity ratio indicated that Breadtalk has
utilised its investors’ funds in favourable manner as it
knows how to reinvest its earnings wisely, so as to
increase productivity and profits
• Breadtalk may satisfactory for investors to invest
• Increase due to increase in net income compare to
shareholder’s equity
• Therefore, it’s a good sign for Breadtalk as ability to
maintain a positive earnings trend and able for seeking
new investors

$21,848,000
= 0.1438 or 14.38% (2017)
$151,945,000
Ratio Analysis: Market Prospects
-To determine company’s potential future performance
2015 2016 2017 Change from Industry • Increasing from 2015 to 2017
2016 to 2017 Standard • Its ratios were below the industry standard
13% 24% 51% 27% 94% • It means an investor would earn 51% on his/her
investment in the form of dividends
Dividend Yield (Pg. 69 & 135) • Usually, the old and well established companies are in
better position to pay a higher % to the shareholders as
compared to new ones
• Breadtalk was paying a huge amount of dividend in 2017
• Yearly market per share was constant but dividend
increased over the years
• Investors take into account while purchasing the shares of
a company by looking at the DY
• Breadtalk was enough to satisfy investors as they were
𝐴𝑛𝑛𝑢𝑎𝑙 𝐶𝑎𝑠ℎ 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒 getting high yield from dividend
𝑀𝑎𝑟𝑘𝑒𝑡 𝑃𝑟𝑖𝑐𝑒 𝑃𝑒𝑟 𝑆ℎ𝑎𝑟𝑒
• Hence, Breadtalk is a reliable and less risky company for
investment
$16,881,000/281,893,238
= 0.51 or 51% (2017)
$33,303,000/281,893,238
References
• Breadtalk’s Financial Reports of 2014, 2015, 2016 & 2017