JOLLIBEE FOODS CORPORATION (JFC)
A Written Analysis of a Case by Lloyd Ty
Brief Synopsis of Data
In 1995, AB Capital and Investment Corporation was tapped by the UP Foundation, Inc. (UPFI) to manage an equity fund of 2.5 million pesos, which is a small portion of their 260 million peso endowment fund. The interests earned from the fund, which is used to support the professorial chair requirements of the University, has dropped due to a decline in the returns of treasury bills - that being the bulk of UPFI's investments. In response to this, the investment committee of UPFI has proposed that some portion of the fund be invested in the Philippine stock market, which was observed to have experienced an increase of more than 150 percent in 1993. In line with this, Patricia Tan of AB Capital was tasked to design a portfolio for the fund in which she plans to include mostly "blue chips" and other sound "second liners", thereby taking into consideration UPFI's conservative stance.
So far, Patricia Tan has come up with an analysis of the various stocks included in the portfolio as preparation for a possible inquiry from the investment committee on the fund's performance.
In the same year, Peter So was hired by AB Capital and Investment Corporation and assigned to handle the remaining companies which have not yet been analyzed by Patricia Tan. These companies include Jollibee Foods Corporation (JFC), Ayala Land, Inc. (ALI), and Philippine Long Distance Telephone Company (PLDT). As of late, Peter has already submitted a report which included an analysis of the companies' respective industries and a description of the companies' operations, management and business prospects. Peter So was also able to perform financial ratio analyses on the three companies. However, Patricia Tan thought that a cash flow...