A Paper Submitted In Partial Fulfillment of the Requirements for the Course ACT515M (Problems in Financial Reporting)
MC REYNALD SIMBAJON BANDERLIPE II
Candidate for the degree of MASTER OF SCIENCE IN ACCOUNTANCY
Mr. WILFREDO BALTAZAR Professor
De La Salle University - Manila Term 2, SY 2006-2007
THE PROBLEM OF THE BEE: PROBLEMS IN FINANCIAL REPORTING OF JOLLIBEE FOODS CORPORATION’S 2005 FINANCIAL STATEMENTS
Mc Reynald S. Banderlipe II College of Business and Economics, De La Salle University
Company Background This paper aims to perform an analysis of the 2005 financial statements of Jollibee Foods Corporation. Before such presentation, this chapter intended to present some information about the company, and how Jollibee became the leading company in the Philippine fast food industry. After graduating with a degree in Chemical Engineering, Tony Tan Caktiong decided not to compete with fellow new yuppies at his time searching for jobs after graduation. Having gained first-hand experience in managing a family eatery in Davao during his childhood years, he decided to pursue a food business that would be simple to operate. Thus, he borrowed P200,000 from his father to commence a Magnolia ice cream franchise beside Coronet Theater in 1975. With his ingenuity and passion to satisfy the cravings of his customers, the idea of serving American foods such as hamburgers and fries that is quick, tasty and affordable (Acuna, Bernardo, Dy, Malabanan, and Young., 2004) became his vision that he never thought would be one of the entrepreneurial successes in the Philippines. In 1978, the vision became a reality when Tony and his family decided to incorporate and saw the birth of Jollibee Foods Corporation. One year after, the company posted P2 Million peso sales. It also marked the establishment of a first Jollibee franchise in Sta. Cruz, Manila and its first TV advertisement.
Jollibee entered the list of the Top 1000 Corporations in 1981. Since then, the company continues its unprecedented growth as it enters the Top 500 in 1984, the Top 250 in 1986, and Top 100 in 1987. Meanwhile, in 1983, JFC launched flagship motto of JFC, known as the “Langhap Sarap.” The year 1986 signaled the start of branching out in the international market by putting an international outlet in Taiwan and Brunei Darussalam. In 1989, the company posted very remarkable sales of P1.3 Billion, while expansion efforts continued when they acquired 73% share in the Hamburger segment of the fast food industry in 1991. Jollibee became a public corporation in July 14, 1993 with its initial offering of P9.00 per share. The expansion of JFC came when they acquired Greenwich Pizza Corporation in 1994 and Delifrance, a popular French patisserie shop, in 1995. This led to the increased variety of food items served by JFC. In 1996, the Far Eastern Economic Review cited Jollibee as one of the leading companies in Asia. At the end of the year, more and more Filipinos abroad trooped down to their Jollibee stores in Guam, the Middle East, and Hong Kong. In 1997, Jollibee opened another branch in Xiamen, China. A year after, the company marked its 300th store in Balagtas, Bulacan, together with an international branch in Daly City, California. The following years thereafter saw the P20 Billion sales and recognition of Jollibee as the Most Admired Company in the Philippines and third overall in Asia. Jollibee opened its 400th store in Intramuros, Manila, while sales continuously shoot up to the P27 Billion mark. In the same year, Jollibee opened its 500th store in Basilan, Isabela Province. At present, Jollibee continues to expand its network of stores,
after acquiring Chowking in 2000, an 85 percent share in Yonghe King in 2004, and Red Ribbon Bakeshop in 2005.
Table 1 Timetable of Selected Jollibee Products from the Years 1978 – 2005...