This website uses cookies to ensure you have the best experience. Learn more

Femsa Analysis

1929 words - 8 pages


The principal goal of this assignment is to understand the impact that the use of different set of generally accepted accounting principles (GAAP) in the Analysis of an international company’s financial statements. In this assignment we need to understand and analyze the impact of the Company FEMSA Annual Report with the two variables using on this report; Mexican pesos and U.S. Dollars.

FEMSA, the largest beverage company in Latin America, started operations in 1890. FEMSA work thru three important roots: Coca-Cola FEMSA, FEMSA Cerveza (Heiniken Mexico) and FEMSA Comercio. (See Figure 1.1.)
Figure 1.1 Participation of the operations of FEMSA

Coca-Cola FEMSA ...view middle of the document...

Now we are going to analyze the financial statements in terms in US dollars and Mexican pesos and see the impact or implications that this results represents.


In order to understand the differences between the financial numbers in terms of Mexican pesos and U.S. Dollars we need to compute ratios for the 2007 year Annual Report. The ratios to compute are the next ones:

* Current Ratio: [Current assets/Current liabilities]
* Inventory Turnover: [Cost of Goods Sold/Average Inventory]
* Profit Margin on Sales: [Net Income/Net Sales]
* Debt to Assets Ratio: [Total Liabilities/Total Assets]
* Book Value per Share: [Common Stockholders’ Equity/Outstanding Shares]

The results of these ratios are showed in the Figure 2.1

Figure 2.1 Ratios Annual Report 2007

As we can see, the variations of the ratios are minimum, in other words we can say that there are not impacts using dollars or pesos, to get the Ratios.


The current Ratio express in Dollars or in Mexican Pesos shows that the company has more assets than liabilities; this ratio is on line with the fact that FEMSA has the capacity to pay its obligations and that this company has more capacity to acquired more actives than to pay the liabilities.
To know the rotation of the inventory in a company we use the Inventory Turnover, which represents how many times a company´s inventory is sold and replaced over a period of time, in this case in the 2007. The result is 7.9 for this ratio, that means a high and strong capacity of sales. The cost of goods sold is higher than the average inventory, so the performance of the inventory rotation in FEMSA is good.

The Profit Margin of FEMSA is around 0.057 [5.7%] which means that for each dollar of sales, 5.7 cents goes to the net income. In other words is the portion of the sales that contribute with the income of FEMSA

The Debt to Assets ratio indicates the portion of the FEMSA´s assets which are financed by a debt. In this case the ratio is 0.49 [49%] it means that the financed of the assets come from the Equity.

Finally the Book Value per Share Ratio is 5.01 in Mexican pesos. The Book value per Share by definition indicates the amount of value for a shareholder would get if the company were to liquidate. In this case the 5.01 is a good variable because indicate that FEMSA is undervalued. In terms of bull or bear stock, this ratio represents a bull stock, which it means that the stock price is higher that the book value. The stock value of FEMSA is now 92.71 (10/Dic/2011).

Summary all the analysis of the ratios, we can consider FEMSA as a sustainable company which has a good inventory rotation as well as a good administration of the assets. That represents in a great performance and a rise of utilities in the last years.


Now that we obtained the ratios in terms of Mexican...

Other Papers Like Femsa Analysis

Final Project Pepsico vs Coca-Cola Essay

3246 words - 13 pages Stephanie Burke XACC/280 September 19, 2010 Sylvia White Shepherd The purpose for this analysis is to compare PepsiCo to Coca-Cola; this is done by providing a summary of financial accounting information. The information to compare a company to another comes from financial statements and then those numbers are broken down into analysis and ratios. Once the ratios are calculated then the investor can decipher is the company is worth

Coca Cola Strategy Essay

2943 words - 12 pages marketing, think and act like an integrated global enterprise, create competitive advantage by fulfilling their live positively commitments, and design and implement the most efficient and effective business system. Scope: Given the multi-brand strategy and how it changes depending on the geographic market, the present analysis will focus on Coca Cola’s core business (soft drinks) in Europe as it gathers the most interesting conditions and

Cola Wars Continue

4810 words - 20 pages Opportunities and Threats. SWOT analysis provides a useful vehicle to illustrate the importance of describing the external environment in clear and concise ways and the difficulty of identifying a good strategy.Internal AnalysisCoca-Cola has been a complex part of American culture for over a century. The product's image is loaded with over-romanticizing, and this is an image many people have taken deeply to heart. The Coca-Cola image is displayed on T-shirts

Freedom And Responsibility

2141 words - 9 pages Built within the Constitution of the United States are specifically defined freedoms that are guaranteed to all citizens. Conversely, with every constitutional freedom there comes a corresponding responsibility. On September 25, 1789, the state legislature’s twelve proposed amendments were transmitted by congress, the first two dealing with congressional representation and congressional pay. The following numbers three through twelve were

Hate Crime Laws

2348 words - 10 pages On June 7, 1998, 49-year-old James Byrd Jr. of Texas accepted a ride from three white men, who then beat him severely, urinated on him, chained him by his ankles to the back of their pick-up truck, dragged him for three miles into the countryside, and dumped his corpse in front of an African-American cemetery (Graczyk). A little over a year later, a jury sentenced ring leader John King to death by lethal injection (“Man Executed for Dragging

Rational Emotional Behavior Therapy Case Study Conceptualization And Treatment Plan

2140 words - 9 pages Rational Emotional Behavior Therapy Case Study of Sarah: A Conceptualization and Treatment Plan Rational emotive behavior therapy, REBT, was developed by Albert Ellis and holds the central belief that the events in our lives do not cause our disturbances but that they are instead caused by our view of the events (Murdock, 2009). Murdock (2009) states that “people are seen as responsible for their behavior” (p. 279) but, because they are

Holidays In Albania

1636 words - 7 pages Have you ever thought about having exciting and incredibly cheap vacations? Albania might be the right choice. According to My Travel Guide, Albania is ranked the fourth among ten places worth visiting in Eastern Europe (“Top 10 Eastern European Destinations”). One can encounter three kinds of vacations in this Mediterranean country: winter, summer, and cultural. The ideal places to spend your winter vacations are the Albanian Alps. They are

A Heart Of Darkness

1748 words - 7 pages In this short story, there are frequent significant subject and ideas that make the story, "A Heart of Darkness," by Joseph Conrad, and haunting novel. The main theme is absolute white power over the natives. The theme validates the corruption, and the dependence caused by the white people as they took over the Congo. White men were giving all the power; they had no self-control, and in the end they did not use wisely. The white men became

The Aspects Of Vulnerability Among The Exploited In Medical Research

2287 words - 10 pages Essentially, everyone is in some state of vulnerability. However, some of us are more susceptible to harm due to our vulnerabilities. The susceptible are the individuals with the greatest risk. These individuals risk the loss of their autonomy, and maybe even their lives. Vulnerable populations can be found in every subset of society. However, as previously mentioned, there are some vulnerable populations that are at an even greater risk than

The Hitchhiker’S Guide To The Galaxy

1171 words - 5 pages The Hitchhiker’s Guide to the Galaxy As the human race makes life-changing discoveries, it is made apparent that there is always more to learn as the universe, instead of becoming familiar, is becoming absurd. The Hitchhiker’s Guide to the Galaxy, written by Douglas Adams, as well as the 2005 film adaption, portrays absurdity to be an all-encompassing system in the universe. Through the introduction and attempt to understand lack of reason, the

The Ford Motor Company Wage Increase Of 1914 And The Theory Of Incentives And Efficiency Wages

1252 words - 6 pages ‘It’s not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages’ (Henry Ford, cited in Johnson and Weinstein 2004, p. 2). When the Ford Motor Company announced that it would more than double the wages of its workers in January 1914 to a ‘five-dollar day’ minimum, was this a contradiction to Henry Ford’s statement? If customers are actually the ultimate payers of wages, then more than

Related Essays

Corana Beer Essay

4386 words - 18 pages including FEMSA who is the exclusive distributor of Coca-Cola products in Mexico and Central America. * The volatility of the Mexican economy including the devaluation of the Mexican peso. * Further consolidation by industry leaders will increase the market share by industry leaders. * We can draw from the SWOT analysis that Grupo Modelo is an attractive company. While it lacks in areas such as geographic coverage, it has

Organizational Behavior Essay

4691 words - 19 pages competition among companies. The merger and acquisition process of the Coca-Cola FEMSA were studied in this paper. The accomplishment of this field study was done from an exploratory research among the last-year business students, deep interviews and documental analysis. The result analysis was done according a methodology of cultural analysis, built on the following criteria: Market, Management and Competencies. Hence, research data confirm the

Corona Beer Essay

2482 words - 10 pages its growth and improve its competitive position. Environmental Analysis PEST Analysis Political Factor: * Government regulation prohibits to import alcohol product in some country. * Tax policies on alcohol beverages may result in higher price of alcohol product in some countries. Economic Factor * Trading agreement such as NAFTA, can help firm to benefit from exports its products into the emerging market, however this might also

Heineken Case Analysis

1724 words - 7 pages International Case Analysis – Heineken Ronald J. McIntosh MG 495 Strategic Management - Winter 2014 City University of Seattle Abstract Heineken begins it story as a company in 1864 when its founder, Gerard Adrian Heineken purchased a small