GMA NETWORK INC.
GMA NETWORK INC.
GMA NETWORK INC.
GMA NETWORK INC.
FINANCIAL ANALYSIS
PROFITABILITY RATIO (ROE & ROA)
PROFITABILITY 2023 2022 2021
RATIO
ROE 21% 36% 55%
ROA 12% 22% 32%
Analysis:
The company's financial ratios show a concerning trend with a significant decline in both Return
on Equity (ROE) from 55% in 2021 to 21% in 2023 and Return on Assets (ROA) from 32% in
2021 to 12% in 2023. This indicates that there is a decreasing profitability and efficiency in asset
utilization. This continuous downward trend suggests weakened financial health and operational
inefficiency, necessitating strategic interventions.
LIQUIDITY RATIO (CURRENT AND QUICK RATIO)
LIQUIDITY 2023 2022 2021
RATIO
Current Ratio 2.09% 3.07% 3.18%
Quick Ratio 2.3% 3.45% 3.42%
Analysis:
The company's liquidity ratios have shown a declining trend over the past three years, with the
current ratio decreasing from 3.18% in 2021 to 2.09% in 2023, and the quick ratio dropping from
3.42% in 2021 to 2.3% in 2023. This suggests a weakening liquidity position, indicating that the
company's ability to meet short-term obligations has diminished. A strength is that both ratios
remain above 1, implying that the company still has more current assets than current liabilities.
However, the declining trend is a weakness, highlighting potential challenges in maintaining
liquidity and potentially indicating issues with cash flow management.
LEVERAGE RATIOS (DEBT-TO-EQUITY-RATIO)
LEVERAGE 2023 2022 2021
RATIO
DEBT-TO-
0.1% 0% 0.05%
EQUITY-RATIO
Analysis:
The company's debt-to-equity ratio has remained exceptionally low over the past three years,
showing a slight increase from 0.05% in 2021 to 0.1% in 2023, with 2022 maintaining at 0%.
This indicates a strength in having minimal reliance on debt financing, suggesting a strong equity
base and low financial risk from debt obligations. However, a weakness is the very low debt
levels might also imply missed opportunities for leveraging debt to fuel growth, particularly if
the cost of equity is higher than the cost of debt.
EFFICIENCY RATIO (INVENTRORY TURNOVER AND RECEIVABLE TURNOVER)
LIQUIDITY 2023 2022 2021
RATIO
Inventory Turnover 0.26 0.21 0.37
Receivable 2.97 3.68 2.88
Turnover
Analysis:
The efficiency ratios highlight important trends in inventory and receivable turnover from 2021
to 2023. Inventory turnover decreased from 0.37 in 2021 to 0.21 in 2022, with a slight increase
to 0.26 in 2023, indicating a slowdown in how quickly inventory is being sold and replenished,
which could point to issues like declining sales efficiency or overstocking. In contrast, receivable
turnover improved from 2.88 in 2021 to 3.68 in 2022, and dropping to 2.97 in 2023. The
improvement in 2022 suggests better collection practices or faster customer payments, although
the decline in 2023 may indicate a slight weakening in these areas. Overall, the company has
GMA NETWORK INC.
shown strength in managing receivables and weakness in its inventory management that may
boost operational efficiency.
SWOT ANALYSIS
STRENGTH WEAKNESSES
Established Brand Dependence on Advertising Revenue
GMA Network, Inc. has a well-established brand GMA Network, Inc. relies heavily on
with a strong presence in the Philippine media advertising revenue, which can be affected by
landscape, which helps maintain a loyal viewer economic downturns or changes in consumer
base. behavior.
Relationship with Audiences
The company has built a significant connection Competition from Digital Media
with its audiences, various community outreach The rise of digital media platforms has
programs, which helps build trust and loyalty. increased competition for GMA Network, Inc.,
Diverse Programming as viewers and advertisers increasingly turn to
The company offers a wide range of programming, online platforms for content and advertising.
including news, entertainment, various genres,
including dramas and educational content, which Limited Global Reach
appeals to a broad audience. The company's presence is mainly limited to the
Personalized Content Philippines, which restricts its ability to expand
The company produces content that is tailored to globally and diversify its revenue streams.
the needs and preferences of its audience, which
helps maintain viewer engagement. Limited Diversification
Strong News Coverage The company's revenue streams are primarily
GMA Network, Inc. is known for its dependent on television and radio
comprehensive and unbiased news coverage, broadcasting, which can make it vulnerable to
which helps maintain a loyal audience base. changes in consumer behavior and
Strategic Partnerships technological advancements.
The company has formed strategic partnerships
with other media organizations and brands,
enhancing its reach and influence.
Global Distribution
The company's programs are distributed globally
through various channels, including satellite and
cable television.
OPPORTUNITIES THREATS
Growing Demand for Digital Content Competition from Other Media Companies
The increasing demand for digital content presents GMA Network, Inc. faces intense competition
an opportunity for GMA Network, Inc. to expand from other media companies, including ABS-
its offerings and reach a wider audience. CBN and TV5, which can affect its market
share and revenue.
Expansion into New Markets
The company can explore opportunities to expand Regulatory Changes
into new markets, both domestically and Changes in regulatory policies or laws can
internationally, to diversify its revenue streams. impact the company's operations, such as
changes to broadcasting regulations or taxation.
Partnerships and Collaborations
GMA Network, Inc. can form partnerships and Economic Downturns
collaborations with other media companies, Economic downturns can affect the company's
content providers, or technology firms to enhance advertising revenue and overall performance.
its offerings and stay competitive.
Technological Disruption
Innovative Content and Format Rapid technological advancements can disrupt
The company can invest in innovative content and the media industry, making it essential for GMA
formats to attract and retain viewers, as well as Network, Inc. to adapt and innovate to stay
stay ahead of the competition. competitive.
GMA NETWORK INC.
VALUATION AND INVESTMENT RECOMMENDATION
VALUATION 2023 2022 2021
Discounted cash
flow
VALUATION 2023 2022 2021
Price to earnings 12.89% 10.03% 8.49%
VALUATION 2023 2022 2021
Price to Book
