Ayala Land Corporate Report: Financial and Strategic Analysis

This corporate report provides an in-depth analysis of Ayala Land, a prominent real estate company. It begins with an executive summary and introduction, followed by an examination of the company's financial and stock market performance over five years, highlighting its increasing sales and competitive advantage. A detailed SWOT analysis identifies the company's strengths, weaknesses, opportunities, and threats, focusing on corporate governance and strategic issues. The report then delves into Ayala Land's capital structure, its debt levels, and the estimation of its cost of capital and economic value added, projecting future trends. Finally, it justifies the success of Ayala Land's real estate business based on its financial performance, concluding with a summary and a list of references including books and journals.

A Corporate Report

Table of Contents
INTRODUCTION...........................................................................................................................1
a) Financial and stock market performance of Ayala Land...................................................1
b) SWOT Analysis of Ayala Land with some strategic issues...............................................2
c) Capital structure of Ayala Land.........................................................................................3
d) Estimation of cost of capital and economic value added...................................................4
e) Justification of success of real estate business of Ayala Land...........................................4
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

Executive Summary
The corporate report of a company includes entire discussion about current and previous
financial performance of business. It covers issues which becomes weaknesses further for a
business and strategies that build strengths as well. As this report is based on Ayala Land that
deals in real estate business. Due to high commitment of run business in ethical manner and
concern on benefits of its shareholders, respective company has gained strong financial
performance as well.

INTRODUCTION
Real estate business includes both residential and commercial land, properties and assets
which are sold or bought on different-different rates. In UK, business under this sector are
increasing at faster rate, where agents and brokers help renters, sellers, buyers and financial
companies, by providing loans (Molnar, 2018). This report includes financial and stock market
performance of a real estate company, named by Ayala Land. It is one of the leading brand of
real estate business within Philippines. Here, key strategic business dimensions of this company
are described through SWOT analysis. Furthermore, capital structure of this firm is evaluated to
determine target debt ratio, with an estimation of its cost of capital and economic value.
a) Financial and stock market performance of Ayala Land
Through last five financial years of Ayala Land as shown in below graph, it has evaluated
that in 2015 after income earned after tax was near about 117.63 billion (Wong, 2017). It was
19% hiked as per estimation from preceding year. Therefore, it has analysed that its sales
performance is increasing at higher rate.
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As per comparison with its competitors like SM Prime, Me Garworld and Robinsons
Land, it has evaluated that Ayala Land covers larger market share and gain high competitive
advantage over them.
b) SWOT Analysis of Ayala Land with some strategic issues
Corporate governance of Ayala Land is shown by its commitment to run business on strict
rules and principles. It also concerns on sustaining the trust and confidence of its stakeholders by
enhancing value of shareholders. For this purpose, it focuses more on bringing full compliance
with certain code of corporate governance (Miller and Jentz, 2017). It includes Philippines Stock
of Exchange, Philippines Dealing Exchange and Security Commission Exchange. Therefore,
internal capabilities of business of ALI can be determined by:-
Strengths: Ayala is one of the best retail estate corporation in Philippines that carries out its
business under residential and commercial development. Its increasing growth strategy shows its
main strengthening point in corporate world.
Weakness: It doesn’t have a direct access towards its client consolidate information. Along with
this, Ayala fails to develop effective strategies to address environmental issues shown its major
weakness.
Opportunity: Increasing migration rate of people give opportunity to this company to cater their
needs by providing better house facilities.
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Threat: Increasing competition in real estate business and hold interest of investors for longer
period towards its project, create difficulties for this company.
c) Capital structure of Ayala Land
Ayala Land mainly engages within development of real estate properties by operating
business into: Corporate Businesses, Shopping Centers, Construction, Residential and Property
Developments, etc. Through capital structure of this company it has analysed that business of
this company is consistently rising from last five year decades. Its amount of debt outstanding in
2015 was near about 105 billion Peso (Rouanet and Halbert, 2016). While through evaluating
the Interest Expense to Operating Income percentage, it has analysed that Ayala Land
followed a fiercely competitive industry. For this purpose, it requires an adequate amount of
capital expenditures in order to remain afloat within real estate industry, so they go into debt.
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d) Estimation of cost of capital and economic value added
Through this figure, it has estimated that cost of capital within upcoming year i.e. in 2019
will raise to more than 32% (Kalu, Buang and Aliagha, 2016). This would aid high value in
profitability which proves fruitful for further investment in big projects of construction.
e) Justification of success of real estate business of Ayala Land
Through last financial performance of Ayala Land Corporation in terms of Net Income to
Total Revenue, it has evaluated that its business is in the right spot for a fairly good investment.
If in upcoming years, sales performance of ALI will reflect a percentage of more than 20%, then
it would prove to gain high success within real estate business.
CONCLUSION
Through this essay, it has concluded that to run business in real estate sector, a company has
to give high commitment to follow strict rules and code of ethics. This would help in getting
loyalty of stakeholders and enhancing values of shareholders, to achieve high performances.
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REFERENCES
Books and Journals
Kalu, J. U., Buang, A. and Aliagha, G. U., 2016. Determinants of voluntary carbon disclosure in
the corporate real estate sector of Malaysia. Journal of environmental management. 182.
pp.519-524.
Miller, R. L. and Jentz, G. A., 2017. Business law today: The essentials. Cengage learning.
Wong, A., 2017. Transnational real estate in Australia: new Chinese diaspora, media
representation and urban transformation in Sydney's Chinatown. International Journal
of Housing Policy. 17(1). pp.97-119.
Molnar, A., 2018. Giving kids the business: The commercialization of America's schools.
Routledge.
Rouanet, H. and Halbert, L., 2016. Leveraging finance capital: Urban change and self-
empowerment of real estate developers in India. Urban Studies. 53(7). pp.1401-1423.
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