ng wei lins group fm assignment

7/25/2019 Ng Wei Lins Group FM Assignment

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SCHOOL OF ARCITECTURE, BUILDING AND DESIGN

BACHELOR OF QUANTITY SURVEYING (HONOURS)

FINANCIAL MANAGEMENT (QSB 3414)

GROUP WRITTEN ASSIGNMENT

Group Members:

Danielle Yoong Li Ping 0317206

Ng Wei Lin 0316302

Chung Hui Ping 0310592

Tan Jing Yi 0317479

Ian See Tze Onn 0311883

Chan Eu Weng 0311736


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FINANCIAL ANALYSIS HYB

HUA YANG BERHAD

Version 2016

2016, Huayang


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Table of Contents1. Background of the Company.......................................................................................................... 8

1.1Management Directory................................................................................................................ 8

1.2 Company Overview...................................................................................................................... 8

1.3 Company News............................................................................................................................. 8

1.2 Background and Development.................................................................................................... 9

1.3 Financial Performance................................................................................................................. 9

2. The principle activities of the company.......................................................................................... 10

2.1 Subsidiaries Company................................................................................................................ 10

3. Current State of the Property Market............................................................................................. 11

3.1 Selected Factors......................................................................................................................... 11

3.1.1 Current Size of the Property Market.................................................................................. 11

3.1.2 Prospect for Future Growth in Property Sector................................................................. 13

3.1.3 Challenges Faced in Property Sector.................................................................................. 13

4. Strategic Plans.................................................................................................................................. 15

4.1 Affordability............................................................................................................................... 15

4.2 Strategic Lands for Development.............................................................................................. 15

4.3 Dividends to Shareholders......................................................................................................... 15

5. Net Changes of Cash Flow................................................................................................................ 16

5.1 Major Cash Flow......................................................................................................................... 16

6. Major Capital Investment................................................................................................................ 17

6.1 Breakdown of Cost for Major Capital Investment.................................................................... 17

6.2 Major Source of Funding............................................................................................................ 18

7. Free Cash Flow.................................................................................................................................. 19

7.1 Analysis....................................................................................................................................... 19

8. Ratio Analysis Industry Comparison............................................................................................. 20

8.1 Current Ratio.............................................................................................................................. 20

8.2 Quick Ratio................................................................................................................................. 21

8.3 Debt to equity ratio.................................................................................................................... 22

8.4 Debt to assets ratio.................................................................................................................... 23

8.5 Interest coverage ratio............................................................................................................... 24

8.6 Degree of Financial Leverage..................................................................................................... 25

8.7 Operating Cash Cycle.................................................................................................................. 26

9. Projected Revenue........................................................................................................................... 27


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9.1 Projected New Sales................................................................................................................... 27

9.2 External Variables...................................................................................................................... 28

9.2.1 Rate of Inflation................................................................................................................... 28

9.3 Projected Cost of Sales............................................................................................................... 29

9.4 Projected Gross Profit................................................................................................................ 30

9.5 Projected Profit before Tax........................................................................................................ 30

9.6 Overall Trend Analysis............................................................................................................... 31

9.6.1 Analysis................................................................................................................................ 33

10. Conclusion...................................................................................................................................... 34

11. Reference........................................................................................................................................ 35

12. Appendix........................................................................................................................................ 39

12.1 Free Cash Flow.......................................................................................................................... 39

12.2 Ratio.......................................................................................................................................... 41

12.2.1 Financial Data.................................................................................................................... 41

12.2.2 Liquidity Ratio................................................................................................................... 42

12.2.3 Solvency Ratio................................................................................................................... 43

12.2.4 Investment Ratio............................................................................................................... 44

12.2.5 Profitability Ratio.............................................................................................................. 45

12.3 Forecasting............................................................................................................................... 46

12.3.1 Revenue............................................................................................................................. 46

12.3.2 Inflation Rate Table........................................................................................................... 50

12.3.3 Percentage of sales method............................................................................................. 51

12.4 Turnitin Results........................................................................................................................ 53


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List of Tables

1.1 Background of Hua Yang Berhad

1.2 Management Directory of Hua Yang Berhad

1.3 Background of the development of Hua Yang

2.1 List of subsidiaries from Hua Yang Group

3.1 Population by 5-year Age Group in the year 2015

3.2. The list of Hua Yangs competitors

5.1. The major cash flow from operating, investing and financing activities.

8.1 The total days of cash cycle for HYB and TILB

9.1 The breakdown of the new launches worth RM 721 million

9.2 The forecasted revenue from different organizations

9.3 The percentage of cost of sales based on revenue

9.4 The projected gross profit for FY17 based on the previous computed data

9.5 The projected Profit before Tax computed using the percent sales method.

9.6 The overall trend percentage with base year of 2011.


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List of Graphs

3.1 The forecasted increment of the new supply of houses

8.1 Trend for 5 years of current ratio in Hua Yang and Tambun Indah Land

8.2 Trend for 5 years of quick ratio in Hua Yang and Tambun Indah Land

8.3 Trend for 5 years of debt to equity ratio in Hua Yang and Tambun Indah Land

8.4 Trend for 5 years of debt to asset ratio in Hua Yang and Tambun Indah Land

8.5 Trend for 5 years of interest coverage ratio in Hua Yang and Tambun Indah Land

8.6 Trend for 5 years of degree of financial leverage ratio in Hua Yang and Tambun Indah Land

8.7 Trend for 5 years of operation cash cycle in Hua Yang and Tambun Indah Land

9.1 The fluctuation of the annual average inflation rate in Malaysia from 2006 to 2017f

9.2 The percentage of cost of sales using the percentage of sales method

9.3 The overall trend analysis for Hua Yang Berhad


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Abbreviation

HYB Hua Yang Berhad

TILB Tambun Indah Land Berhad

GDV Gross Development Value

GST Goods and Services Tax

FY Financial Year

CY Calendar Year

PBT Profit Before Tax


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1. Background of the Company

1.1Management Directory

1.2 Company Overview

The prime vision of Hua Yang Berhad is to make dreams of affordable home ownership a reality.

After 37 years of establishment, the company has built more than 15,000 properties worth RM 2.6

billion in Kuala Lumpur, Selangor, Johor, Perak and Negeri Sembilan. Hua Yang Berhad is considered

as Malaysias leading property developer in building affordable housing. With the new cycle of

property market, the company expected a better future. They are planning in venture into Penangs

property market to realize more dreams (Hua Yang Berhad, 2015).

1.3 Company News

According to The Star Online, Hua Yang Berhad is planned to develop 6 parcel of freehold land in

Penang. The land is used to build mixed development with Gross Development Value (GDV) of RM 311

million. The project will comprise of service apartment, condominiums and to storey of shop lots. Hua

Yang Berhad, Chief Executive Office, Ho Wen Yan has announced that they are confident to obtain

leverage in developing affordable homes on the strategically located land bank. The project land is

situated strategically in accessing North South Expressway as well as surrounded by amenities such as

shopping malls, banks, schools, and food and beverage outlet (The Star Online, 2015).


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1.2 Background and Development

1.3 Financial Performance

In ended of 31 March 2015, Hua Yang has achieved remarkable growth of 14.5% in year 2015. The

group revenue improved from RM509.9 million in 2014 to RM583.6 million in year 2015. Hua Yang

Berhad has successfully reached RM100 million of net profit and aimed to steer higher revenue in

ongoing projects. In financial year 2015, Klang Valley development contributed 40% of total revenue

to the Group with integrated development of residential development in Sentrio Suites in Kuala

Lumpur and Metia Residence in Shah Alam. Moreover, development in Johor is nearly 30% of total

Group revenue in township development of Taman Pulai Indah and Taman Pulai Hijauan. And, Perak

development is about 20% to the revenue with continued development of Bandar Universiti Seri

Iskandar Township (Hua Yang Berhad, 2015).


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2. The principle activities of the company

Hua Yang is an Investment Holding Company. The main business functions concentrate in the business

of property development and the provision of management services. The business segments are

categorized into the property development and the rental from concession assets segment. They

develop residential and commercial properties, invest in property operating segment. For rental from

concession assets segment, the business collects the rental from the assets. The assets are monitored

under build, operate and transfer agreements (investor.com, 2016).

2.1 Subsidiaries Company


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3. Current State of the Property Market

HYB mainly does property development which are residential and commercial properties.

3.1 Selected Factors

There are a few factors or criteria that will reflect the current state of the property development

industry in Malaysia. The selected factors are the current size of the property market, the prospect for

the future growth in the property sector, and the challenges faced by the property industry.

3.1.1 Current Size of the Property Market

3.1.1.1 Introduction

Investor Words (2016) mentioned that a market must be of a relevant size for a company to gain profit.

3.1.1.2 Market PotentialThe total size of the market to cater a certain product at a known timeframe is defined as market

potential.

3.1.1.2.1 Potential Customer Base


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The potential buyers will be from age group of 25 years old and above which will equal to 17,273,000

of the total population. There are three categories of potential buyers i.e. owner-occupiers, investors

and speculators. Owner occupiers takes up the largest portion for the potential buyers as a home is

one of the basic necessities.

3.1.1.2.2 Competitors

People tend to misunderstand that a higher stock price will indicate that that company is larger. This

is a common misconception as it may wrongly represent a companys true worth. Hence, market

capital will be used to compare HYB with its competitors (Investopedia, 2016). The competitors chosen

are based on Hua Yangs market capital which is RM 469.92 mil to determine the other property

development companies within a suitable range for its market capital.

3.1.1.2.3 Economic Environment

One of the major changes in 2016 will be the difficulty to secure a mortgage from financial institutions.

The reason behind this difficulty is because at the moment financial institutions are experiencing

troubles with the high asset-to-deposit ratio and in addition with the weakening strength of the Ringgit

and the expensive cost of banking. Thus, bank will be reluctant to lend money to the people to ensure

that the money they lent to the investors or public will bring the safest and highest return on

investments (iProperty, 2016).


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3.1.2 Prospect for Future Growth in Property Sector

Bank Negara Malaysia (2015) reported that the supply of affordable housing must be increased. It is

estimated that approximately 202,571 new units will be needed each year from 2016 till 2020 to

match the forecasted increase in number of household.

In Budget 2016, RM 1.6 billion has been set aside to build 175,000 units affordable homes under the

PRIMA programmes. This is a step to solve the housing crisis that is currently faced by the Malaysians.

Other than that, a total of RM200 million has been set for the First House Deposit Financing Scheme

(iProperty, 2016). This will boost the property sector to build more residential properties at an

affordable price to meet the demand. HYB has since embarked on their Brand Development

Programme to aim to be the preferred partner for people whom are looking to purchase their first

house (Hua Yang, 2015).

3.1.3 Challenges Faced in Property Sector

The triple blow in the year 2015 hit many consumers in Malaysia. The triple blow is defined as a

downfall of the national economy, introduction of the GST and a weakening currency. In return, this

triple blow has caused an increased in inflation (Euromonitor International, 2016a). The property

sector is highly dependent on the demand from the buyers. In an event where the inflations increases

but wages maintain, people will tend to demand on lower price product, in this case affordable homes.


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As land price goes up, it will be more costly to build affordable houses for the community. Developers

may face difficulty in receiving their return in investment due to low profit margins (Saieed, 2016).


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4. Strategic Plans

4.1 Affordability

As a listed company, HYB has many strategic plans for seizing opportunities and facing challenges in

its industry. One of which is the method of strategic planning of market segmentation that the

company carries out. Most of the housing development projects done by HYB are catered for the first

time young adult buyers and the newly-married couples with young children. Besides that, HYB also

tries to accommodate to a reasonable purchasing price of nothing above RM500 per sq ft which has

been sustaining the developing business for 35 years (Tan, 2013). This shows that the company

strategize in a niche market of affordable home segments.

4.2 Strategic Lands for Development

Investing in a land to develop is also an important strategy that HYB undertakes. In developing aresidential area, location is a very important factor to consider. HYB is always looking for more

strategic land to develop. According to Ho Wen Yan, the chief executive of HYB, they have been

focusing on procuring good land and they venture to area that has demand but no developers are

supplying (Tan, 2013). With that, HYB is able to sell its development fast and earn revenue.

4.3 Dividends to Shareholders

Another strategy is that HYB plans to maintain the dividend given to the shareholders and

stakeholders. Although the economy is unstable, the development still stands firm on its performance

in 2016 that most of the proposed development are going according to plan. According to Chief

Executive officer Ho Wen Yan, Demand is expected to outstrip supply and our proven competencies

in this segment will enable the group to create a sustainable value for both shareholders and

stakeholders at large (Puspadevi, 2016). In this sense, HYB is confident that they would still generate

profit enough to yield dividend for the stockholders which ensures the companys market value is

stable. With a stable market value people would continue investing stock under HYB which increases

the equity for the company to further invest.


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5. Net Changes of Cash Flow

There is a net increase of RM 3,223,525 of cash and cash equivalents during HYBs latest financial year

of 2015. HYB had a total cash and cash equivalents of RM 30,212,539 at the beginning of the year as

at 1 April 2014 where the total ending cash and cash equivalents as at 31 March 2015 is of RM

33,436.064. This means that HYB has an extra of RM 3,223,525 cash on hand at March ended 2015

than the previous financing year.

5.1 Major Cash Flow


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6. Major Capital Investment

6.1 Breakdown of Cost for Major Capital Investment


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6.2 Major Source of Funding


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7. Free Cash Flow

7.1 Analysis

During FY15, the cash outflow for the investing activities is quite high. Mainly due to the purchase of land held for property development, plant and equipment

and investment in properties. The negative free cash flow is not necessary a bad indication for the company. The company may invest in all these activities

to generate profit in the future. This means that the company is growing or expanding their fixed assets (long term assets) in the current stage. Thus, HYB is

a good company as it foresees the future opportunity in property development (Investopedia, 2016a).

In FY15, HYB has purchased lands that has area as large as 22.52 acres across Penang and Perak and carries a GDV worth RM 423 million. During a 5 year

duration, HYB has a total of 492 acres, of approximately RM 3.3 billion GDV and will be able to maintain their principal activities for another six to eight years

(Hua Yang Berhad, 2016).


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8. Ratio Analysis Industry Comparison

8.1 Current Ratio

A healthy and acceptable current ratio ranges from 1:1 to 3:1. Both companies are staying in the

liquidity range. Hua Yang Berhad (HYB) has a lower liquidity compared to Tambun Indah Land Berhad

(TILB). The lowest current ratio of HYB is in year 2013 is because they incurred a large portion for other

payables which have to settle within 2 months. While in year 2015, both company retained their

liquidity level at nearly 2:1. The government has taken initiative to develop the infrastructure and

implement new affordable houses scheme in the 11th Malaysia Plan. With a steady liquidity,

companies will have easier access in getting approval of loans from the bank to tender of these

government projects.


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8.2 Quick Ratio

From the graph above, TILB has a better management towards the liquidity of quick ratio compared

to HYB. HYB quick ratio has a consistent growth from year 2013 to 2015. This is because of the increase

of accrued billing in respect of property development costs. In year 2012, HYB is more liquid than TILB.

High revenue is generated in year 2011 by selling off 1,631 units in Johor, Perak, Seremban and Klang

Valley. Thus the company has retained more than 4 times of cash and bank balance compared to year

2011. The liquidity of the company dropped from 2.1:1 to 1.0:1 in year 2013 is because the company

has three times more current trade payable compared to year 2012.


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8.3 Debt to equity ratio

The debt to equity ratio of HYB in year 2011 to 2012 is much lower compared to TILB. As the result,

the company has lower interest expenses and operated in lower risk. According to the graph, it

showed that HYB changed their capital structure from refraining to use shareholder equity to fund

their assets in financial year 2014 and 2015. This is because they think that the company can generate

more earning to pay the great amount of interest expense. In addition, a high interest rate can reducethe tax payable to the government. In year 2015, both companies have a high debt to equity ratio to

raise capital. The high profit generated from the financing through investment activities can maximize

the shareholders wealth.


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8.4 Debt to assets ratio

According to Chairman of HYB, the company recorded 62% of revenue compared to the previous year.

The impressive revenue made has caused the company has a higher debt to assets ratio compared to

the benchmark in the industry, TILB in year 2013. HYB finances a total of 29% of its assets by liabilities

and another 71% by equity while TILB finances 24% of its assets by liabilities which is lower than HYB.

Thus TILB will have less debt or liabilities to pay each month.


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8.5 Interest coverage ratio

From the data above, HYB managed the interest coverage ratio very well compared to TILB. The

company has more than enough profit to pay the interest expenses. This high interest coverage ratio

is because 71% of Hua Yangs assets is funded by equity while only 29% is funded by liabilities. A good

financial record is more easily in applying finance through external sources. Construction Company is

a high risk company. It is good for HYB to maintain the higher interest cover ratio with lower level of

financial risk to cope with the uncertainty happened in the industry.


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8.6 Degree of Financial Leverage

In these 5 financial years, both companies have a consistent of nearly 1 of degree of financial leverage.

This is to conserve the earning per share of their company. Both companies are able to conserve the

level of earning per share from the operating profit generated through the 5 consecutive financial

years.


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8.7 Operating Cash Cycle

Operating cash cycle of both companies resulted to be a negative value which means that the

company controls their cash cycle well. The company is able to collect payments from customers much

faster compared than paying to its suppliers. From the graph above, HYB did better in year 2011, 2013

and 2014 than TILB. On average, account payable payments of HYB is not as good as TILB, as it takes

a longer time to pay its suppliers.


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9. Projected Revenue

9.1 Projected New Sales

HYB remains the targeted sales for FY17 to be RM 500 million. The reason behind this target is because

the management plans to launch new project of a GDV worth RM 721 million and projects that are

yet to be sold worth RM370.7 million. However, Kenanga Research (2016) stated that the FY17

targeted sales is slightly too high due to the expected weak sales, stringent loan requirements from

Bank Negara Malaysia and higher rate of rejection from bank for loans and hence propose the

forecasted sales to be RM 409.5 million. This estimated sales is supported by TA Securities (2016)

which reported that albeit HYB has set eyes to launch 48% of new projects, however due to weak

market conditions, they will set their estimates approximately 2% to 7% below their target sales which

is approximately RM 404 million to RM 471 million.

Varies organization produced their projected revenue to HYBs FY17 and the data is as follow:-


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Based on conservatism principal, the forecasted revenue conducted by Kenanga Research and BIMB

Securities is exceptionally high compared to the other three (Accounting tools, 2016). Hence, revenue

forecasted by RHB is chosen.

9.2 External Variables

9.2.1 Rate of Inflation

The annual average inflation rate for the year 2016 is forecasted to be 3.13%. An increment in the

interest rate would cause an increase in cost of materials, labours and etc. which would eventually


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affect the property development cost for the company. This cost is recorded under the cost of sales

in the income statement.

9.3 Projected Cost of Sales


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Using the percent-sales method, the cost of goods is expected to increase by an additional 1.34%.

Thus the cost of sales for FY17 will be 67.55% of the revenue.

9.4 Projected Gross Profit

9.5 Projected Profit before Tax

.-----


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9.6 Overall Trend Analysis


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9.6.1 Analysis

The above graph shows that the revenue for FY17 will further decrease to 294% of the base year 2011.

The percentage cost of sales out of the revenue is projected to increase from the financial year 2016

to financial year 2017. The cost of sales increases even though FY17 revenue is projected to decrease

as construction of ongoing projects will still be on the run thus cost of labours, plants and machineries

and cost of materials is still incurred.

Due to the projected increase in the percentage of cost of sales and the drop in revenue, thus the

gross profit is anticipated to fall by 26% in FY17; at a higher rate compared to the fall in gross profit in

FY16. This is because the percentage of decrease for the revenue from FY15 to FY16 is 4% while from

FY16 to FY17 is 11%.

As the gross profit in FY17 is expected to fall, thus the PBT is expected to drop as well by 91%. The rate

of decrease for FY17 PBT is faster as compared to FY16 PBT due to a higher rate of decreased in the

gross profit in FY17.


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10. Conclusion

In a nut shell, HYB will still sustain even though with the current market condition in Malaysia, as HYB

strategy is to provide affordable houses to solve the current housing crisis. Government is providingincentives to urge private developers to enter the affordable market. HYB has been investing in

landbanking and has a total of RM 3.3 billion worth to sustain them for another 6 to 8 years. With a

current ratio of 2.0, HYB still remains as a liquid company despite investing a lot in long-term assets

(lands, plants and equipment) albeit being slightly below its competitor. HYB mainly funds it assets by

71% of equity and 29% of liability which indicates that it has a low leverage.

Due to the high amount of investing activities for purchasing lands and the high amount of dividend

paid, HYB will have a negative free cash flow, which indicates that HYB may not be able to further

invest to enhance the shareholders value. HYB also manages its cash cycle well by collecting faster

from customers and delaying its payment to suppliers. According to analysist, the forecasted revenue

for FY17 is expected to drop and thus reducing its gross profit and PBT due to soft market sediment,

stringent loans and GST.


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12. Appendix

12.1 Free Cash Flow


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Formula used to calculate Free Cash Flow


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12.2 Ratio

12.2.1 Financial Data

Financial Data 2015, RM 2014, RM 2013, RM 2012, RM 2011, RM

Closing Inventory 9,959,290 6,481,657 6,528,877 4,944,598 4,183,986

Account Receivable 89,071,952 82,644,145 38,166,678 57,470,676 27,114,941

Cash 40,797,775 35,129,960 29,544,897 25,161,722 6,258,628

Current Assets 499,011,769 428,871,703 222,693,746 203,655,324 168,752,185

Property Development Cost 169,569,513 141,890,990 41,385,114 50,192,169 60,676,320

Total Assets 928,388,476 832,765,461 633,898,340 447,123,762 357,028,563

Current Liabilities 251,262,869 243,707,616 173,968,058 69,918,017 73,917,743

Account Payable 146,630,265 174,485,092 156,527,240 56,495,172 47,889,253

Total Liabilities 462,517,655 445,782,982 299,421,343 178,866,526 136,051,861

Shareholder Equity 465,870,821 386,982,479 334,476,997 268,257,236 220,976,702

Short Term Debt 78,591,751 60,671,089 6,686,038 6,439,390 19,528,848

Long Term Debt 192,080,904 188,608,761 108,467,021 90,840,212 53,514,655

Revenue 583,576,377 509,892,614 408,670,468 306,412,023 188,865,151

Interest Expenses 1,491,738 1,106,636 503,235 762,082 1,062,727

Cost of Goods Sold 382,632,201 343,008,649 257,440,985 198,517,578 133,178,100

Gross Profit 200,944,176 166,883,965 151,229,483 107,894,445 55,687,051

Other Income 5,980,722 2,549,366 7,032,338 2,483,225 1,270,228

(-) Administrative expenses 34,409,552 22,959,144 18,707,622 16,871,199 11,872,722

(-) Selling expenses 17,571,663 33,005,710 43,744,897 19,604,798 9,764,383

EBIT 154,943,683 113,468,477 95,809,302 73,901,673 35,320,174

Source: (Hua Yang Berhad, 2015) (Hua Yang Berhad, 2014) (Hua Yang Berhad, 2013) (Hua Yang Berhad, 2012) (Hua Yang Berhad, 2011)


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12.2.2 Liquidity Ratio

Liquidity ratio is the ability to meet its short term financial obligation (Investopedia, 2016).

Current Ratio =

Quick Ratio =

Financial Ratio 2015 Ratio 2014 Ratio 2013 Ratio 2012 Ratio 2011 Ratio

Current ratio499,011,769 428,871,703 222,693,746 203,655,324 168,752,185

251,262,869 2.0 243,707,616 1.8 173,968,058 1.3 69,918,017 2.9 73,917,743 2.3

Quick ratio319,482,966 280,499,056 174,779,755 148,518,557 103,891,879

251,262,869 1.3 243,707,616 1.2 173,968,058 1.0 69,918,017 2.1 73,917,743 1.4

Current Asset

Current Liabilites

Current Asset - Inventories - Property Development Cost

Current Liabilities


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12.2.3 Solvency Ratio

Debt ratio is the ability of the company to meet long term obligation (Investopedia, 2015).

Debt to equity ratio =


Debt to equity ratio192,080,904 188,608,761 108,467,021 90,840,212 53,514,655

465,870,821 0.41 386,982,479 0.49 334,476,997 0.32 268,257,236 0.34 220,976,702 0.24

12.2.4 Efficiency Ratio

Efficiency ratio is the ratio that usually applied to the effectiveness of the company in using its assets and liability internally (Investopedia, 2016).

Debt to assets ratio =

Operating cash cycle =


Debt to assets ratio270,672,655 249,279,850 115,153,059 97,279,602 73,043,503

928,388,476 0.29 832,765,461 0.30 633,898,340 0.18 447,123,762 0.22 357,028,563 0.20

Long term debt

Shareholder's Equity

Short term debt + Long Term Debt

Total Assets

Trade payablex 365 days

Cost of good sold+ +

Inventoryx 365 days

Cost of good sold

Account receivablex 365 days

Sales


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Operating Cash Cycle 2015 Days 2014 Days 2013 Days 2012 Days 2011 Days

Days of Inventory

Holding Period

9,959,290 6,481,657 6,528,877 4,944,598 4,183,986

382,632,201 10 343,008,649 7 257,440,985 9 198,517,578 9 133,178,100 11

Days of Account

Receivable Collection

Period

89,071,952 82,644,145 38,166,678 57,470,676 27,114,941

583,576,377 56 509,892,614 59 408,670,468 34 306,412,023 68 188,865,151 52

Days of AccountPayable Payment

Period

146,630,265 174,485,092 156,527,240 56,495,172 47,889,253

382,632,201 -140 343,008,649 -186 257,440,985 -222 198,517,578 -104 133,178,100 -131

Total Days of Cash Cycle -75 -120 -179 -26 -67

12.2.4 Investment Ratio

Investment ratio concerned the return to the shareholder holders (Accounting for Management.org, 2015).

Degree of financial leverage =


Degree of 154,943,683 113,468,477 95,809,302 73,901,673 35,320,174

1.0Financial Leverage 153,451,945 1.0 112,361,841 1.0 95,306,067 1.0 73,139,591 1.0 34,257,447

Earning before Interest and Taxation

EBIT - Interest


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12.2.5 Profitability Ratio

Profitability ratio is a financial tool that used to assess a businesss ability in generating earning as compared to its expenses and relevant

incurred cost during a specific period of time (Investopedia, 2016).

Interest coverage ratio =


Interest Coverage Ratio 154,943,683 113,468,477 95,809,302 73,901,673 35,320,174

1,491,738 103.9 1,106,636 102.5 503,235 190.4 762,082 97.0 1,062,727 33.2

Profit before Interest and Taxation

Interest Payable


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12.3 Forecasting

12.3.1 Revenue

12.3.1.1 TA Securities

12.3.1.2 Kenanga Research


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12.3.1.3 RHB


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12.3.1.4 BIMB Research


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12.3.1.5 Thomson Reuters


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12.3.2 Inflation Rate Table


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12.3.3 Percentage of sales method

12.3.3.1 Cost of Sales

Thus for Cost of sales in FY17:


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12.3.3.2 Profit before Tax

Thus for profit before tax in FY17:


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12.4 Turnitin Results

ng wei lins group fm assignment

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