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Company History & Business Hwa Tai Industries Berhad (HTIB) is one of the premier and longest established biscuit manufacturers in Malaysia. Established in 1962 and listed on the Stock Exchange Malaysia in 1992. Since then, this fast expanding company has grown to be one of the largest players in the biscuits industry in the country and produce a fine, wide range of superior quality biscuits. It has been successfully marketed domestically and internationally through HTIB’s own vast and comprehensive distribution network. Our biscuits are marketed under the brand name or trademark of “HWA TAI” and “LUXURY”. We take pride in our excellent innovation and high quality products which have firmly entrenched us not only in Malaysia but also in over 50 countries around the world. We are keenly involved in the integrated supply chain of our products, from manufacture to sales to distribution throughout the entire trade channels. Due to our extensive and comprehensive distribution network, we are also carrying products / brands by other principals for the Malaysian market. Our Vision We aim to be a leading biscuits and confectionery manufacturer in the region known for its product quality and variety. Our Commitment HTIB is committed in producing the best quality biscuit products for our customers all over the world and creating business opportunities for our partners. We have more than 49 years of manufacturing experience and the ability to manage our entire value chain, from procurement of raw materials to distribution of finished products. From the company's very first beginning, we have recognized that the skilled and dedicated people who work for us are critical to our success. We expect high standards from our staff – a team totally committed to the provision of the highest quality service in the business.

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fast-food chains.Quality Assurance HTIB's dedication to quality is further reinforced by using the most advanced state-of-the art machinery and processing techniques to produce premium biscuits with distinct flavors and tastes. A total of 40% of our company's production is exported internationally to countries such as China. we participated in the Monde Selection in Belgium with 4 of our products. USA. HTIB has developed an internationally recognized Quality Management System based upon MS ISO 9001:2000 to ensure that our products conform to international standards. Brunei.e. Mauritius. Hwa Tai Industries Berhad won two gold medals from the Monde Selection again for Luxury Original Calcium Crackers and Luxury Vegetable Crackers. Nigeria and 28 other countries. Papua New Guinea. Siang-Siang cream crackers & Choose. In the year 2000. Taiwan. And we are still growing . Today. and we were awarded with 2 gold & 2 silver medals respectively. our products can be found locally from small sundry shops to big hypermarkets. 3 ACC720/0911/RAR . Awards & Achievements As an active and enterprising company. airlines and other mass consumption industries. Maldives. Middle East. i.support facilities are constantly being upgraded. Singapore. HTIB Today HTIB has successfully established a strong presence in Malaysia and has built up a wide international market. with our continuous goal of producing the finest product ranges possible. Sesamio. Duchess Cookies. Hong Kong.

120% 100% 80% 60% 40% 20% Total Non Current Assets 0% 2009 -20% Total Non Current Assets 2009 2008 2007 3% 21% 3% Property. Hwa Tai got higher of asset which is not easily convertible to cash or not expected to become cash within the next year. plant and equipments. in 2008. Meaning that compared to this three years. investment properties and prepaid land lease payments.1 Horizontal Analysis for Non Current Assets Based on the graph above. that is 21% as compared to the year 2009 and 2007 which only have 3%. 4 ACC720/0911/RAR . The non-current asset growth was the biggest in year 2008. is a technique for evaluating a series of financial statement data over a period of time. investment in an associate company.1. plant and equipment 3% 8% -1% Leasehold land Investment in an associate company Investment properties Prepaid land lease payments Property. Horizontal Analysis (Balance Sheet) Definition: also called trend analysis. plant and equipment Leasehold land Investment in an associate company Investment properties Prepaid land lease payments 2008 2007 3% 0% 0% 2% -2% -1% 0% 100% 17% 0% 100% 3% 1. the non-current asset basically is the investment of property. leasehold land.

Trade receivable trend dropped drastically in year 2007 from 2008 (7% dropped to 2%).2 Horizontal Analysis for Current Assets Based on the graph. current assets include inventories. trade and other receivables. During good years. the current assets are higher compare to 2008. During the economic downturn. By reason of this matter. prepayments. fixed deposit place. 5 ACC720/0911/RAR . Based on the result above. the cash in 2008 moved to negative (-624%). Since experiencing an economic downturn in 2008. Hwa Tai decrease. Hwa Tai experienced losses in 2008. As we can see. cash and bank balance and tax recoverable. All this assets are readily to be converted into cash within one year in the normal course of business. and during bad times. Trade receivable was at the highest in year 2009 when comparing year-to-year (9%).200% 100% 0% 2009 -100% -200% -300% -400% -500% -600% -700% Cash and bank balance Total Current Assets 2008 2007 Prepayments Fixed deposit place with licensed bank Tax recoverable Inventories Trade and other receivables Total Current Assets Inventories Trade and Other receivables 9% 7% 2% Prepayments Fixed Deposit Place 0% 100% 0% Cash and Bank Balance Tax Recoverable 2009 2008 2007 4% -3% 4% -24% 18% -15% 110% 0% 0% 7% -624% 65% -53% 56% 80% 1. the trade receivable is good. in 2009 and 2007. the trade receivable is bad. This is in tandem with the economic trend. total for non current 2008 is higher and the total current asset is lower. Their cash reserves are remain positive in 2009 and 2007. The lowest trade receivable trend is in 2007 (2%).

v. The increased in the year 2008 are due to: i. iv. 2008 (8%) respectively. ii.2007 Total Assets 2008 2009 0% 2% 4% 6% Total Assets 4% 8% 4% 8% 10% 2009 2008 2007 1. vi.3 Horizontal Analysis for Total Assets The total assets registered the highest in years. iii. plant and equipments (8%) increased in inventories (18%) increase in investment properties (100%) increased in prepaid land and lease payment (100%) increased in fixed deposit place (100%) increased in noncurrent assets (21%) 6 ACC720/0911/RAR . increased in investment on property.

In addition. 7 ACC720/0911/RAR . In 2009. These liabilities represent money Hwa Tai owes one year or more in the future. The portion of noncurrent liabilities consists of loans and borrowings and hire purchase liabilities. in 2009.4 Horizontal Analysis for Non Current Liabilities Noncurrent liabilities are the obligations of the firm that generally are due more than one year after the balance sheet date. Hwa Tai bought more assets in terms of transportation in order to expand their businesses after downturn in 2008. Based on the graph. Hwa Tai posses the highest noncurrent liabilities (21%) compared to 2008 and 2007.200% 100% 0% 2009 -100% -200% -300% -400% -500% -600% 2008 2007 Loans and borrowings Deferred tax liabilities Hire purchase liabilities Total Non Current Liabilities 2009 2008 2007 Total Non Current Liabilities 21% -58% -482% Loans and Borrowings 21% 0% 0% Deferred Tax Liabilities 0% 20% 100% Hire Purchase Liabilities 0% 0% -470% 1. deferred tax liabilities are an important component of liabilities for many companies.

150% 100% 50% 0% 2009 -50% -100% -150% -200% 2008 2007 Trade and other payables Hire purchase liabilities Short term borrowings Loans and borrowings Term loans Bank overdraft Provisions Tax Payable Total Current Liabilities Total Current Liabilities 2009 2008 2007 5% 17% 9% Trade and Other Payables 21% 0% 0% Hire Purchase Liabilities 0% 20% 100% Loans and Borrowings Term Loans Provisions Tax Payable Bank Overdraft Short Term Borrowings -3% 0% 0% 0% 0% 100% 95% -93% -16% 11% -14% 0% 0% 100% 9% 0% 0% -470% 1. 2007).5 Horizontal Analysis for Current Liabilities Current liabilities are understood as all liabilities of the business that are to be settle in cash within the fiscal year or the operating cycle. 8 ACC720/0911/RAR . the current liabilities is lower because there are no hire purchase liabilities compare to another two years (2008. Managing current liabilities is very important to Hwa Tai and other company’s cash flow process and extended viability. Based on the data above. total current liabilities increase in 2008 (17%). The increase of current liabilities in 2008 is because of increase of other payable. In 2009.

6 Horizontal Analysis for Total Liabilities The trend for total liabilities peaked in the year 2008. which is at 14%.16% 14% 12% 10% 8% 6% 4% 2% 0% 2009 2008 2007 Total Liabilities 2009 2008 2007 Total Liabilities 6% 14% 6% 1. This increase is due to the bank overdraft at 100%. This peaked is due to the increase in total current liabilities. 9 ACC720/0911/RAR .

7 Horizontal Analysis for Total Equity Total equity is the net worth of business and includes such elements as the value of common and preferred shares. this company experience higher accumulated losses in three years. the equity is increased from 2008. In Hwa Tai situation.0% 2009 -2% -4% -6% -8% -10% -12% -14% -16% Total equity 2008 2007 2009 2008 2007 Total Equity -2% -14% -3% 1. in 2009. According to the data. 10 ACC720/0911/RAR . However. the highest total equity is in year 2009 (-2%).

is a technique for evaluating a series of financial statement data over a period of time. total revenue both the three year dropped into negative figure. The gross profit was at highest in year 2008. For cost of goods sold. At this year. The lowest gross profit is in year 2007 at -76%.1 Horizontal Analysis for Income Statement (Revenue. Cost of Goods Sold. consumables and inventories. that is -3%. Gross Profit) Based on the data. 11 ACC720/0911/RAR . that is -13%.2. This is in tandem with the revenue generated for that respective year. the more purchase of raw materials. 40% 20% 0% 2009 -20% -40% -60% -80% -100% Revenue 2009 2008 2007 -7% -9% -1% Cost of Goods Sold 10% 22% -36% Gross Profit -13% -3% -76% 2008 2007 Revenue Cost of Good Sold Gross Profit 2. Second highest is in year 2009. Horizontal Analysis (Income Statement) Definition: also called trend analysis. the highest total revenue is for year 2007 (-1%). the sale was highest in 2008 (22%). However.

However. PBT and PAT are higher compared to 2008.200% 100% 0% 2009 -100% -200% -300% -400% -500% 2008 2007 Profit/ Loss before Taxation Profit/ Loss after Taxation Profit/ Loss before Taxation 2009 2008 2007 67% -386% 124% Profit/ Loss after Taxation 81% -394% 134% 2. The decrease of PBT and PAT is due to the economic downturn that happened in 2008. 12 ACC720/0911/RAR .2 Horizontal Analysis for Income Statement (Profit before Tax and profit after Tax) Hwa Tai experienced the worst profit before tax (PBT) and profit after tax (PAT) in 2008 (-386% PBT and -394% in PAT). during 2009 and 2007.

99: 1 means that for every ringgit of current liabilities.79 0. Hwa Tai has RM0.169 0.634. Hwa Tai has RM0.489 0.79 : 1 The ratio of 0. Current Ratio 2008 = = = = Current Assets Current Liabilities 35.99 of current assets.774. Current Ratio A liquidity ratio that measures a company’s ability to pay short term obligations.809 35.343. Financial ratio classified into three categories.3.539 37.486.79 : 1 means that for every ringgit of current liabilities. liquidity ratio. Current Ratio 2010 = = = = Current Assets Current Liabilities 35.79 of current assets.98 of current assets.98 0. 13 ACC720/0911/RAR . profitability ratio and solvency ratio. Hwa Tai has RM0.99 : 1 The ratio of 0.98 : 1 means that for every ringgit of current liabilities.99 0.328 45.98 : 1 The ratio of 0.795. Current Ratio 2009 = = = = Current Assets Current Liabilities 36.652 0.746. Ratio Analysis Definition: expresses the relationship among selected items of financial statement data.

for every three year. Hwa Tai would be unable to pay off its obligations. Acid Test ratio This indicator to determine whether a firm has enough short-term assets to cover its immediate liabilities without selling inventory. Acid Test Ratio 2010 = Cast + Short Term Investment + Receivables (Net) Current Liabilities = 28.Current Ratio and Acid Test Ratio Current Ratio Acid Test Ratio Series 3 0.65 2010 2009 2008 Based on the output of current ratio. This data shows that the company is not in a good financial health but it does not mean that Hwa Tai will go bankrupt.99 0.80 :1 14 ACC720/0911/RAR .98 0. Because of this matter.79 0.774.006 35.8 0.83 0. The acid-test ratio is far more strenuous than the working capital ratio.652 = 0. Hwa Tai ratio is under 1. primarily because the working capital ratio allows for the inclusion of inventory assets.80 = 0.530.

This acid test ratio is much lower compare to current ratio.898 45.411.489 = 0.83 = 0.169 = 0. Receivable Turnover This ratio measure used to quantify a firm's effectiveness in extending credit as well as collecting debts.634. measuring how efficiently a firm uses its assets.403.65 = 0.016.65 : 1 2008 Acid test ratio for the respective three years shows that Hwa Tai always gain less than 1 ratio.Acid Test Ratio 2009 = = Cast + Short Term Investment + Receivables (Net) Current Liabilities 31.03 times 2010 15 ACC720/0911/RAR .224 25.055 = 3.424. it means the current assets for this company in highly dependent on inventory. The receivables turnover ratio is an activity ratio.486.261 37. Its shows that this company cannot pay their current liabilities and should be looked at with extreme caution.03 = 3.83 :1 Acid Test Ratio = Cast + Short Term Investment + Receivables (Net) Current Liabilities = 29. Receivables Turnover = Net Credit Sales Average Net Receivables = 77.

Hwa Tai receivables are collected on average every 140 days. Based on the output.Average collection period 2010 = 365 days Receiveables Turnover = 365 3. 16 ACC720/0911/RAR .6 times Average collection period 2009 = = = = 365 days Receiveables Turnover 365 2.30 140 days Based on the output.60 140.125.03 = 120.60 2. Hwa Tai receivables are collected on average every 120 days.922 27724051 2.49 = every 120 days A high ratio implies either Hwa Tai operates on a cash basis or that its extension of credit and collection of accounts receivable is efficient. Receivables Turnover 2009 = = = = Net Credit Sales Average Net Receivables 72.

75 = 132.50 = 132 days Based on the output. Furthermore.698 29129452.75 times Average collection period 2008 = = 365 days Receiveables Turnover 365 2.48 9. this matter will decrease the confidence of the investor to invest in this company.416) 5.5 = 2.48 times Days in Inventory 2010 = 365 days Inventory Turnover = 365 -9.75 = 2. Hwa Tai took mostly more than 100 days to collect debts from the creditor and it will cause problem in running the business.Receivables Turnover 2008 = Net Credit Sales Average Net Receivables = 80. Hwa Tai receivables are collected on average every 132 days.48 = -38.245.49 = 38. Inventory Turnover This ration showing how many times a company's inventory is sold and replaced over a period Inventory Turnover 2010 = = = Cost of Goods Sold Average Inventory (54.735.449 -9.49 days 17 ACC720/0911/RAR .393. From the data in the three respective years.

9.In 2010.90) = -33.48 = 33.251) 5684149 = (8.577) 5855317.76) = 8.76 times = 365 days Inventory Turnover = 365 (8.838. Inventory Turnover 2009 = Cost of Goods Sold Average Inventory = (49.69 = 41.90times = 365 days Inventory Turnover = 365 (10. High inventory levels are seems unhealthy because it represents an investment with a rate of return of zero and it will give trouble to the company if the prices begin to fall.769.69 days = Cost of Goods Sold Average Inventory = (63.5 = (10.48 days Days in Inventory 2009 Inventory Turnover 2008 Days in Inventory 2008 18 ACC720/0911/RAR .76) = -41.90) = 10.48 times Hwa Tai inventory is sold and replaced over a period.

However. Hwa Tai got 0.50% Profit Margin 2009 = Net Income Net Sales = 2.Profit Margin This probability ratio measures how much out of every ringgit of sales a company actually keeps in earnings.52% Higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors. Based on the output in 2010.52 = 0. Profit Margin 2010 = Net Income Net Sales = 385.922 = 0.85 = 2.127 77. Same goes to 2008. And this number did not show the good performance during 2010.50% profit margin. this company had little increased their profit margin in 2009 which the company has a net income of RM0.698 = 0.03 = 2.125.989 72.0052 for each ringgit of sales.016.245.85% Profit Margin 2008 = Net Income Net Sales = 415.01 = 0. the company only has a net income of RM0. It means that the company has a net income of RM0.051.01 = 0.50 = 0.005 for each ringgit of sales. 19 ACC720/0911/RAR .224 = 0.0285 for each ringgit of sales.178 80.

The higher the number the better. companies with low profit margins tend to have high asset turnover.245. But for Hwa Tai. they experienced low profit margin but still low in asset turnover. Asset Turnover 2010 = Net Sales Average Assets = 77.5 = 1.20 = 1 times Asset Turnover 2008 = Net Sales Average Assets = 80.5 = 1.125.Asset Turnover It measures the amount of sales generated for every ringgit’s worth of assets.26 = 1 times Asset turnover measures a firm's efficiency at using its assets in generating sales or revenue.922 59901160.224 56502750.698 63626216.5 = 1. 20 ACC720/0911/RAR . while those with high profit margins have low asset turnover.016.363052654 = 1 times Asset Turnover 2009 = Net Sales Average Assets = 72. It also indicates pricing strategy.

5 = 0. From the outcome from three respective years.65 = 0.5 = 0.5 = 0.65% ROA will tells company what earnings were generated from invested capital (assets). The higher the ROA number.68 = 0.178 63626216. Return on Assets 2010 = Net Income Average Assets = 385. ROA gives an idea as to how efficient management is at using its assets to generate earnings.43% Return on Assets 2008 = Net Income Average Assets = 415. Hwa Thai does 21 ACC720/0911/RAR . ROA for public companies can vary substantially and will be highly dependent on the industry.051. because the company is earning more money on less investment.127 56502750.68% Return on Assets 2009 = Net Income Average Assets = 2. The ROA figure gives investors an idea of how effectively the company is converting the money it has to invest into net income. the better.03 = 3.01 = 0.989 59901160.Return on Assets This indicator show how profitable a company is relative to its total assets.01 = 0.43 = 3. It also known as return on investment.

43% in 2009 and 0.96 = 0. Hwa Tai earning less money on high investment.01 = 0.65% in 2008.68% for 2010.12 = 5.Preffered Dividends Average Common Stockholders' Equity 385.051.Preffered Dividends Average Common Stockholders' Equity 2. it seems that in 2009. the owner of the company gain more profit compared to year 2010 and 2008. Return on Common Stockholders’ Equity This ratio show how many ringgit of net income the company earned for each ringgit invested by the owner. We can conclude that.04% From the result.04 = 1. 22 ACC720/0911/RAR .05 = 5.not show the good ROA because they only got 0.989 40042400 = 0.96% Return on common Stockholder's Equity 2009 = = Net Income .Preffered Dividends Average Common Stockholders' Equity 415.127 40042400 = 0. 3.01 = 1. Return on common Stockholder's Equity 2010 = = Net Income .178 40042400 = 0.12% Return on common Stockholder's Equity 2008 = = Net Income .

Hwa tai shows increasing rate during 2009.00% 4. It is also a major component used to calculate the price-to-earnings valuation ratio. RM5 for 2009 and RM1 for 2008.00% 2. it already stated that the Earning Per share for Hwa Tai company’s is RM1 for 2010. From here we can conclude that.00% 2010 2009 2008 Return on Common Stockholders’ Equity From the graph. From the company’s annual report. Earnings Per Share The portion of a company's profit allocated to each outstanding share of common stock.00% 0. it shows that this company is not doing well because the percentages keep on fluctuating from three respective years.00% Percentage 3. Earnings per share serve as an indicator of a company's profitability.Return on Common Stockholders' Equity 6. Earnings per share are generally considered to be the single most important variable in determining a share's price. 23 ACC720/0911/RAR .00% 5.00% 1.

56 times Price Earnings Ratio 2009 Price Earnings Ratio 2008 In general.56 5 = 0.56 1 = 0. and to avoid basing a decision on this measure alone. However.56 = 0.Price Earnings Ratio A valuation ratio of a company's current share price compared to its per-share earnings. 24 ACC720/0911/RAR . It is important that investors note an important problem that arises with the price earning measure. It would not be useful for investors using the price earnings ratio as a basis for their investment to compare the price earning of a technology company (high price earning) to a utility company (low price earning) as each industry. the price earnings ratio doesn't tell us the whole story by itself. a high price earning suggests that investors are expecting higher earnings growth in the future compared to companies with a lower price earning. making the quality of the price earning only as good as the quality of the underlying earnings number. to the market in general or against the company's own historical price earning.56 1 = 0.112 = 0. Price Earnings Ratio 2010 = Market Price per Share of Stock Earnings Per Share = 0.11 times = Market Price per Share of Stock Earnings Per Share = 0. It's usually more useful to compare the price earnings ratios of one company to other companies in the same industry.56 times = Market Price per Share of Stock Earnings Per Share = 0. The denominator (earnings) is based on an accounting measure of earnings that is susceptible to forms of manipulation.56 = 0.

10% Based on the information of debt to total assets ratio for 2010 and 2009. the higher percentage.029. Debt to Total Asset Ratio A ratio that indicates what proportion of debt a company has relative to its assets.961 55. no dividend was paid or declared by the company since the end of the previous financial year.708 = 0. The measure gives an idea to the leverage of the company along with the potential risks the company faces in terms of its debt-load. Because of this matter. The directors do not recommend the payment of any dividends in respect of the financial year ended 31st December for the three respective year.271658429 = 27.632.289032308 = 28.16584295 = 27. Debt to Total Assets Ratio 2010 = Total Debt Total Assets = 16. 25 ACC720/0911/RAR .90323079 = 28.793 = 0. Hwa Tai have to pay less than 30% of their interest.460. For Hwa Tai.90% Debt to Total Assets Ratio 2009 = Total Debt Total Assets = 15. the percentage of Hwa Tai is below than 30%.505 57. For this ratio.Payout Ratio The amount of earnings paid out in dividends to shareholders.544. Investors can use the payout ratio to determine what companies are doing with their earnings. it will give no benefits to the company because the company has to pay the higher interest to all their debt.

382 (169. Also referred to as "interest coverage ratio" and "fixed-charged coverage". It is calculated by taking a company's earnings before interest and taxes (EBIT) and dividing it by the total interest payable on bonds and other contractual debt. Basically. We can say that this company has to struggle in order to survive the company performance and to gain higher profit margin.177 (41.877) = -2.14322735 = 2. It is usually quoted as a ratio and indicates how many times a company can cover its interest charges on a pretax basis.14times Times Interest Earned 2009 = = Income before Income Taxes and Interest Expenses Interest Expenses 2.11times Times Interest Earned 2008 = = Income before Income Taxes and Interest Expenses Interest Expenses 457. for a good company.393) = -13. Failing to meet these obligations could force a company into bankruptcy.004 (336.88542584 = 10.11377684 = 13. we noticed that ratio for TIE is decrease from year 2008 to 2010.999) = -10. 26 ACC720/0911/RAR .221. they need to have higher TIE because they will become easier for them to pay all the interest. Times Interest Earned 2010 = = Income before Income Taxes and Interest Expenses Interest Expenses 722.88times From these three respective years result.Time Interest Earned A metric used to measure a company's ability to meet its debt obligations.

96% 2009 0.56times 28.11times RM1 0.76times 41days 2.03times 120days 9.99:1 0.65:1 2.83:1 2.14times RM5 0. Profitability Analysis and Solvency Analysis 27 ACC720/0911/RAR .6times 140days 8.98:1 0.56% 10.75times 132days 10.9% 2.52% 1times 0.04% RM1 0.43% 5.9times 33days 0.80:1 3.85% 1times 3.RATIO Current Ratio Acid Test ratio Receivables Turnover Average Collective Period Inventory Turnover Days in Inventory Profit Margin Assets Turnover Return on Assets Return on Common Shareholder Equity Earnings Per Share Price Earnings Ratio Debt to Total Assets Ratio Time Interest Earned 2010 0.1 Summary for Liquidity Analysis.48times 38days 0.10% 13.11times 27.50% 1times 0.88times 1.12% 2008 0.65% 1.68% 0.79:1 0.

Conclusion & Suggestion Based on the summary from financial statement analysis above. Besides that. Hwa Tai collected their debts from the creditors in around 120 days to 140 days. they only got one times for assets turnover for the three respectively years and return on assets for Hwa Tai is higher at 2009. Hwa Tai effectively converting their money in 2009 compared to 2008 and 2010. Meaning that. Hwa Tai just got below than1. They took 33 days to 41 days. Asset turnover measures a firm's efficiency at using its assets in generating sales or revenue. From this result. they need to manage the creditors in order to make sure they pay all the credit at a given period. Higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors. reduce the days in inventory. Munchy and London Biscuits. As we looked at the current and acid test ratio. The company did not gain many profit compare to others competitors. 2010).85%). Haw Tai also took a long period to store their inventory. The reasons why this company did not performance well is because of the economic condition that affect it production. Hwa Tai highest profit margin is during 2009 (2. It is a long period to regain the capital. In this three years (2008. we can conclude that this company Hwa Tai has a very crucial time in 2008. 28 ACC720/0911/RAR . The credit management must be well organized in order to success. Other than that. It shows that. The good inventory management can be implement if Hwa Tai take at least a week for their product to be store. The higher the number the better. the receivables turnover is around two to three times only. Hwa Tai is having a problem and unable to pay off all its obligations. in three respective years. For Hwa Tai. Hwa Tai have to compete with biggest competitors such as Hup Seng. From the conclusion above. they have to generate more income from collecting debt. we can say that. In order to fully maximize their assets. Hwa Tai must make sure that they are efficiently managed their assets to gain higher profit. 2009. reduce the average collective period and increase the current ratio and acid test ratio. They also need to sell their inventory and not to collect the bad debt for a long period.

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