Professional Documents
Culture Documents
PHB should hire an assistant to help the Administration Manager. The tasks
can be divided between the 2 people. 1 employee should handle the drivers
scheduling since it requires a lot of time and performed daily.
4) High Administrative and Operating Expenses
There is an increase in Administrative and Operating Expenses by almost 46%
from the year 2008 to 2009 due to the following expenses:
a. Directors fees were increased although the companys gross profit was
declining over the years.
b. Almost 100% increase in Consultancys fees.
c. 300% increase in Ex-Gratia
d. There was almost 225% increase in Gift & Donation in the year 2008
which was from RM12,776 to RM41,222 and in the year 2009, the
expense has increased to RM43,260.
e. Medical expenses have also increased about 91% from 2008 to 2009
probably due to the drivers who often fall sick due to the long travel
duration.
SOLUTION :
a. Director fees should be maintained to RM400,000. Since the
companys performance was depreciating from 23.21% on 2006 to
16.51% in 2008, this should indicate that increasing the directors fees
is a bad move.
b. PHB need to find the real reason to hire a consultant. This cost can
be reduced if an analysis is done to find out whether hiring consultants
increases the companys revenue.
c. Payment of Ex-Gratia to the employees should be reevaluated and
other possible avenues should be considered to replace the ex-gratia.
d. Gift & Donation can be replaced with Bonus to the employees.
Sharing the companys revenue with the staff based on their
performance also could be done. This effort can motivate the
employees to perform better and reduce the compensation payments
(staff salaries and allowances), which has been doubled in the year
2009. This can also lower the compensation amount that is being paid
to the refineries.
e. PHB should consider engaging with insurance company to support
the employees medical expenses. Paying premium every year can
avoid a sudden increase in the medical expense.
5) Most of the tankers have depreciated and causes the high maintenance.
SOLUTION :
Replace a few of the oldest tankers to new tankers - need further analysis
(cost of the new tankers need to be known). Since the payment for the new
tank will fall under long-term liability, payment can be made for the next 10
years. Maintenance will be much lower compared to the current cost. Not only
that, expense on spare parts can also be lowered
OILENE
1) Oil contaminated and plant shut down.
According to Oilene the CPO supplied by PHSB is contaminated with water or
sludge. As the result, Oilene have to shut down their processing plant to clean
on the sludge almost on a weekly basis. When this happened, the expenses
will increase and as the result, Return on Investment (ROI) will decrease due
to plant shut down.
DATE
Dr. Expenses
Cr. Cash
Amount
Amount
DATE
Dr. Inventory
Cr. Cost of Goods Sold
Amount
Amount
So, gross profit will be decrease and after deducting all the operation
expenses, nett profit will also decrease.
iii.
iv.
clients.
To engage with MPOB (Malaysia Palm Oil Berhad) to restrict and enhance the
v.