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EVALUATION OF FINANCIAL PERFORMANCE

1) LIQUIDITY RATIOS

a) Current Ratio :

Current Asset
Current Liabilities

2013

2012

RM 337,728
RM 322,768

RM 329,199
RM 182,475

= 1.52 times (UF)

= 1.80 times (F)

From the above calculation, we can conclude that the company's current ratio of
1.52 times which in 2013 is lower than the previous year current ratio of 1.80
times in year 2012. This is meant by in 2012 the current ratio is better than 2013
because it has more current assets to cover its current liabilities.

b) Acid -test ratio : Current Asset - Inventory - Prepaid Expenses
Current Liabilities

2013

2012

RM 337,728 - RM 113,208 - RM 583
RM 222,768

RM 329,199 - RM86,781 - RM 709
RM 182,475

= 1.01 Times

= 1.32 times

This ratio indicates whether a firm has enough current assets to cover its current
liabilities without selling inventory. As for Dutch Lady, we can conclude that in
the year 2012 has no problem to pay its current liabilities which is 1.32 times
compared to the year of 2013 that is 1.01 times.

475 RM 86.179 / 360 = 1. . b) Average Collection Period : Account Receivable Annual credit sales/ 360 day  2013 RM 35.16 day *In our illustration.2) EFFICIENCY RATIO a) Inventory Turnover Ratio : Cost of Goods Sold Average / Closing stock  2013 RM 608.482 RM 982.738 RM 113.686 / 360 2012 RM36.04 Times = 6.17 Times The company shows that their stock is high sold and replaced in the year 2012 with the ratio of 6.781 = 5.208 2012 RM 535.16 days.17 times while in 2013 with the ratio of 5.00. In this case.865 RM 882.0 day only as compared to 2012 that is 1. this company not taking too much time to collect its receivables in 2013 which is 1.04 times for every RM 1. its indicates that the company is able to collect its account receivables much better in 2013 than the average collection period in 2012.0 day = 1.

179 RM 74.461 2012 RM 882.264 = 12.48 times. 3) LEVERAGE RATIO / GEARING RATIO .686 RM 78. d) Total Assets Turnover : Sales Total Assets  2013 RM 982.19 times The ratio above shows that in 2013 is 0.c) Fixed Asset Turnover :  Sales Net Fixed Assets 2013 RM 982.733 2012 RM 882. we can conclude that the firm is utilizing its assets efficiently in the year 2013 with the ratio of 12. A lower ratio means that the company need to increase its sales.17 times higher than in 2012 which is 2.48 times = 11. Dutch Lady is generating higher volume sales with the given amount of assets.88 times in the previous year for every RM 1.463 = 2.88 times From the above figure.179 RM 403.00.36 times = 2.36 times compared to 2012. 2.19 times. meanwhile with only 11. This ratio indicates that in 2013.686 RM 416.

with a raise of 8% of its assets are financed by debt. Dutch Lady has lower borrowings whereas the ratio states 46.67%) Dutch Lady used more equity and less borrowings as the source of financing.461 2012 RM 4.43% as compared to 2013 (54. while the remainder are financed using shareholder's equity.854 + RM 182.52% (UF) = 86.768 RM 416.67% (F) The Debt to Equity Ratio measure the percentage of borrowing used compared with total equity.463 RM 187.329 RM 216.463 = 54. in 2012 (86. For the ratio above.475 RM 403.998 2012 RM 187. While in 2013. b) Debt To Equity Ratio : Total Debt Total Equity  2013 RM 228.43% (F) In 2012.86%). Dutch Lady used less equity and it shows that 2012 is better than 2013.86% (UF) = 46.695 + RM 222. c) Times Interest Earned: Earnings before interest & tax .134 = 121.Approximately.a) Debt Ratio :  Total Debt Total Assets 2013 RM 5.

Interest Expenses  2013 RM 186.38) PROFITABILITY RATIO . the interest earned is much more higher and this is meant by the company ability to fulfil interest obligations compared to 2012 (27. In 2013.674 RM 5.38 times (UF) Times Interest earned measures the company's ability to cover its interest charges out of its operating profits.056 = 32.788 2012 RM 165.25 times (F) = 27.801 RM 6.

05% (UF) = 39.686 2012 RM 162.30% means that the company is making RM0.704 RM 882. It indicates that in 2013 is slightly higher than the previous year and means that 2013 is better in order to gain the operating profit.43% than in the year 2013 whereas the percentage is 18. Dutch Lady is making lower operating profits in the year 2012 which is 18.686 2012 RM 346. c) Net Profit Margin: Net Profit after Tax .74%.607 RM 882.43% In this case.3903 gross profit for every RM1 of sale made.30% (F) The differences of gross profit margin between the years 2012 to 2013 is 1.25%.179 = 18. It shows the efficiency of the company in controlling its cost of goods sold is better in 2012 compared to 2013.202 RM 982.948 RM 982. A ratio of 39.a) Gross Profit Margin: Gross Profit Sales  2013 RM 373.74% = 18.Dividend Preference Share x100 . b) Operating Profit Margin: Earnings before interest and tax Sales  2013 RM 184.179 = 38.

99% Since the year 2012 has a lower firm's leverage that 2013.998 2012 RM 123.Dividend Preference Share x100 Common Equity  2013 RM 138.264 RM 187.55% compared to 2012 with on 57. .686 2012 RM 123.40% = 30. e) Return on Equity: Net Profit after Tax .179 = 14.08%. Dutch Lady shows a slightly higher than in 2012. d) Return on Assets: Net Profit After Tax .07% = 13.461 2012 RM 123.264 RM 416.380 RM 403.55% = 57.58% It indicates the management's ability to make profits from the firm investments in assets.08% Return on equity is used to measure the profit earned by the common stockholders from their investments in the company.134 = 73.463 = 94. in 2013 the company has a higher return on profit with 73.Sales  2013 RM 138. its low net profit margin is basically due to higher operating expenses. In this case.380 RM 882.264 RM 982.Dividend Preference Share x100 Total Sales  2013 RM 138. In 2013.380 RM 216.