A) Stakeholders

One of the stakeholders who would utilize the annual report to make certain decision

is business owner. Business owner is an individual who owns a business whether it

can be small or large and also attempt to profits from the company. After viewing

annual report of the company, they can decide whether to expand, continue or close

down the business.

Moreover, an investor is any person who commits capital with the expectation

of financial returns. Investors utilize investments in order to grow their money and/or

provide an income during retirement, such as with an annuity. A wide variety of

investment vehicles exist including (but not limited to) stocks, bonds, commodities,

mutual funds, exchange-traded funds (ETFs), options, futures, foreign exchange, gold,

silver, retirement plans and real estate. Investors typically perform technical and/or

fundamental analysis to determine favorable investment opportunities, and generally

prefer to minimize risk while maximizing returns.

B) Accounting Concepts

The first accounting concept used by Farm’s Best Berhad is Accounting Period. The

purpose of accounting period is to make a comparison and analysis on a company

report over a period of time. As example the report of Farm’s Best Berhad such as

Statement of Financial Position, Statement of Profit or Loss, Statement of

Comprehensive Income, and other report starts at 1 January and ends in every 31

December.

Another accounting concept used by the Farm’s Best Berhad is Consistency.

Purposes of concept consistency is to ensure that the accounting reports of a business

are comparable from period to period and prevent misleading profits arising from
differing accounting methods, from being reported. As example the report of Farm’s

Best Berhad every accounting report are ends on 31 December.

Moreover, Farm’s Best Berhad also used concept of Matching Principle. This

accounting concept is to match the revenue and expenses to calculate the revenue

earned. As example, at the end of 31 December 2015, the revenue earned by Farm’s

Best Berhad is RM 346,763 and expenses and others cost around RM 38,806. The

total loss of the year of Farm’s Best Berhad is RM15,535.

C) Company Performance and Financial Position

Statement of Comprehensive Income

Revenue

REVENUE
2015(RM) 2014(RM)

500,000
400,000
300,000
200,000
100,000
0

2015(RM) 2014(RM)

Revenue 346,763 418,426

Comparison of total revenue between year 2015 and 2014.

= RM 346,763 – RM 418,426

= -RM 71,663
Percentage increase in revenue from year 2014 to 2015.

= -RM 71,663 / RM 418,426 * 100%

= -17.13%

From the graph above, the comparison between year 2014 and year 2015. This

obviously shows the total revenue decrease from year 2014 to year 2015, there is a

loss of RM418,426 to RM346,763. The percentage of increase rate is -17.13%. The

company calculated the other operating income and the percentage of rise rate is

207.63 which from RM5,428 to RM16,698. The reason for the deduction of total

revenue is due to the number of consumers had decreased from year 2014 to year

2015 in Malaysia. In this case, the hotel operations’ revenue of this company had

decreased as the number of sales of completed houses and development revenue had

decreased between year 2014 and year 2015.

Expenses

EXPENSES
2015(RM) 2014(RM)

400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
Cost of Sales Selling and Administrative Finance Costs Taxation
Marketing Expenses
Expenses
 2015(RM) 2014(RM)

Cost of Sales 322,269 362,262

Selling and Marketing Expenses 12,717 14,814

Administrative Expense 25,825 22,532

Finance Costs 18,449 18,813

Taxation 264 3,817

TOTAL 379,524 422,238

It is also a decrease in expenses by RM42,714 from year 2014 to 2015. The reason of

the decrease in expenses is due to the decrease in cost of sales by RM39, 993,

decrease in selling and marketing expenses by RM2,097 and decrease in finance costs

by RM364 but there is an increase in administrative expenses by RM3,293.

Profit

PROFIT
2015(RM) 2014(RM)

2,000
0
-2,000
-4,000
-6,000
-8,000
-10,000
-12,000
-14,000
-16,000
Years Net profit (RM)

2014 1,616

2015 (15,535)

Difference of net profit between 2014 and 2015

= -RM15,535-RM1,616

= -RM17,151

Percentage=-RM17,151 / RM1,616 * 100%

=-1061.32%

Years Gross profit (RM)

2014 56,164

2015 24,494

Difference of gross profit between 2014 and 2015

=RM24,494-RM56,164

= -RM31,670

Percentage= -RM31,670 / RM56,164 * 100%

 = -56.39%

Gross profit has increased from RM56,164 (2014) to RM24,494 (2015). The decrease

in gross profit is due to the significant reduction in revenue about RM71,663.

However, since there is a relatively high increase in other expenses, especially in

administrative expenses RM3,293. This has led to the overall decrease in net profit.

Net profit has reduced for RM21,232 from 2014 to 2015.

Lastly, we compare about the net profit after taxation. Net profit after taxation

in year 2014 is RM1,616 and in year 2015 is –RM15,535. It is decreased by 8.61% in

a year. Net profit after taxation is influenced by revenue, cost of sales, other income,

and other expenses.

Total Asset

TOTAL ASSET
2015(RM) 2014(RM)

500,000

400,000

300,000

200,000

100,000

0
Total Non - Current Asset Total Current Asset Total Asset
 2015(RM) 2014(RM)

Total Non – Current Asset 120,009 141,089

Total Current Asset 280,605 272,374

Total Asset 400,614 413,463

From the graph above shown the comparison between year 2014 and year 2015. That

obviously shows the total assets decreased from year 2014 to year 2015, RM413,463

drops to RM400,614 and the percentage of drop rate from 2014 to 2015 is 3.11%. The

company calculated the property, plant and equipment depreciated from RM136,537

to RM115,488. The total current assets increased from year 2014 to year 2015,

RM272,374 to RM280605. This is because the amount of biological assets increased

RM778 and other receivables increased RM26,306 from year 2014 to 2015. Although

the number of current assets is greater than previous year, 2014, the total assets of

year 2015 still less than 2014 because the amount of non-current assets is mostly

decreased from year 2014 to 2015.

Total Liabilities

TOTAL LIABILITIES
2015(RM) 2014(RM)

400,000
300,000
200,000
100,000
0
Total Current Liabilities Total Non - Current Total Liabilities
Liabilities
 2015 (RM) 2014 (RM)

Total Current Liabilities 243,714 234,802

Total Non - Current Liabilities 76,301 78,009

Total Liabilities 320,015 312,811

The graph shown the liabilities on year 2014 is RM312,811 and year 2015 has

increasing RM7,204 same as 2.30% become RM320,015. Next, borrowing in non-

current liabilities regard as acquisition and it has decreased from RM78,009 to

RM76,301 and the difference in percentage is 2.19%. Therefore, the largest

influenced in one of liabilities is trade and other payables. The debts from RM47,156

raise to RM65,294 totally raise up 38.46% such a huge difference. Hence, the

company have to bear the higher debts compared with previous year. Borrowing in

current liabilities has shown increasing from RM234,802 to RM243,714 the

percentage nearly 3.80%.

 TOTAL EQUITY
2015(RM) 2014(RM)

120,000

100,000

80,000

60,000

40,000

20,000

0
Total Equity

Years Total Equity (RM)

2014 100,652

2015 80,599

From the graph above, show the comparison between year 2014 and year 2015. This

significantly shows the total equity decrease from year 2014 to year 2015 which there

is an decrement of RM10,652 to RM80,599 and the percentage of drop rate is 19.92%.

This company calculated the equity attributable to owners of the parents decreased

from year 2014 to year 2015, there is a decrement in amount of RM95,147 to

RM79,376. The percentage of decrement is 16.58%. Besides that, this company

calculated the accumulated losses from year 2014 to year 2015, there is an increment

in amount of RM32,052 to RM3,162. The percentage of increment of accumulated

losses is 49.20%. The reason for the decrement of total equity in year 2014 is loss for

financial year increased and the reserves available for sale decreased.
D) Decision

In my opinion, I think I will not invest in Farm’s Best Berhad because the revenue of

Farm’s Best Berhad had been decreased from year 2014 RM418,426 dropped to

RM346,763 for year 2015, which had total decreased RM71,663 (-17.13%).

Moreover, the profit of the year 2014 to 2015 also decreased from RM1616 to

(RM15,535), had been decreased (RM13,919). The loss of the year decreased that

mean shareholder of the Company will suffer loss. Besides that, the cost of the sales

also decreased from year 2014 to 2015, RM362,262 decreased to RM322,269, that

had been decreased RM39,993. Based on this information I know that the production

of Farm’s Best Berhad dropped. Another information of that showing production of

Farm’s Best Berhad are falling and dropping is non-current assets of the Company

decreased from 2014 that is RM141,089 to RM120,009 had been decreased

RM21,080, (-0.15%). Farm’s Best Berhad also purchased land held for property, plant

and equipment (-0.15%), land use rights (-0.07%), deferred tax assets, (-0.02%). I will

not invest in Farm’s Best Berhad because the Company suffer loss. As a shareholder,

I will not gain as much dividend as expected. This had made me believe that Farm’s

Best Berhad cannot give me more revenue if me is one of the shareholder of the

company.