Business Accounting Assignment

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Programme : JLB22123
Course Code & Name : Business Accounting
Course Lecturer(s) : Mr Khairul Firdaus Hj. Adrutdin
Submission Title : Financial Statement Analysis
Deadline : Day 10 Month 11 Year 2020 Time 5 PM
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3 November 2020 Mohd Amirul Shahreen Bin Azmi 57212220023
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UNIVERSITI KUALA LUMPUR - MALAYSIAN INSTITUTE
OF INDUSTRIAL TECHNOLOGY (UNIKL MITEC)
Individual Assignment: GDEX Financial Statement Analysis
WEB20202 / Business Accounting
Prepared by:
Name Mohd Amirul Shahreen Bin Azmi

Student ID 57212220023
Prepared for:
Mr Khairul Firdaus Hj. Adrutdin
Submission date: 11th November 2020

Table of Contents
Abstract............................................................................................................................................1
1.0 Introduction................................................................................................................................1
1.1 Company Gdex overview.............................................................................................................1
2.0 Problem statement and discussion.............................................................................................2
2.1 Vertical Analysis......................................................................................................................3-10
2.2 Horizontal Analysis...............................................................................................................11-20
2.3 Ratio analysis........................................................................................................................21-28
2.4 Ratio analysis definition........................................................................................................29-30
2.4.1 Purposes........................................................................................................................31-34
3.0 Strategy & Recommendation....................................................................................................32
3.1 Decisions on operations.............................................................................................................33
3.2 Management Decisions........................................................................................................33-34
3.3 Economic Decisions..............................................................................................................34-35
4.0 Capital budgeting & Financing Decision....................................................................................36
4.1 Capital budgeting..................................................................................................................36-37
4.1 Financing decision.................................................................................................................37-38
4.1 Different between capital budgeting and financing decision.....................................................38
5.0 Conclusion................................................................................................................................39
6.0 References................................................................................................................................40
List of table
 Table 2.1.1 Gdex Financial position analysis 2019 & 2018

 Table 2.2.4 Gdex Income Statement analysis 2019 & 2018
 Table 2.3.1 Ratio analysis Gdex 2019
List of figure
Figure 4.1 Importance of capital budgeting

Figure 2.5 formula ratio analysis
Asbtract
To analyses financial statement company Gdex Carrier Bhd. Financial analysis

includes selecting, analyzing, and interpreting the financial data and other information that is
appropriate to help to determine a company's operating results and financial position. The
operating output of an enterprise is an indicator of how well an enterprise has used its capital,
both tangible and intangible, to make a return on its investment. The company financial
position is a measure of its capacity to meet its obligations, for example, the prompt payment
of interest on its debt. In analyzing financial details, the analyst has several resources
available. These instruments include an overview of the income statement, balance sheet and
financial ratio. Also, quantitative analysis. The analyst needs to understand how to use these
resources most efficiently, along with economics and accounting knowledge.
This analysis to study Your company was working a few years ago. However, you
still have a range of other problems to deal with, especially with the cash position. After that,
approached the bank to help within capital injection via a loan. Therefore, need a good
financial position and review company financial statement to determine the business results.
How to interpret financial statement in fact.
1.0 Introduction
Financial statements are reports that the management of a company creates to present
its financial results and status at a time. A general collection of financial statements typically
contains a balance sheet, income statement, equity statement and cash flows statement. These
statements are meant to provide consumers outside the company, including investors and
creditors, with more detail on the financial positions of the company. Publicly traded
companies are also expected to send these statements to regulatory agencies promptly, along
with others. For most decision-makers, financial statements are the primary source of
financial information. Therefore, accounting and reporting focus the accuracy, reliability, and
relevance of the details on these financial statements.
1.1 Company Gdex overview
GD Express Carrier Bhd is a Malaysian-based investment holding company firm

based in Malaysia. Express delivery and logistics are the segments of the business. The
Company, through its subsidiaries, provides express distribution services, transportation
services, computer rental equipment for the related company, installations and assets
management services, insurance services and operations in logistics. Its domestic express
delivery services include the delivery of the next day, SDD service for the same day,
diplomatic service, bulk service, reverse charge service, return order return service for
delivery, late collection, and early delivery. International distribution service and freight
service are included in its international express carrier services. The logistics facilities include
storage and distribution, temperature control rooms, packaging, and clearance. The company
has a surge of about 650 trucks and small carriers. firm based in Malaysia. Express delivery
and logistics are the segments of the business.
The Company, through its subsidiaries, provides express distribution services,

transportation services, computer rental equipment for the related Company, installations and
assets management services, insurance services and operations in logistics. Its domestic
express delivery services include the delivery of the next day, SDD service for the same day,
diplomatic service, bulk service, reverse charge service, return order return service for
delivery, late collection, and early delivery. International distribution service and freight
service are included in its international express carrier services. The logistics facilities include
storage and distribution, temperature control rooms, packaging, and clearance. The Company
has a surge of about 650 trucks and small carriers.
1
2.0 Problem statement and discussion
Your company was working a few years ago. However, you do have some other concerns
that have to be discussed in particular regarding the cash situation. You then went to the bank
to assist you with the capital injection via a loan. As usual, the bank will say that you need a
healthy financial position and will review your financial statement to assess your business
efficiency. How do you interpret your financial statement in fact?
2.1 Vertical Analysis
Vertical analysis is a method of analyzing financial statements that list each line item as a
percentage of a base figure within the statement. The first line of the statement always shows the
base figure at 100%, with each following line item representing a percentage of the whole. For
example, each line of an income statement represents a percentage of gross sales, while each line
of a cash flow statement represents each cash inflow or outflow as a percentage of total cash
flows.
By using vertical analysis on an income statement, balance sheet or cash flow

statement to understand the proportions of each line item to the whole, understand key trends
that occur over time, compare multiple companies of varying sizes or compare a company's
financial statements to averages within their industry.
Using percentages to perform these financial analytics and comparisons makes the
data you gather more meaningful and easier to understand. Because the vertical analysis
method uses percentages to represent each line item, you can proportionately compare a
company's relative account balances to those of another company or the company's industry
average regardless of whether the total sales for the other company or industry average are
higher or lower than the company you are analysing.
To perform a vertical analysis on a financial statement that does not already show
each line item as a percentage, you can find the percentage of each line item by dividing the
line item amount by the base figure and multiplying the resulting dividend by 100.
In a vertical analysis the percentage is computed by using the following formula:
Percentage of base = (Amount of individual item/Amount of base item) x 100

Comparative Statements of Financial Position Gdex 2019 & 2018
2019 2018
Amount (RM) Percentage Amount (RM) Percentage
ASSETS
Non-Current Assets
Property, plant and equipment 108,637,618 60% 85,850,329 60.6%
Prepaid lease payments 22,612,330 12.5% 21,507,003 15.2%
Investment properties 18,025,000 10.1% 17,900,000 12.6%
Investment in subsidiary companies - -
Investment in associates 29,043,998 16.0% 5,676,991 4.0%
Investment in convertible bonds - 10,380,000 7.3%
Goodwill arising from consolidation - 397,385 0.3%
Other investment - -
Loan to an associate 2,000,000 1.1% -
Investment in redeemable convertible
preference shares 500,000 0.3% -
Total Non-Current Assets 180,818,946 100% 141,711,708 100%
Current Assets
Inventories - at cost 1,465,802 0.4% 1,078,365 0.3%

Trade receivables 51,538,867 13.6% 51,011,122 13.6%
Other receivables and prepaid expenses 22,777,330 6.1% 17,557,823 4.7%
Amount owing by subsidiary companies - -
Tax recoverable 19,331,553 5.2% 3,383,405 0.9%
Short term funds 12,200,014 3.3% 17,035,863 4.5%
Deposits with licensed banks 237,443,402 63.3% 253,636,792 67.4%
Cash and bank balances 30,059,509 8.0% 32,640,178 8.7%
Total Current Assets 374,816,477 100% 376,343,548 100%
Total Assets 555,635,423 518,055,256

EQUITY AND LIABILITIES
Capital and Reserves
Issued capital 337,887,802 70.5% 327,809,125 72.9%

Reserves 141,276,590 29.5% 121,872,075 27.1%
Total Equity 479,164,392 100% 449,681,200 100%
Non-Current Liabilities
Hire-purchase payables 20,465,587 75.6% 26,063,202 83.2%

Provision for retirement benefits 321,314 1.2% 325,682 1.0%
Deferred tax liabilities 6,272,790 23.2% 4,942,829 15.8%
Total Non-Current Liabilities 27,059,691 100% 31,331,713 100%
Current Liabilities
Trade payables 2,881,356 5.8% 2,036,816 5.5%

Other payables and accrued expenses 26,189,408 53.0% 19,665,639 53.1%
Amount owing to subsidiary companies - -
Hire-purchase payables 19,721,613 39.9% 15,155,343 40.9%
Tax liabilities 618,963 1.3% 184,545 0.5%
Total Current Liabilities 49,411,340 100% 37,042,343 100%
Total Liabilities 76,471,031 68,374,056

Total Equity and Liabilities 555,635,423 518,055,256
Table 2.1.1 Gdex Financial position analysis 2019 & 2018

2018 2017
ASSETS
Non-Current Assets
Property, plant and equipment 85,850,329 60.58% 68,061,392 64.12%
Investment properties 17,900,000 12.63% -
Investment in an associate 5,676,991 4.01% 5,660,831 5.3%
Investment in convertible bonds 10,380,000 0.07% 10,380,000 9.8%
Goodwill arising from consolidation 397,385 0.28% -
Total Non-Current Assets 141,711,708 92.75% 106,140,329 100%
Current Assets

Other receivables and prepaid expenses 17,557,823 4.7% 12,214,674 3.3%
Amount owing by subsidiary - -
companies
Tax recoverable 3,383,405 0.9% 1,915,968 0.5%
Short term funds 17,035,863 4.5% -
Deposits with licensed banks 253,636,792 67.3 289,578,088 77.9%
518,055,256 478,031,075
Total Assets

Issued capital 327,809,125 72.9% 313,836,577 73.6%
Reserves 121,872,075 27.1% 112,311,019 26.4%
Total Equity 449,681,200 100% 426,147,596 100%
Hire-purchase payables - non-current

portion 26,063,202 83.2% 21,281,685 83.1%
Current
Liabilities
Trade payables 2,036,816 5.5% 3,184,815 12.1%

Amount owing to subsidiary - -
companies
Hire-purchase payables - current 15,155,343 40.9% 8,392,359 31.9%
portion
Tax liabilities 184,545 0.5% 465,956 1.8%

2017 2016
ASSETS
Non-Current Assets
Property, plant and equipment 68,061,392 64.1% 47,324,050 69.6%
Investment in an associate 5,660,831 5.3% -
Investment in convertible bonds 10,380,000 9.8% -
Total Non-Current Assets 106,140,329 100% 68,039,689 100%
Current Assets

Other receivables and prepaid 12,214,674 3.3% 8,817,836 2.4%
expenses
companies
Tax recoverable 1,915,968 0.5% 1,514,900 0.4%
Deposits with licensed banks 289,578,088 77.9% 286,096,997 78.0%
Total Assets 478,031,075 434,592,409

Issued capital 313,836,577 73.6% 69,161,977 17.9%

Reserves 112,311,019 26.4% 317,646,934 82.1%
Total Equity
426,147,596 100% 386,808,911 100%
portion 21,281,685 83.1% 13,687,932 60.3%
Term loan - non-current portion - 5,715,891 25.2%
Current Liabilities
Trade payables 3,184,815 12.1% 2,122,655 8.5%

companies
Hire-purchase payables - current 8,392,359 31.9% 5,101,097 20.3%
portion
Term loan - current portion - 945,561 3.8%
Tax liabilities 465,956 1.8% 359,984 1.4%

Comparative Income Statement of Gdex 2019 & 2018
Revenue 313,857,807 292,988,532
Other operating income 19,916,366 11,729,351

Direct costs (57,524,917) (49,326,900)
Staff costs (173,470,901) (153,132,356)
Depreciation of property, plant and
equipment (18,772,871) (14,416,373)
Amortisation of prepaid lease (531,108) (531,103)
payments
Other operating expenses (43,205,335) (39,897,026)
Impairment loss on goodwill (397,385) (948,692)
Share of (loss)/profits of associates (5,440,282) 16,160
Finance costs (2,059,272) (1,873,785)
Profit before tax 32,372,102 44,607,808
Income tax credit/(expense) 95,652 (20,980,442)
Profit for the year 32,467,754 23,627,366
Table 2.1.4 Gdex Income Statement analysis 2019 & 2018

Revenue 292,988,532 250,509,875
Direct costs (49,326,900) (39,407,673)

Staff costs (153,132,356) (131,991,270)
equipment (14,416,373) (10,876,699)
Amortisation of prepaid lease payments (531,103) (520,866)
Impairment loss on goodwill (948,692) -
Share of profits of an associate 16,160 160,831
Finance costs (1,873,785) (1,392,920)
Income tax expense (20,980,442) (7,645,086)

Profit for the year 23,627,366 36,829,371

Revenue 250,509,875 219,757,459
Direct costs (39,407,673) (38,725,183)

Staff costs (131,991,270) (108,650,753)
Depreciation of property, plant and equipment (10,876,699) (8,940,117)
Share of profits of an associate 160,831 -
Finance costs (1,392,920) (1,494,579)
Profit before tax

44,474,457 40,182,873
Profit for the year

36,829,371 34,444,251
Other comprehensive income
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translating foreign
operations
109,523 115,382
Items that will not be reclassified
subsequently to profit or loss - -

2.2 Horizontal analysis
Horizontal analysis is a form of financial accounting, which indicates improvements

over some time in the amounts of the accompanying financial statements. It is a valuable
method for determining pattern situations. The reports are used in horizontal analyses for two
or more cycles. The earliest era is generally used as the base period, and for all subsequent
periods, the statements are contrasted with items on the information of the base period. The
adjustments are typically seen in dollars and percentages.
The widely agreed accountability standards (GAAP) are focused on financial

consistency and comparability. The ability to reliably analyse the financial statements of an
enterprise over a while is reliable since accounting processes and applications remain
consistent. Comparability is the ability to review two or more independent financial firms’
side by side. The horizontal analysis not only increases the overall consistency of a business
over time but also improves the comparability of a company's growth with its rivals.
Figure shows the horizontal analysis formula.

Increase or (- Decrease)
2019 (RM) 2018 (RM) Amount (RM) Percent (%)
ASSETS
Non-Current Assets
Property, plant and equipment 108,637,618 85,850,329 22,787,289 26.5
Prepaid lease payments 22,612,330 21,507,003 1,105,327 5.1
Investment properties 18,025,000 17,900,000 125,000 0.7
Investment in associates 29,043,998 5,676,991 23,367,007 411.6
Investment in convertible bonds - 10,380,000
Goodwill arising from consolidation - 397,385
Other investment - -
Loan to an associate 2,000,000 -
Investment in redeemable convertible
preference shares 500,000 -
Total Non-Current Assets 180,818,946 141,711,708 39,107,238 27.6
Current Assets
Inventories - at cost 1,465,802 1,078,365 387,437 35.9

Trade receivables 51,538,867 51,011,122 527,745 1.0
Other receivables and prepaid expenses 22,777,330 17,557,823 5,219,507 29.7
Amount owing by subsidiary companies - -
Tax recoverable 19,331,553 3,383,405 15,948,148 471.3
Short term funds 12,200,014 17,035,863 -4,835,849 -28.4
Deposits with licensed banks 237,443,402 253,636,792 -16,193,390 -6.4
Cash and bank balances 30,059,509 32,640,178 -2,580,669 -70.9
Total Current Assets 374,816,477 376,343,548 -1,527,071 -0.4
Total Assets 555,635,423 518,055,256

Issued capital 337,887,802 327,809,125 10,078,677 3.1

Reserves 141,276,590 121,872,075 1,940,515 15.9
Total Equity 479,164,392 449,681,200 29,404,515 6.6
Hire-purchase payables 20,465,587 26,063,202 -5597615 -21.5

Provision for retirement benefits 321,314 325,682 -4368 -1.3
Deferred tax liabilities 6,272,790 4,942,829 1329961 26.9
Total Non-Current Liabilities 27,059,691 31,331,713 -4,272,022 -13.6
Current Liabilities
Trade payables 2,881,356 2,036,816 844,540 41.5

Other payables and accrued expenses 26,189,408 19,665,639 6,523,769 33.2
Amount owing to subsidiary companies - -
Hire-purchase payables 19,721,613 15,155,343 4,566,270 30.1
Tax liabilities 618,963 184,545 269.5
Total Current Liabilities 49,411,340 37,042,343 12,368,997 33.4


Increase or (-Decrease)
2018 (RM) 2017 (RM) Amount (RM) Percent (%)
ASSETS
Non-Current Assets
Property, plant and equipment 85,850,329 68,061,392 17788937 26.1
Prepaid lease payments 21,507,003 22,038,106 -531103 -23.7
Investment properties 17,900,000 -
Investment in an associate 5,676,991 5,660,831 16160 0.3
Investment in convertible bonds 10,380,000 10,380,000
Goodwill arising from consolidation 397,385 -
Total Non-Current Assets 141,711,708 106,140,329 35,571,379 33.5
Current Assets
Inventories - at cost 1,078,365 1,554,480 -476115 -30.62

Trade receivables 51,011,122 49,867,134 1143988 2.3
Other receivables and prepaid expenses 17,557,823 12,214,674 5343149 43.7
companies
Tax recoverable 3,383,405 1,915,968 1467437 76.6
Short term funds 17,035,863 -
Deposits with licensed banks 253,636,792 289,578,088 -35,941,296 12.4
Cash and bank balances 32,640,178 16,760,402 15,879,776 94.7
Total Current Assets 376,343,548 371,890,746 4,452,802 1.2
518,055,256 478,031,075
Total Assets

Issued capital 327,809,125 313,836,577 13971548 4.5
Reserves 121,872,075 112,311,019 110661056 98.5
Total Equity 449,681,200 426,147,596 23533604 5.52

portion 26,063,202 21,281,685 4781517 22.5
Provision for retirement benefits 325,682 281,722 43960 15.6
Total Non-Current Liabilities 31,331,713 25,610,607 5721106 22.3
Current
Liabilities
Trade payables 2,036,816 3,184,815 -1147999 -36.1

Other payables and accrued expenses 19,665,639 14,229,742 5435897 38.2
companies
Hire-purchase payables - current 15,155,343 8,392,359 6762984 80.6
portion
Tax liabilities 184,545 465,956 -281411 -60.4
Total Current Liabilities 37,042,343 26,272,872 10769739 41.04

2017 2016 Amount (RM) Percent (%)
ASSETS
Non-Current Assets
Property, plant and equipment 68,061,392 47,324,050 20737342 43.8
Prepaid lease payments 22,038,106 20,715,639 1322467 6.4
Investment in an associate 5,660,831 -
Investment in convertible bonds 10,380,000 -
Total Non-Current Assets 106,140,329 68,039,689 38100640 56.1
Current Assets
Inventories - at cost 1,554,480 1,216,203 338277 27.8

Trade receivables 49,867,134 47,560,486 2306648 4.8
Other receivables and prepaid 12,214,674 8,817,836 3396838 38.5
expenses
companies
Tax recoverable 1,915,968 1,514,900 401068 26.5
Deposits with licensed banks 289,578,088 286,096,997 3481091 1.2
Cash and bank balances 16,760,402 21,346,298 -4585896 -21.57
Total Current Assets 371,890,746 366,552,720 5338026 1.8
Total Assets 478,031,075 434,592,409

Issued capital 313,836,577 69,161,977 244,674,600

Reserves 112,311,019 317,646,934 -205335915 -64.6
Total Equity 426,147,596 386,808,911 39338685 0.1
portion 21,281,685 13,687,932 7593753 55.7
Term loan - non-current portion - 5,715,891
Provision for retirement benefits 281,722 246,348 35374 14.4
Total Non-Current Liabilities 25,610,607 22,697,871 2,912,736 12.8
Current Liabilities
Trade payables 3,184,815 2,122,655 1062160 50.0

Other payables and accrued expenses 14,229,742 16,556,330 -2326588 14.1

companies
Hire-purchase payables - current 8,392,359 5,101,097 3291262 64.5
portion
Term loan - current portion - 945,561
Tax liabilities 465,956 359,984 105972 29.4
Total Current Liabilities 26,272,872 25,085,627 1187245 4.7

Increase or (-decrease)
2019 2018 Amount (RM) Percentage (%)
Revenue 313,857,807 292,988,532 2,086,9275 7.0
Other operating income 19,916,366 11,729,351 818,7015 69.7

Direct costs (57,524,917) (49,326,900) 819,8017 16.21
Staff costs (173,470,901) (153,132,356) 2,033,8545 13.28
equipment (18,772,871) (14,416,373) 4,356,498 30.22
Amortisation of prepaid lease (531,108) (531,103)
payments
Other operating expenses (43,205,335) (39,897,026) 3,308,309 8.29
Impairment loss on goodwill (397,385) (948,692)
Share of (loss)/profits of associates (5,440,282) 16,160
Finance costs (2,059,272) (1,873,785) 185487 9.89
Income tax credit/(expense) 95,652 (20,980,442)
Profit for the year 32,467,754 23,627,366 8840388 37.41

Percentage
2018 2017 Amount (RM)
(%)
Revenue 292,988,532 250,509,875 42478657 16.9
Other operating income 11,729,351 12,254,164 -524813 -4.28
Direct costs (49,326,900) (39,407,673) 9919227 25.17

Staff costs (153,132,356) (131,991,270) 21141086 16.01
equipment (14,416,373) (10,876,699) 3539674 32.54
Other operating expenses (39,897,026) (34,260,985) 5636041 16.4
Impairment loss on goodwill (948,692) -
Share of profits of an associate 16,160 160,831
Finance costs (1,873,785) (1,392,920) 480865 34.5

Profit for the year 23,627,366 36,829,371 -13202005 -35.84

Amount Percentage
2017 2016
(RM) (%)
Revenue 250,509,875 219,757,459 30752416 13.9%
Other operating income 12,254,164 6,543,974 5710190 87.26
Direct costs (39,407,673) (38,725,183) 682490 1.76

Staff costs (131,991,270) (108,650,753) 23340517 21.48
Depreciation of property, plant and equipment (10,876,699) (8,940,117) 1936582 21.66
Other operating expenses (34,260,985) (27,807,544) 6453441 23.20
Share of profits of an associate 160,831 -
Finance costs (1,392,920) (1,494,579) -101659 -6.8
Profit before tax

44,474,457 40,182,873
Profit for the year 36,829,371 34,444,251 2385120 6.92
Other comprehensive income

Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translating foreign
operations 109,523 115,382
Items that will not be reclassified
subsequently to profit or loss - -

2.3 Ratio analysis
Financial ratios are helpful instruments that help businesses and investors evaluate and
compare relationships between various financial information pieces in the history, industry or
the entire sector of a given business. Taken from the income statement, the balance sheet and
cash flow report of a company, analysts can measure different types of financial ratios for
various types of business intelligence and details. Table 2.3.1, 2.3.2, 2.3.3 & 2.3.4 show the
ratio analysis of Gdex Berhad in 2019, 2018, 2017 and 2016.
Ratio analysis 2019

Liquidity
Working capital Current Ratio
= 374,816,477 - 49,411,340 = 374,816,477

= 325,405,137 49,411,340
= 7.58
Quick ratio
= (374,816,477-1,465,802-22,777,330)
49,411,340
= 7.09
Efficiency
Account receivable (AR) turnover Average collection period
313,857,807 = 365
= (51,011,122+51,538,867) 6.22
2
= 58.69
= 6.22
Inventory turnover Asset turnover
= 313,857,807
536845339.5
= 0.58
Profitability
Gross profit margin Net profit margin
= 313,857,807-(57,524,917+173,470,901) 313,857,807-(43,205,335+173470901+57524917+95,652)
313,857,807 313,857,807
= 7.93
= 0.26
Return on asset Return on owner’s equity
= 39,561,002 = 39,561,002
(518,055,256 + 555,635,423) 464422796
2 = 0.08
= 0.07
Return on owners equity’s ordinary share Earning per share
N/A N/A
Price earning ratio Dividend yield
N/A N/A
Dividend payout ratio
= 1,126,565
39,561,002
= 0.03
Debt management
Interest coverage ratio Debt ratio
N/A = 76,471,031
555,635,423
= 0.14
Equity ratio Debt equity ratio
= 479,164,392 = 76,471,031
555,635,423 479,164,392
= 0.86 = 0.16
Table 2.3.1 Ratio analysis Gdex 2019

Ratio analysis 2018
Liquidity
= 376,343,548- 37,042,343 = 376,343,548

= 339301205 37,042,343
= 10.16
Quick ratio
= (292,988,532-1,078,365-17,557,823)
37,042,343
= 7.40
Efficiency
292,988,532 = 365
= (49,867,134+51,011,122) 5.81
2
= 62.82
= 5.81
N/A = 292,988,532
498043165.5
= 0.59
Profitability
= 292,988,532-(49,326,900+153,132,356) 292,988,532-
292,988,532 (39,897,026+153,132,356+49,326,900+20,980,442)
= 0.31 292,988,532
= 0.10
= 29,651,808 = 39,561,002
(518,055,256+478,031,075) 437914398
2 = 0.09
= 0.05
N/A N/A
N/A N/A
= 1,126,565
39,561,002
= 0.03
Debt management
N/A = 68,374,056
518,055,256
= 0.13
= 449,681,200 = 68,374,056
518,055,256 449,681,200
= 0.86 = 0.15

Ratio analysis 2017
Liquidity
= 371,890,746-26,272,872 = 371,890,746
= 345,617,874 26,272,872
= 14.15
Quick ratio
= (371,890,746-1,554,480-12,214,674)
26,272,872
= 13.63
Efficiency
250,509,875 = 365
= (49,867,134+47,560,486) 6.22
2
= 142.02
= 2.57
N/A = 250,509,875
456311742
= 0.54
Profitability
= 250,509,875-(171398943) = 250,509,875-
313,857,807 (34,260,985+171398943+7,645,086)
= 0.32 250,509,875
= 0.14
= 37204861 = 37204861
(478,031,075 434,592,409) 406478253.5
2 = 0.09
= 0.08
N/A N/A
N/A NA
= 1,126,565
39,561,002
= 0.03
Debt management
N/A = 51,883,479
478,031,075
= 0.11
= 426,147,596 = 51,883,479
478,031,075 426,147,596
= 0.89 = 0.12

Ratio analysis 2016
Liquidity
= 366,552,720- 47,783,498 = 366,552,720

= 318769222 47,783,498
= 7.67
Quick ratio
= (219,757,459-1,216,203-8,817,836)
47,783,498
= 4.39
Efficiency

47,324,050 = 365
= (51,011,122+51,538,867)
2
6.22
= 0.97 = 376.2
N/A = 219,757,459
311889054.5
= 0.70
Profitability 434,592,409+189,185,700
= 313,857,807-(57,524,917+173,470,901) = 313,857,807-
313,857,807 (43,205,335+173470901+57524917+95,652)
313,857,807
= = 7.93
= 39,561,002 = 39,561,002
(518,055,256 + 555,635,423) 464422796
2
= 0.07 = 0.08
= 39,561,002 = 39,561,002
(518,055,256 + 555,635,423) (518,055,256 + 555,635,423)
2 2
= 0.07 = 0.07

N/A N/A
= 1,126,565
39,561,002
= 0.03
Debt management
N/A = 47,783,498
434,592,409
= 0.10
= 386,808,911 = 47,783,498
434,592,409 386,808,911
= 0.89 = 0.12

2.4 Ratio analysis definition
Ratio analyses are a quantitative approach of analyzing the financial statements, such
as the balance sheet and income statement, to provide insights into a company's liquidity,
operating effectiveness, and profitability. The ratio analysis is a fundamental pillar of equity
analysis. Figure 2.5 shows ratio analysis formula.
Figure 2.5 formula ratio analysis retrieved from UniKL Mitec
2.4.1 Purposes
The ratio analysis uses for company to identify the condition of business position.
There are few purposes to analyze ratio analysis.
Comparisons. A comparison of a company's financial results with similar companies

in the industry is one of the applications of the ratio study to understand the role of a
company in the market. The achievement of financial ratios, such as prices/earnings, and its
relation to the ratios of the business will enable management to recognize market differences
and determine its competitive advantages, strengths, and weaknesses. The management will
then use the data to formulate decisions aimed at improving the position of the company in
the market.
Liquidity ratios calculate the capacity of a business to satisfy its debt obligations by
its current assets. If a company has financial problems and cannot pay its debts, it can turn its
assets into cash and use the capital to quickly payout of any outstanding debts. The quick
ratio, the cash ratio and the current ratio are some of the typical liquidity ratios. Banks,
creditors and suppliers are using liquidity ratios to determine whether a client can meet his
financial obligations as necessary.
Profitability ratios measure a company's profitability compared to its associated costs.

A higher rate of profitability relative to the previous financial reporting period indicates that
the organization improves financially. A profits ratio can be compared with the ratio of a
similar company to decide how profitable the company is in relation to its rivals. Some
examples of substantial returns on equity, return on assets, operating margin, gross margin,
and return on capital employed include.
Efficiency ratios dictate how efficiently the corporation uses its assets and liabilities
to produce revenue and benefit. They measure inventory use, equipment utilization, liabilities
turnover and equity use. These ratios are important because the company will make more
sales and income when the efficiency ratios increase. Some of the significant efficiencies
include asset turnover, inventory turnover, payable turnover, working capital turnover, fixed
asset turnover, and the turnover ratio for receivables.
3.0 Ratio analysis strategy
Explanation
Particular Year
2019 2018 2017 2016
Liquidity
 Working capital 325,405,137 339301205 345,617,874 318769222
 Current Ratio 7.58 10.16 14.15 7.67
 Quick ratio 7.09 7.40 13.63 4.39
Efficiency
 Account receivable (AR) 6.22 5.81 2.57 0.97
turnover
 Average collection period 58.69 62.82 142.02 376.2
 Inventory turnover
 Asset turnover 0.58 0.59 0.54
Profitability
 Gross profit margin 0.26 0.31 0.32
 Net profit margin 7.93 0.10 0.14
 Return on asset 0.07 0.05 0.08
 Return on owner’s equity 0.08 0.09 0.09
 Return on owners
equity’s ordinary share
 Earning per share
 Price earning ratio
 Dividend yield
 Dividend payout ratio 0.03 0.03
Debt management
 Interest coverage ratio
 Debt ratio 0.14 0.13 0.11 0.10
 Equity ratio 0.86 0.86 0.89 0.89
 Debt equity ratio 0.16 0.15 0.12 0.12
Based on ratio analysis that shown in table 2.5, we figure out that Company Gdex has to kate
further strategies in order to make their financial statement and business health going smooth
to show their statement to the bank for further loan. There are few strategies. Strategic
guidelines Recommendations for operational, administrative, and strategic decisions that can
be provided after the review of
3.1 Decisions on operations
 To maximize company Gdex s sales profits, it is necessary to determine the sales

price and, if possible, increase costs.
 Cash in a way that raises sales or reduces expenditures.
 To minimize the cost of products or services, the business should aim to buy higher
volumes and reduce the purchasing price.
 Even if suppliers' debts are lacking, a business can aim to get an early payment or
cash purchases discount.
3.2 Management Decisions
 Gdex Business had no big cash flow problem and seemed like fluctuation. The vital
issue of this business, however, is the unproductive or unprofitable use of company
sources. Efficient service must be made of the funds transferred to the company. High
sales profit was the key reason for the success achieved in the highest year.
 As the company loses revenue, capital does not have to be increased. Second,
appropriate precautions (reduced sales costs or improved sales revenues) need to be
taken to achieve The Organization's consistency to maximize income from the central
business segment. Otherwise, the capital increase would not be a precaution to aid the
survival of the business.
 In the case of an increase in capital, the use of this source becomes significant. For
example, if this cash flow is kept in the bank, no contribution will be made.
 In general, with respect to operating costs:
Gdex Business must obtain at least the sum of such expenditures to cover general
administrative costs. If a corporation cannot cover operating costs, it is likely that it can do so
only evenly. It is also necessary to strive for a higher profit (sales profit) target.
It is crucial to assess the composition of general administrative expenses. These
expenses are assumed to consist of fixed expenses such as the payment of staff and expenses.
Alternatives must be found to reduce these expenses. Can the same company efficiency be
done with few employees?
In other words, staff numbers must be reassessed, and any precaution taken to
maintain the same standard.
3.3 Economic Decisions
 A long-term loan can contribute to the long-term viability of the business and can be
converted to investments (such as the purchasing of properties for continuity). For
example, it may help to eliminate leasing costs and lower costs.
 This transferable source will not only lead to a long-term commitment through
relationships with suppliers that provide management feedback but also decrease the
sales cost of the business.
4.0 Capital Budgeting and Finance Decision
Financial management capital budgeting establishes a strategic business development

strategy. The financing structure determines how a strategic plan is payable-sometimes with
interest paid, but also with retained profits from a company or new investors paid. These two
principles operate hand in hand with the working capital of the company, which must remain
high so that the company can cover its operating costs over the following 12-month span of
the company.
4.1 Capital budgeting
Capital budgeting is the method of taking long-term asset allocation decisions. The
decision is taken whether to invest in a specific project or not since not all investment
opportunities are lucrative. The manager must therefore pick a project that gives a return rate
more excellent than the cost to fund such a project. That is why he must value the expense
and profit of a project. Plus, capital budgeting is the process performed by an organization to
assess future major projects or investments. The building of a new plant or a significant
investment in an external corporation are examples of projects involving a capital budget
before they are accepted or denied.
Gdex Carrier Bhd use capital budgeting to assess critical expenditures and initiatives
such as new buildings or machinery. The method consists of an analysis of the cash inflows
and outflows of a project to evaluate if the anticipated return meets a fixed criterion. The key
strategies for budgeting capital include decreased cash flow, payback, and review.
Larger businesses or more massive investments, depending on the acquisition, use

forecasts to assess potential cash flows. Estimating inflation accounts for the time factor. For
example, Gdex wants to open a new call center, the plan from the start of recruiting new
employees could take RM 500,000 and two years to execute. Executives must determine how
long it is fair for them to see the project start to pay back the budget. Figure 4.1 Sanjay Bulaki
Borad (2019) state in his article Importance of Capital Budgeting shows importance of capital
budgeting.
Figure 4.1 Importance of capital budgeting
4.2 Financing decision
The Financing Decision is yet another critical decision taken by the financial manager
concerning the organisation's financing mix. It concerns the borrowing and allocation of
funds needed for investment decisions. The decision to finance requires two sources where
the funds can be raised: the use of own money by an enterprise, such as share capital,
revenue, debenture, loan, bond, etc. The goal of the financial decision is to establish an
optimal capital structure,
i.e. an acceptable balance of debt and equity, to ensure trade-offs between risks and
shareholders' returns.
The debt-equity ratio leads to the efficiency of the company's funding decision. The
Finance Manager must consider the following points in making financial decisions:
 The risk involved collecting the funds. In the case of debt, the risk is higher compared
with equity.
 The expense included the collection of funds. The manager selected the source at the
lowest cost.
 The control level, which shareholders like, also defines the composition of the capital
structure of the organisation. They typically prefer the money borrowed because the
ownership is not diluted.
 The cash flow from the activities of the organisation also dictates the source from
which the funds are received. High cash flows allow debt to be lent as interest can be
paid quickly.
 It also specifies the source of the fund for the floating expense, for example, the
commission of the broker, the underwriters charge for raising the securities. Securities
with low costs must therefore be picked.
Thus a corporation should take a judicious decision as to when to collect the funds,
since more excellent use of the resources would result in a dilution of ownership and higher
debt contributes to a higher risk because fixed costs are charged on the borrowed funds, in the
form of interest.
4.3 Different between capital budgeting and financing decision
capital budgeting financing decision
 Capital budgeting assesses long-term  Financing decisions concern the

asset expenses and benefits. The availability of funds to fulfill the
method analyses and contrasts sales, small business ' financial
cash flows and risks related to the obligations. The costs of various
acquisition or enhancement of new finance sources, such as debt and
capital assets equity capital, should affect your
financing decisions.
5.0 Conclusion
One of the critical aspects of making the right investment decision is reviewing a
company's financial statements. The study of financial statements is a method for selecting,
analyzing, and interpreting financial information to determine the past, current and potential
financial results of a company. There is a range of questions on company issues, such as
whether it has debt repayment potential, whether financially sound or strained, has an apt
financial mix, is correct to provide shareholders with returns, the efficiency of revenue
production, and work capital management, among the significant issues to be examined more
thoroughly in financial reports. Although historical, the information used is intended to arrive
at potential predictions and approximate company results.
Based on GDEX financial statement analysis measures an organization's health and

viability and offers an understanding of how its business is conducted. Yet, it is essential to
note that there are many drawbacks to the financial statement review. Different accounting
techniques are used to adjust apparent health and benefit levels for better or worse by various
companies. Various analysts can obtain different results from the same data. Therefore, we
must conclude that the review of financial statements (though a big one) is just one
instrument during an investment decision.
We aware of the expected size analysis, which standardizes financial details. This can
be achieved by horizontally comparing two or more years of Ringgit Malaysia (RM) and
percentage and vertical financial details where each account group is shown as a percentage
of the total accounts. The Gdex Carrier BHD model and the ratio analysis can be
complemented with this. Also, we use connections between the financial statements, the
company's projected sales statements and balance sheets to see how the success of the
company can change. The management of the business generally directs their move.
6.0 References
EduPristine. (2015, May 26). Analysis of Financial Statement of a Company. Retrieved from
https://www.edupristine.com/blog/analysis-of-financial- statement#:~:text=Conclusion
%3A,the%20company%20conducts%20its%20business.&text= Hence%2C%20we%20must
%20conclude%20that,while%20taking%20an%20investment%2 0decision.
Kimberlee Leonard. (2018, December 18). Capital Budgeting Decision Vs. Financing
Decision. Retrieved from
https://smallbusiness.chron.com/capital-budgeting-decision-vs-financing-decision-
66730.html
Justin Song. (2019, October 28). What is Quick Ratio? How Do You Calculate It?. Rterieved
from
https://www.valuepenguin.com/small-business/what-is-quick- ratio#:~:text=There%20are
%20two%20ways%20to,%2B%20Accounts%20Receivable)%20
%2F%20Current%20Liabilities
Chris B. Murphy (2020, Sep 9) Financial Statements. Retrieved from.

https://www.investopedia.com/terms/f/financial-statements.asp
Bursa Malaysia Gdex Annual report retrieved from.
https://www.bursamalaysia.com/market_information/announcements/company_announceme
nt/announcement_details?ann_id=2711239
https://www.bursamalaysia.com/market_information/announcements/company_announceme
nt/announcement_details?ann_id=2801852

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ASSESSMENT COVERSHEET

Section A: Submission Details

Section B: Academic Integrity

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Individual Assignment: GDEX Financial Statement Analysis

WEB20202 / Business Accounting

Name Mohd Amirul Shahreen Bin Azmi

Submission date: 11th November 2020

 Table 2.1.1 Gdex Financial position analysis 2019 & 2018

 Table 2.1.2 Gdex Financial position analysis 2018 & 2018

Figure 4.1 Importance of capital budgeting

To analyses financial statement company Gdex Carrier Bhd. Financial analysis

1.1 Company Gdex overview

GD Express Carrier Bhd is a Malaysian-based investment holding company firm

The Company, through its subsidiaries, provides express distribution services,

By using vertical analysis on an income statement, balance sheet or cash flow

In a vertical analysis the percentage is computed by using the following formula:

Percentage of base = (Amount of individual item/Amount of base item) x 100

Inventories - at cost 1,465,802 0.4% 1,078,365 0.3%

Total Current Assets 374,816,477 100% 376,343,548 100%

Total Assets 555,635,423 518,055,256

Capital and Reserves

Issued capital 337,887,802 70.5% 327,809,125 72.9%

Hire-purchase payables 20,465,587 75.6% 26,063,202 83.2%

Deferred tax liabilities 6,272,790 23.2% 4,942,829 15.8%

Total Non-Current Liabilities 27,059,691 100% 31,331,713 100%

Trade payables 2,881,356 5.8% 2,036,816 5.5%

Amount owing to subsidiary companies - -

Hire-purchase payables 19,721,613 39.9% 15,155,343 40.9%

Tax liabilities 618,963 1.3% 184,545 0.5%

Total Current Liabilities 49,411,340 100% 37,042,343 100%

Total Liabilities 76,471,031 68,374,056

Table 2.1.1 Gdex Financial position analysis 2019 & 2018

Amount (RM) Percentage Amount (RM) Percentage

Inventories - at cost 1,078,365 0.3% 1,554,480 0.4%

Capital and Reserves

Total Equity 449,681,200 100% 426,147,596 100%

Hire-purchase payables - non-current

Total Non-Current Liabilities 31,331,713 100% 25,610,607 100%

Trade payables 2,036,816 5.5% 3,184,815 12.1%

Total Current Liabilities 37,042,343 100% 26,272,872 100%

Total Liabilities 68,374,056 51,883,479

Total Equity and Liabilities 518,055,256 478,031,075

Table 2.1.2 Gdex Financial position analysis 2018 & 2017

Total Non-Current Assets 106,140,329 100% 68,039,689 100%

Inventories - at cost 1,554,480 0.4% 1,216,203 0.3%

Total Current Assets 371,890,746 100% 366,552,720 100%

Total Assets 478,031,075 434,592,409

Issued capital 313,836,577 73.6% 69,161,977 17.9%

Total Non-Current Liabilities 25,610,607 100% 22,697,871 100%

Amount owing to subsidiary - -

Tax liabilities 465,956 1.8% 359,984 1.4%

Total Current Liabilities 26,272,872 100% 25,085,627 100%

Total Liabilities 51,883,479 47,783,498

Total Equity and Liabilities 478,031,075 434,592,409

Table 2.1.3 Gdex Financial position analysis 2017 & 2016

Revenue 313,857,807 292,988,532

Other operating income 19,916,366 11,729,351

Table 2.1.4 Gdex Income Statement analysis 2019 & 2018