Course:
Group Assignment
Prepared for: Sir Ambi AK Kun GROUP MEMBERS : NURUL JANNAH BT MUSTAFFA
2015227982
ANIS SA’IDAH BT SAMSURI
2015674784
SITI NURFATIMAH BT MOHD FAUDZI
2015296666
SHAZNI EMIR BIN CHE SHAHIDAN
2015211932
MUHAMMAD AMIRUL BIN ABDUL AZIZ
2015693728
Group: BM242 5B
Date of Submission: 21ST DEC 2016
TABLE OF CONTENT
NO
TITLE
1)
Executive Summary
2)
Introduction of the Company 2.1 Industry Analysis 2.2 Strategy Analysis
3)
Financial Analysis 3.1 Common Size Analysis 3.2 Ratio Analysis
4)
Cash Flow Analysis
5)
Prospective Analysis
6)
Conclusion
7)
Recommendation
8)
Appendices
PAGES
1.0 Executive Summary
This financial analysis project report has been written to carry out a detailed to conduct the comprehensive study and prepare the financial analysis for PENSONIC Holding Bhd. The financial analysis the industry is based on the past 5 years report between 2010-2014. This project report provides an analysis and interpretation of the year 2010- 2014 profitability, liquidity and financial stability of PENSONIC Holding Bhd. Method for the financial analysis has been conducted by using common-size analysis. The ratio analysis will analyse the ability to meet the obligations, effectiveness in managing assets and efficiency in handling operations, profitability and overall operating results ad ability to service debts and degree financial risk. Many other calculation of can be found in this report. The last few pages of this report deal with the various ways in which the recommendations to implement and monitored the financial analysis. Moreover, we started by introducing the company background at the beginning of the pages.
2.0 INTRODUCTION TO COMPANY 2.1
INDUSTRIAL ANALYSIS
Panasonic Manufacturing Malaysia Berhad involves in the manufacture and sale of electrical home appliances, batteries, and related components. The company’s products include
kitchen appliances, such as rice cooker, blender/juicer, and life appliances, including vacuum cleaner, iron, fan, and electric home shower; and dry battery products comprising manganese batteries. It has operations in Malaysia, Japan, Asia, and the Middle east, and internationally. The company was formerly known as Matsushita Electric Company (Malaysia) Berhad and changed its name to Panasonic Manufacturing Malaysia Berhad in 2005. Panasonic Manufacturing Malaysia Berhad was founded in 1965 and is based in Shah Alam, Malaysia. Panasonic Manufacturing Malaysia Berhad main activities are making household appliance manufacturing. Panasonic is one of the world's largest consumer electronics manufacturers. Its products such as home appliances are well known in Malaysia. Their main products is making home electrical appliances. This company offers a variety of products and services such as manufacturing and selling electronic and electric products, systems and components for consumer, business, and industrial uses around the world. The company also offers video and audio equipment, information and communications equipment such as security system, electronic products, Internet-enabled equipment, flat-panel and plasma TV series, blue-ray disc and DVD recorders, digital video cameras, personal computers, and mobile phones. Besides that, the company also offers an automotive electronics, including car navigation systems, engine control units, and batteries. It also produces home appliances which contain of refrigerators, room air conditioners, washing machines and vacuum cleaners, coffee maker, dish washer, microwave oven, bread maker and steam iron. Furthermore, the company manufactures, sells, installs, and provides services connected to various products that include electrical construction materials, home
appliances as mentioned before, building products, electronic materials, and automation controls. In addition, it also provides semiconductor products such as electronic devices, batteries, and electric motors for usage in home appliances, industrial equipment, and office products. In conclusion, it aids consumers, industrial and business corporations, governments and other institutions by producing electric and electronic equipment, automotive manufacturers as well as other machinery product. Panasonic Manufacturing Malaysia Berhad reported sales of 1.09 billion Malaysian Ringgits (US$262.56 million) for the fiscal year ending March of 2016. This represents an increase of 16.7% versus 2015, when the company's sales were 931.02 million Malaysian Ringgits. Sales at Panasonic Manufacturing Malaysia Berhad have increased during each of the previous five years (and since 2010, sales have increased a total of 43%). Sales of Home Appliance Products saw an increase of 17.4% in 2014, from 456.58 million Malaysian Ringgits to 535.81 million Malaysian Ringgits. 2.2
STRATEGY ANALYSIS
This strategy analysis will be referred to SWOT analysis of Pensonic Holdings Bhd. The comprehensive SWOT analysis provides a strategic SWOT analysis of the company’s business and operations. This is shows a comprehensive view of the company’s key strengthen and weaknesses
and the potential opportunities and threats. This SWOT analysis of Pensonic Holdings Bhd can provide a competitive advantage. This strategic SWOT analysis of Pensonic Holdings Berhad provides a strategic SWOT analysis of the company's businesses and operations. The profile shows a comprehensive view of the company's key strengths and weaknesses and the potential opportunities and threats
Strengths: •
High profitability and revenue
•
Domestic market
•
Monetary assistance provided
•
Experienced business units
•
High profitability and revenue
•
Reduced labour costs
•
High growth rate
Weaknesses: •
Future profitability
•
Future cost structure
Opportunities: •
Income level is at a constant increase
•
Growth rate and profitability
•
Global market
•
Venture capital
•
Growing economy
•
New products and services
•
New acquisitions
Threats: •
Price changes
•
Growing competition and lower profitability
•
Rising cost of raw material
•
External business risks
Statement of Financial Position For PENSONIC Holdings Berhad For The Year 2010 To 2014
ASSETS NON CURRENT ASSETS Property, plant a nd equipment Investment properties Intangible assets Investments in associate companies Deferred Tax Assets Total Non Current Ass e ts CURRENT ASSETS Inventories Trade Receivable and other receivable Tax recoverable Fixed deposits with licensed banks cash and cash equivalents Non-current Asset Held for sale Total Current Ass e ts TOTAL ASSETS
EQUITY & LIABILITIES Share capital Reserves Retained Earning
2014
2013
2012
2011
2010
RM
RM
RM
RM
RM
81,105,685
65,474,934
497,588
505,851
514,115
1,177,875
898,083
1,034,071
1,024,632
1,026,033
1,024,146
1,633,704
248, 395
247,148
226,924
162,580
162,763
58,858
183,184
1,245,261
1,353,832
1,838,531
82,944,597
67,435,749
60,007,051 47,215,980
47,838,658
81,072,651
75,059,829
88,860,507 86,154,197
83,868,074
68,309,697
71,113,925
70,393,226 74,089,207
70,071,161
2,140,582
1,812,371
1,516,833
562,687
425,503
0
0
0
0
0
20,263,278
24,595,577
20,092,475 15,399,034
17,553,977
0
0
CURRENT LIABILITIES Trade payables and other payable Tax payable Bank borrowings Finance lease liabilities TOTAL CURRENT LIABILITIES TOTAL LIABILITIES TOTAL EQUITY AND LIABILITIES
653,151
0
43,305,577
415,401
171,786,208 172,581,702 181,516,192 176,205,125 172,334,116 254,730,805 240,017,451 241,523,243 223,421,105 220,172,774
64,834,000
46,310,000
46,310,000 46,310,000
46,310,000
30,738,258
41,623,028
39,181,305 50,649,123
48,596,277
0
0
Equity attributable to owners of the parent 95,572,258 87,933,028 -299,841 -136,471 Non-controlling interest TOTAL EQUITY 95,272,417 87,796,557 NON CURRENT LIABILITIES Bank borrowings Finance lease liabilities Deferred tax liabilities TOTAL NON CURRENT LIABILITIES
56,994,718 43,497,547
0
0
0
85,491,305 96,959,123
94,906,277
-191,720
180,420
85,299,585 97,139,543
503,044
95,409,321
8,089,584
13,114,425
10,481,862
3,443,439
4,184,718
0
0
0
0
0
44,000
6,254
704,596
1,042,466
1,299,759
8,133,584
13,120,679
11,186,458
4,485,905
5,484,477
61,536,180
55,535,903
49,368,624 40,263,042
546
0
89,788,078
83,564,312
0
0
13,086
38,329,183
652,519
377,714
95,655,490 80,880,096
80,572,079
0
0
0
151,324,804 139,100,215 145,037,200 121,795,657 119,278,976 159,458,388 152,220,894 156,223,658 126,281,562 124,763,453 254,730,805 240,017,451 241,523,243 223,421,105 220,172,774
Statement of Comprehensive Income For PENSONIC Holdings Berhad For The Year 2010 To 2014
Revenue Cost of sales
2014 373,724,824 303,010,365
2013 362,515,382 -293,184,705
2012 348,642,601 -293,184,705
2011 297,963,037 -238,012,481
2010 303,776,169 -251,326,315
Gross profit
70,714,459
64,762,821
55,457,896
59,950,556
52,449,854
Other income Administrative expenses Selling and Distribution expenses Other operating expenses Share of result of associate companies Share of profit equity Finance Cost Profit be fore tax Income tax expense
3,465,642 -26,755,494 -40,625,690 -430,680 0 1,247 -4,523,229 1,846,255 860,799
3,694,274 -24,639,828 -35,324,151 -158,641 0 20,224 -4,411,569 3,943,130 -380,928
2,655,047 -24,398,918 -41,050,081 0 0 64,344 -3,792,282 -11,063,994 76,651
1,670,842 -19,073,088 -33,323,377 -631,020 756 0 -3,316,109 5,278,560 -2,262,747
2,210,240 -17,535,960 -28,568,792 -214,725 7,283 0 -3,082,084 5,265,816 -2,097,086
Profit for the ye ar
2,707,054
3,562,202
-10,987,343
3,015,813
3,168,730
3.1 COMMON SIZE COMMON SIZE SOFP 2014 %
2013 %
2012 %
2011
2010
%
%
ASSETS NON CURRENT ASSETS Property, plant and equipment Investment properties Intangible assets Investments in associate companies Deferred Tax Assets Total Non Current Assets
31.84 0.20 0.41 0.10 0.02 32.56
27.28 0.21 0.43 0.00 0.08 27.99
23.60 0.21 0.42 0.09 0.52 24.85
19.47
19.67
0.53
0.41
0.46
0.74
0.07
0.07
0.61
0.84
21.13
21.73
CURRENT ASSETS Inventories Trade Receivable and other receivable Tax recoverable Fixed deposits with licensed banks cash and cash equivalents Non-current Asset Held for sale Total Current Assets TOTAL ASSETS
31.83 26.82 0.84 0.00 7.95 0.00 67.44 100
31.27 29.63 0.76 0.00 10.25 0.00 71.90 100
36.79 29.15 0.63 0.00 8.32 0.27 75.15 100
38.56
38.09
33.16
31.83
0.25
0.19
0.00
0.00
6.89
7.97
0.00
0.19
78.87
78.27
100
100
19.29 17.34 0.00 36.64 -0.06 36.58
19.17 16.22 0.00 35.40 -0.08 35.32
21
21
23
22
0
0
Equity attributable to owners of the parent Non-controlling interest TOTAL EQUITY
25.45 12.07 0.00 37.52 -0.12 37.40
43
43
-0.08
0
43.32
42.88
NON CURRENT LIABILITIES Bank borrowings Finance lease liabilities Deferred tax liabilities TOTAL NON CURRENT LIABILITIES
3.18 0.00 0.02 3.19
5.46 0.00 0.00 5.47
4.34 0.00 0.29 4.63
1.54
1.90
0.00
0.00
0.47
0.59
24.16 0.00 35.25 0.00 59.41 62.60 100
23.14 0.00 34.82 0.00 57.95 63.42 100
20.44 0.01 39.61 0.00 60.05 64.68 100
EQUITY & LIABILITIES Share capital Reserves Retained Earning
CURRENT LIABILITIES Trade payables and other payable Tax payable Bank borrowings Finance lease liabilities TOTAL CURRENT LIABILITIES TOTAL LIABILITIES TOTAL EQUITY AND LIABILITIES
2.01
2.49
18.02
17.41
0.29
0.17
36.20
36.59
0.00
0.00
54.51
54.18
56.52
56.67
100
100
COMMON SIZE SOCI 2011 % 100 -79.88
2010 % 100 -82.73
15.91
20.12
17.27
Income tax expense
-1.21 0.49 0.23
1.02 -6.80 -9.74 -0.04 0.00 0.01 -1.22 1.09 -0.11
0.76 -7.00 -11.77 0.00 0.00 0.02 -1.09 -3.17 0.02
0.56 -6.40 -11.18 -0.21 0.00 0.00 -1.11 1.77 -0.76
0.73 -5.77 -9.40 -0.07 0.00 0.00 -1.01 1.73 -0.69
Profit for the year
0.72
0.98
-3.15
1.01
1.04
Cost of sales
2014 % 100 -81.08
2013 % 100 -82.14
2012 % 100 -84.09
Gross profit
18.92
17.86
Other income
0.93 -7.16 -0.11 -0.12 0.00
Revenue
Administrative expenses Selling and Distribution expenses Other operating expenses Share of result of associate companies Share of profit equity Finance Cost Profit before tax
0.00
3.2 RATIO ANALYSIS Liquidity Ratio Ability to meet the obligations
CR
2010
2011
2012
2013
2014
=
172,334,116.00
176,205,125.00
181,516,192.00
172,581,702.00
171,786,208.00
=
119,278,976.00 1.44 Times
121,795,657.00 1.45 Times
145,037,200.00 1.25 Times
139,100,215.00 1.24 Times
151,324,804.00 1.14 Times
CA - Inventory - Prepayment =
88,466,042.00
90,050,928.00
92,655,685.00
97,521,873.00
109,350,649.00
Current Liabilites =
119,278,976.00 0.74 Times
121,795,657.00 0.73 Times
145,037,200.00 0.64 Times
139,100,215.00 0.70 Times
151,324,804.00 0.72 Times
=
70,550,679.00
71,400,437.00
72,241,216.50
70,753,575.50
69,711,811.00
968,451.67 74.59 Days
1,006,987.17 70.26 Days
1,038,124.51 67.15 Days 78,066,240.00
Current Assets Current Liabilities
ATR
ACP
Avg. Acc.Receivables Sales/360
DSI
Avg.Inventory
=
843,822.69 83.61 Days
=
85,245,351.00
85,011,135.50
87,507,352.00
81,960,168.00
COGS/360 =
698,128.65 122.11 Days
827,675.10 86.27 Days
661,145.78 128.58 Days
811,402.38 107.85 Days
827,090.45 99.09 Days
841,695.46 92.75 Days
As we can see that current ratio decrease significantly from 2011 to 2012 and continuing decrease in year 2013 then decrease again year 2014. The current ratio in year 2010,2011,2012,2013 has increase which are 1.44 Times, 1.45 Times, 1.25 Times, 1.24 Times and dropped in year 2014 1.14 Times. Although the current ratio is dropped in year 2016, the company still be able to meet maturing obligation which mean the company still be able to finance their debt with the current asset that they have. In regard the quick ratio is decrease in year 2010 to year 2012 which are 0.74 Times, 0.73 Times and 0.64 Times. It increases in year 2013 which is 0.70 Times. This is direct impact on the increasing amount of the sold inventoy much drastic than the decreasing of the total current asset throughout the period in year 2013 to year 2014.As far as the quick ratio a concerned the company liquidity remain above the norm of 1 times. So company should be able to meet short term obligation. Considering the average collection period (ACP) and DSI both ratios showed that the company efficiency in accounts receivables (AR) collection and sales activities increasing.
The Average Collection Period increased from 83.61 days in year 2010 to 86.27 days in year 2011. However in year 2014 average collection period is decreasing to 74.59 days in year 2012, 70.26 days in year 2013 and 67.15 days in year 2014. Meanwhile the DSI in year 2010 was 122.11 days and increased in year 2011 to 128.58 days. It is the decreasing in year 2012 the DSI decreased to 107.85 days. In years 2013 the DSI was 99.09 days and decreased in year 2014 92.75 days. This was a good sign for the company because those ratio indicated that the level of company efficiency in selling their product and collect their account receivable increase significantly but in year 2014, average collection period seems a bit tougher than the previous year. If this matter continue for a few years to come the company might face not a cash flow problem beacuse their ability to meet short term obligation can be achievable. Profitability Debt Ratio Ability to service debts and degree of financial risk. 2010
DR
=
=
2014
156,223,658.00
152,220,894.00
159,458,388.00
220,172,774.00
223,421,105.00
241,523,243.00
240,017,451.00
254,730,805.00
56.52%
124,763,453.00 95,409,321.00
=
2013
126,281,562.00
= 130.77%
LTDER
2012
124,763,453.00
= 56.67%
DER
2011
5,484,477.00
95,409,321.00 = 5.75%
126,281,562.00 97,139,543.00 130.00%
64.68%
156,223,658.00 85,491,305.00 182.74%
63.42%
152,220,894.00 87,933,028.00 173.11%
62.60%
159,458,388.00 95,272,417.00 167.37%
4,485,905.00
11,186,458.00
13,120,679.00
8,133,584.00
97,139,543.00
85,491,305.00
87,933,028.00
95,272,417.00
4.62%
13.08%
14.92%
8.54%
For the debt ratio, it is indicates proportion between debt and its total assets. The debt ratio for the company shows how much the company relies on debt. The higher ratio was in 2012 which is 64.68%, it showed the greater will be associated with the firms operations. Moreover, the amount increase or decline of the company total debt and total asset showed a similar trend. As we can see debt ratio was declining every year starting from 2010 until 2014 except in the year 2012. Debt to equity ratio is used as a standard for judging a company financial standing. It is also measure of a company’s ability to repay its obligations. The higher the debt to equity ratios may not be able to attract additional lending capital. However, the percentage of total debt to equity declined significantly from 2010 until 2011. In 2012, the percentage was increase to 182.74%. It start declining again in 2013 which is 173.11% and year 2014 was 167.37%. It also can be said that, Pensonic reduce the issues of a share.
For the long term debt equity ratio, it showed the increasing in the long debt starting from year 2011 until year 2013. Other than that, shareholder equity shows the increasing performance in 2014 until 2016. It will give impact to the long term debt equity because it shows significantly increasing from 2014 until 2016. Even the long term debt decrease, it can be said that Pensonic company choose the equity to financing comparing to use the debt. Profitability Ratio Profitability and overall operating result
GPM
=
2010
2011
2012
2013
52,449,854.00
59,950,556.00
56,537,744.00
64,762,821.00
70,714,459.00
303,776,169.00
297,963,037.00
348,642,601.00
362,515,382.00
373,724,824.00
17.27%
20.12%
16.22%
17.86%
18.92%
5,278,560.00
(11,063,994.00)
3,943,130.00
1,846,255.00
303,776,169.00
297,963,037.00
348,642,601.00
362,515,382.00
373,724,824.00
2.75%
1.77%
-3.17%
1.09%
0.49%
2,772,197.00
(10,987,343.00)
3,592,644.00
2,707,054.00
303,776,169.00
297,963,037.00
348,642,601.00
362,515,382.00
373,724,824.00
1.04%
0.93%
-3.15%
0.99%
0.72%
2,772,197.00
(10,987,343.00)
3,592,644.00
2,707,054.00
220,172,774.00
223,421,105.00
241,523,243.00
240,017,451.00
254,730,805.00
1.44%
1.22%
-4.55%
1.50%
1.06%
2,772,197.00
(10,987,343.00)
3,592,644.00
2,707,054.00
95,409,321.00
97,139,543.00
85,491,305.00
87,933,028.00
95,272,417.00
3.32%
2.85%
-12.85%
4.09%
= OPM
=
= NPM
=
= ROA
=
= ROE
= =
8,340,617.00
3,168,730.00
3,168,730.00
3,168,730.00
2014
2.84%
A part of profitability analysis is evaluation of operating performance. This is done by examining ratio that typically link income statement line item to sales. These ratios are often referred to as a profit margin. The gross profit margin related to the company cost of sales, or cost of goods sold, represents the expense related to labour. A higher margin percentage is in 2011 which indicates 20.12 % compared to other year. It is shows the favourable profit indicator in 2011. From the aspect of financial ration, there was an improvement in OPM and NPM from 2011 until 2014. However the percentage has been decreased for OPM in year 2011, 2012 and 2014 which is 1.77 %, -3.17 % and 0.49 % meanwhile for NPM also decrease in the same year which is
2011, 2012 and 2014. The percentage is shown here 0.93 %,-3.15 % and 0.72 %. Other than that, it is showed the positive result from each of year for Pensonic. It is means that the management has much more control over operating expenses that it’s cost of sales outlays. Moreover, the
profitability analysis is also focusing on the return on investment. The company return on asset. Equity holders will be managed based on equity financing. Therefore, the return on equity in 2013 higher than other years which is indicates 4.09%. Thus, the company business can be concluded are less effective in managing the costs incurred. Other than that, the Pensonic are less attractive compared to the competitors. Effeciency Ratio Level Of Effectiveness In Managing Assets & Efficiency In Handling Operation 2010 ARTO
Sales
= COGS
= Sales
= Sales
2014
303,776,169.00
297,963,037.00
348,642,601.00
351,428,747.00
373,724,824.00
69,870,931.00
71,400,436.50
72,241,216.50
70,753,575.50
69,711,811.00
4.17
4.83
4.97
5.36
238,012,481.00
292,104,857.00
286,665,926.00
303,010,365.00
85,245,351.00
85,011,135.50
87,507,352.00
81,960,168.00
78,066,245.00
2.95
2.80
3.34
3.50
3.88
303,776,169.00
297,963,037.00
348,642,601.00
351,428,747.00
373,724,824.00
45,971,038.00
47,527,319.00
53,611,515.50
63,721,400.00
75,190,173.00
=
Avg, Total Asset =
4.35 251,326,315.00
=
Avg. Fi xed Asset
TATO
2013
=
Avg. Inventory
FATO
2012
=
Avg. Receivable
ITO
2011
6.61
6.27
6.50
5.52
4.97
303,776,169.00
297,963,037.00
348,642,601.00
351,428,747.00
373,724,824.00
218,335,686.00
221,117,192.00
232,472,174.00
240,770,347.00
247,374,128.00
1.39
1.35
1.50
1.46
1.51
The level of effectiveness of Pensonic Company in managing assets and efficiency in handling operations is very much connected and reflected by the amount of sales revenues. The sales revenues from the year 2012 to 2014 are increasing but the decreasing on the previous two years. The sales revenues decrease from RM 303,776,169.00 to RM 297,963,037.00 and increase RM 348,642,601.00, RM 351,428,747.00 and RM 373,724,824.00 respectively. The average account receivable keep increasing by respectively years from 2010 to 2012 with RM 69,870,931.00, RM 71,400,436.50, and RM 72,241,216.50 but decreasing in year 2013 and 2014 with RM 70,753,575.50 and RM 69,711,811.00 respectively. Therefore the account receivable turnover ratio, ARTO in year 2010 is 4.35 days, 2011 is 4.17 days, 2012 is 4.83 days, 2013 is 4.97 days, and 2014 is 5.36 days.
Cost of goods sales shows un-sustained amount from years, on 2010 COGS was RM251,326,315.00, following with year 2011 by RM 238,012,481.00, year 2012 with RM291,104,857.00, year 2013 with RM286,665,926.00 and increase in year 2014 to RM303,010,365.00. The average inventory on years 2010 until 2011 is decreased as RM85,245,351.00 and RM 85,011,135.50. On the year 2012, the amount is appreciate to RM87,507,354.00 but keep on falling in year 2013 and 2014 with RM 81,960,168.00 and RM78,066,245.00. Therefore, the amount of inventory turnover for the past 5 years is 2.95 times, 2.80 times, 3.34 times, 3.50 times, and 3.88 times. Fixed assets turnover shows decreasing amount in second year from 6.61 times to 6.27 times from 2010 to 2011 respectively but the declining continue from 2012 until 2014 with 6.50 times, 5.52 times, 4.97 times. Next is Total assets turnover, the amount for year 2010 is 1.39 times, 2011 is 1.35 times, 2012 is 1.50 times, 2013 is 1.46 and the increments on 2014 to 1.51 times. The average total asset, the company shows beautiful increment with RM218,335,686.00, RM211,117,192.00, RM232,472,174.00, RM240,770,347.00 and RM247,374,128.00 respectively.
4.0 CASH FLOW ANALYSIS
STATEMENT OF CASH FLOW FOR YEAR 2012, 2013, 2014, 2015,2016 2010
2012
2011
2013
2014
CASH FLOWS F ROM OP ERATING ACTIVITIES
PROFIT BEFORE TAX
5,265,816
5,278,560
(11,063,994)
3,943,130
1,846,255
3,443,344
3,920,488 10,609 (66,740)
4,599,973 8,264 (22,999)
4,817,049 -
3,792,282 (53,621) 84,318 (64,344) (3,441,002)
(56,763) (1,637,827) 4,411,569 (37,048) 93,714 (20,224) 11,281,789
(35,925) 4,523,229 (171,998) 452,529 (1,247) 11,398,876
(2,601,793) 4,423,322 8,461,281 10,282,810 6,841,808 (1,746,472) 5,095,336
13,742,078 (1,005,386) 7,023,242 19,759,934 31,041,723 (673,540) 30,368,183
(2,646,532) 6,508,589 (8,342,010) (4,479,953) 6,927,186 695,206 7,622,392
40 119,960 53,621 37,048 67,032 23,000 2,290,978 (17,262,926) (12,965,149) (17,142,233) (10,494,163)
171,998 96,193 (2,476,279) (9,578,888) (11,786,976)
7,763,962 3,180,121 (149,129) (207,740) (1,215,632) (1,215,632) 11,014,621 (10,386,837) 59,194 (86,771) (3,792,282) (4,442,597) 13,534,769 13,013,491 1,487,872 6,860,529 213,763 (97,398)
3,345,710 (3,340,364) 6,483,400 (271,371) (1,701,888) (2,125,583) 909,903 (4,701,342) (1,401,535) (5,566,119) (23,060)
3,582,528 5,284,163
12,047,294 6,458,115
Adjustments for:
Depreciation Property, Plant and Equipment 2,823,204 10,609 Depreciation Investment Properties Impairment of goodwil -322 Gain on disposal Property, Plant and Equipment Gain on disposal of subsidiary 175,243 Amortisation of prepaid lease payments Subsidiary Companies Excess of Fair Value Over Purchase Consideration of Subsidiar Gain on disposal Non-Current Assets held for Sale 3,082,084 Interest expenses (34,862) Interest income Property, plant and equipment written off (7,283) Loss of winding-up of associate Share of profit of associates, net of tax Operating profit before working capital changes 11,314,489 Changes in working capital: Inventories Receivables Payables
Cash generated from operations Tax paid Tax refund Net cash from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of non-controling interests Interest received Dividends received Proceeds from disposal of property, plant and equipment Proceeds from disposal of non-current assets for sale Net cash outflow arising from acquisition of subsidiary Purchase of property, plant and equipment Net cash (used in)/from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES Drawdown of term loans Repayment of term loans Proceeds from issuance of warrants Repayment of finance lease liabilities Dividends paid (Repayment)/drawdown of other borrowings Net changes in bankers’ acceptances Withdrawal of pledged deposits Decrease/(Increase) in pledged fixed deposits Increase in fixed deposits with maturity more than three months Interest paid Net cash (used in)/from financing activities Net (decrease)/increase in cash and cash equivalents Effects of exchange translation differences on cash and cash equivalents Cash and cash equivalents at beginning of the financial year Cash and cash equivalents at the end of the financial year
25,182 (235,000) 3,316,109 (27,403) 5 (756)
12,440,859
(5,057,294)
7,560,687
2,708,960
21,850,958
7,885,339 -
-
5,987,194
-
34,862 -
(1,898,145) -
-
27,403 -
4,425 -
82,119 360,000 -
(7,373,434)
(3,395,621)
(7,334,147)
(2,926,099)
1,885,655 -
(620,108) -
(144,526)
(318,141)
(868,307)
(1,041,975)
(4,747,449) -
(323,784)
198,689 366,586
-
-
-
-
-
-
-
939
(2,207,186)
(2,504,614)
(31,016)
(800)
499,635
19,346,344
630,070
2,476,147
10,609
-
(3,082,084)
(3,316,109)
(7,280,495)
(4,731,058)
4,731,702
(1,669,963)
-300,824
(158,823)
980,436
5,411,314
5,411,314
3,582,528
5,284,163 12,047,294
2010 Cash flow from operating activities
This operating activity in 2010 shows that how much cash comes from the sales of Pensonic’s product and less the amount of the cash flow needed to sell a goods. The profit before tax of the Pensonic in 2010 was RM 5,265,816. However, the total operating activities was value of RM 19,346,344. This amount mostly contributed from the major business activities which was reflected the growing of the sales in the Pensonic’s, depreciation of property, plant and equipment, investment properties, unrealised foreign exchange gain, impairment losses on trade receivables, and reversal of impairment losses on trade receivables . However, there also amount of cash outflow contributed from gain on disposal property, plant and equipment, interest income, inventories written down, inventories written off, income taxes refunded, and rental income from investment properties, dividend income, and gain or loss in the disposal of property, plant and equipment written off, provision for slow-moving inventories and share of results of associate companies. The Cash Flow from the Investing Activities
The cash flow from the investing activities. The company was assumed expending rapidly as reflected by huge amount spent on the acquisition of fixed assets in order to complement the increasing sales. Thus, Pensonic purchase property, plant and equipment with value of RM 7,373,434. Pensonic’s also received interest from the investing with RM34,862 and proceeds from disposal of property, plant and equipment RM4,425. The Cash Flow from Financing Activities
This section is a bout the Pensonic’s accounts for external activities that are to raise the capital and repaid investors such as issuing dividend, issuing stock or adding stock. It is show the financial strength of Pensonic’s. The company spends RM 868,307 for paid the dividend to the shareholders.
2011 Cash flow from operating activities
This section is about how much cash comes from the sales of Pensonic’s product and the less the amount of cash needed to make and sell the products. The net cash flow from operating activities was positive RM5, 987, 194. This amount was mostly contributed from the major of the business profit activities which was reflected the growing of the sales in the Pensonic’s, investment properties, property, plant and equipment written off, inventories written off, impairment loss on trade receivables, and bad debts written off. However, there is also amount cash outflow contributed from gain/loss in foreign exchange, interest expenses, interest income, income taxes refunded, and gain/loss in disposal of property, plant and equipment. The net income is much higher that cash flow, the Pensonic’s is speedin g its booking income or costs. Cash flow financing activities
This section is about the Pensonic’s accounts for external activities that are to raise the capital and repay investor such as issuing dividend, issuing stock or adding stock. It is show the financial strength of Pensonic’s. Pensonic’s paid the dividend to their shareholders amounted RM1,041,975 to financing their business. It is the second highest amount paid dividend to the shareholder. Cash flow investing activities
The company spends too much on RM 3,395,621 purchases of property, plant and equipment. In addition, the cash inflows came out from proceeds from disposal property, plant and equipment RM 82,119, and interest received RM27,402, 069 . However, the net cash used in investing activities is negative which was amounted RM2,926,099.
2012 The Cash Flow from the Operating Activities
This operating activity in 2012 shows that how much cash comes from the sales of Pensonic’s good and less the amount of the cash flow needed to sell a goods. The net profit of the Pensonic in 2012 was RM 11,063,994. However, the total operating activities was positive with value of RM 5,095,336. This amount mostly contributed from the major business activities which was reflected the growing of the sales in the Pensonic’s, amortization of leasehold land use right, provision the retirement benefit, property, plant, and equipment written off, and the bad debt written off. However, there also amount of cash outflow contributed from gain/loss in foreign currency translation, interest received, income taxes refunded, and rental income from investment properties, dividend income, and gain or loss in the disposal of property, plant and equipment. The Cash Flow from the Investing Activities
The cash flow from the investing activities. The company was assumed expending rapidly as reflected by huge amount spent on the acquisition of fixed assets in order to complement the increasing sales. Thus, Pensonic purchase property, plant and equipment with value of RM 17,262,926. However, Apollo’s used cash in investing activities with RM 17142233. The Cash Flow from Financing Activities
This section, is about the Pensonic’s accounts for external activities that are to raise the capital and repaid investors such as issuing dividend, issuing stock or adding stock. It is show the financial strength of Pensonic’s. The company spends too much on RM 12,156,32 for paid the dividend to the shareholders.
2013 Cash flow from operating activities
This section is about how much cash comes from the sales of Pensonic’s goods and the less the amount of cash needed to make and sell the goods. The net cash flow from operating activities was positive RM30,368,183. This amount was mostly contributed from the major of the business profit activities which was reflected the growing of the sales in the Pensonic’s, amortization of leasehold land use rights, provision for retirement benefits , property, plant and equipment written off, inventories written off, and bad debts written off. However, there is also amount cash outflow contributed from gain/loss in foreign currency translation, interest received, income taxes refunded, and rental income from investment properties, dividend income, and gain/loss in disposal of property, plant and equipment. The net income is much higher than cash flow, the Pensonic’s is speeding its booking income or cost. Cash flow financing activities
This section is about the Pensonic’s accounts for external activities that are to raise the capital and repay investor such as issuing dividend, issuing stock or adding stock. It is show the financial strength of Pensonic. In order to make the Pensonic’s shareholder stay in the company, the paid high dividend amount RM 1,215,632. It is huge amount but, it is good to the Pensonic. It is because the shareholder can finance their company. Cash flow investing activities
The cash flow from the investing activities. The company was assumed expending rapidly as reflected by huge amount spent on the acquisition of fixed assets in order to complement the increasing sales. Thus, Pensonic purchases property, plant and equipment with value of RM 912965149. Besides that, the cash inflow came out from the Pensonic’s investing activities is disposal in property, plant and equipment other investment amounted RM 23000. Moreover, Pensonic‘s no dividen get for 2013. Lastly, the net cash used in financing activities was amounted RM13,013,491.
2014 Cash flow from operating activities
This section is about how much cash comes from the sales of Pensonic’s goods and the less the amount of cash needed to make and sell the goods. The net cash flow from operating activities was positive RM7,622,392. This amount was mostly contributed from the major of the business profit activities which was reflected the growing of the sales in the Pensonic’s, amortization of leasehold land use rights, investment properties, provision for retirement benefits , property, plant and equipment written off, inventories written off, impairment loss on other investment, and bad debts written off. However, there is also amount cash outflow contributed from gain/loss in foreign currency translation, interest received, income taxes refunded, and rental income from investment properties, dividend income, and gain/loss in disposal of property, plant and equipment. The net income is much higher that cash flow, the Pensonic is speeding its booking income or costs. Cash flow financing activities
This section is about the Pensonic’s accounts for external activities that are to raise the capital and repay investor such as issuing dividend, issuing stock or adding stock. It is show the financial strength of Pensonic. The company paid the dividend to their shareholders amounted RM1,701,888 to financing their business. It is the highest amount paid dividend to the shareholder in 2014 compare with year 2012 and 2013. It is maybe because in 2014, Pensonic has raise issues the share. Cash flow investing activities
The company spends RM 9,578,888 for purchase of property, plant and equipment. In addition, the cash inflows came out from disposal property, plant and equipment RM 96,193, No dividends receive, and rental received from investment properties RM325, 400. However, the net cash used in investing activities is negative which was amounted RM9, 748,719.
5.0 PROSPECTIVE ANALYSIS PROJECTED INCOME STATEMENTS FOR THE YEAR ENDED 2014
2015
Sales
373,724,824
385,503,122
Cost of Sale
(303,010,365)
(312,790,478)
Gross Profit
70,714,459
72,712,644
Profit before Tax
1,846,255
17,850,644
Tax Expenses
(860,799)
(420,389)
Profit for the Financial Year
2,707,054
17,430,255
Dividend Payout (Cash Dividend)
1,701,888
(3,890,040)
Retained Earnings
1,005,166
13,540,215
Income Statement
For the forecasted the income statement and the balance sheet, we started with the sales. The sales of the Pensonic’s is fluctuate in every year, the easiest way to find out the grow percentages we plus all the sales from the 2014 until 2015. It is to get the percentage of the trend of growing in the Pensonic Company. The trends of growing in the Pensonic’s Company increase by 3%. So we assume that, when the sales increasing, the cost of operating increase like example distribution expenses, and administrative expenses. In addition, when the operating costs are increasing it affect the inventory will also increase too. Plus, when the inventory is increase the sales also will be increase. As the conclusion, that the Pensonic can get generate the high sales from the forecasted income statement 2015. However, the cost also keeps increase make that the profit slightly increase compare with the previous years. It shows that the Pensonic have to increase their production so that they can get the high profit.
Projected Balance Sheet for the Year Ended ASSETS
LIABILITIES
CURRENT ASSET
CURRENT LIABILITIES
Inventories Trade Receivable Other receivable and deposits Tax Recoverable Fixed deposits with licensed banks Cash And Cash Equivalents
61,171,531 62,594,191 6,356,173 748,867
Trade payables Other payables Tax payable Bank borrowings
3,763,477 30,409,254
Finance lease liabilities
Total Current Assets
165043493
Total Current Liabilities
NON CURRRENT ASSET
Property, plant and equipment Investment properties Intangible assets Investments in associate companies Deferred tax assets Total Non Current Assets
38,458,716 22,651,267 47,412 66,765,352 275,438 128198185
NON CURRENT LIABILITIES
98,302,268 489,326 1,042,525 259,448 30,565 100,124,132
Bank borrowings Finance lease liabilities Deferred tax liabilities
27,978,722 628,832 45,350
Total Non Current Liabilities
28,652,904
Total Liabilities
156,851,089
EQUITY
TOTAL ASSETS
265,167,625
Retained Earnings Share capital Equity attribute to owners of the Company
94,571,520
Financial Needed
13,745,016
Total Liabilities and Equity
29,737,520 64,834,000
265,167,625
Debt-Equity-Ratio Debt
Equity
Debt Equity
170596105 94571520
1.80
Debt Equity
156851089 108316536
1.44
In the forecasted balance sheet 2015, there is shows that the financial need for the year is amounted RM 13,745,016 . It is huge amount since the Pensonic has two options either financing their activities through the debt or equity. In order to get the fund Pensonic ’s should choose equity rather than debt. It is because the when choose the equity the Pensonic can get the fund through the shareholders. When the Pensonic gets the fund from the shareholder, they need to pay the dividend to the shareholders. However, if the Pensonic chooses equity, they only need to issue the share to the shareholders. And they have to paid dividend once in the year to the shareholders. In the conclusion, the Pensonic better choose equity. It is because the Equity is just 1.44 compare than debt 1.80 which is the biggest ratio. Moreover, the Pensonic just paid once in the year dividend to the shareholder compare pay the interest every month to the bank. As the result, Pensonic can get generate higher income since they have pay less.
6.0 CONCLUSION
In the conclusion, Pensonic Berhad is a manufacturing product that can maintain their sales. This is because Pensonic is a big company and can generate more income every year if they have their own strategy. For me I think Pensonic is good in managing their financial even in a year 2016 their sales a little bit decline but Pensonic still able to make profit and meet the short term obligation. However, to make sure the shareholder stays with Pensonic, they pay high dividend to their shareholder to make sure the shareholder happy and not go to other their competitor. From the financial performance stated in annual report, it seems like Pensonic manage to get higher sales after make an investment. When the Pensonic does the investment they will get the return from the investment and it will lead the profit the company increase. However, Pensonic also can purchase property and make the property as an investment. On the other hand, Pensonic company should find the solution when performance of the company not good. If the company fail to manage properly such as financial ratio show a fluctuation result. Its mean the company performance volatility since it change every year thus make the ratio increase and decrease respectively. In general Pensonic still good in managing and handling their business activity thus this will lead successful to Pensonic.
7.0 RECOMMENDATION
Pensonic’s is a consumer’s product that is listed in Bursa Malaysia. Pensonic is an electrical product that is produce variety of product such as rice cooker, heater, iron, hairdryer, washing machine, television, radio, and many more. This company existing in a longer time; however they have a few competitors that are compete in this industry such as Sharp, KDK, Panasonic, Sony, and other company from the same industry. Besides that, the Pensonic company can take a few strategies for make sure this company able to generate profit and increase their sales from year to year.
Pensonic Holding Bhd, the best ways to increase their profitability by improve on their investment in technologies. Pensonic Company can attract their customers by making a new packaging with attractive and colourful that will attract the customers to buy the Pensonic product. Producing new products with advance technology could determine the needs and demand of the consumers for the latest design, technology and green. This is the best ways for the Pensonic to increasing their sales. Furthermore, The Pensonic Company can produce a new product in the industry so that they can generate sales from the new product. For example, the Pensonic Company can produce a new product and test the product to the market. Let say’s the product is success, so that Pensonic Company can produce more and start marketing the product to the market. However, if the products fail to the market the Pensonic Company can let go the strategy and they can start to generate new strategy. Everything will incur cost and this must be happened with perfectly observation and analysis on the demand and needs. On the other hand, Pensonic Company also can improve quality of their product. When the Pensonic Company have a good quality on their product the customers will trust Pensonic product and will stick with the Pensonic even they have substitute product. This is why, Pensonic Company should take care of their quality for make sure the customers or the buyer will buy from the Pensonic not the competitor. Marketing also one of the strategies to make sure sales of the Pensonic keep increasing. When Pensonic has well in their marketing customers will always remember Pensonic product. Pensonic Company should always make their marketing interesting rather than other company. When the marketing is successful mean the Pensonic company will able increase their sales, however If the marketing fail, it will be a cost or expenses to the Pensonic. In the conclusion, the strategy can be taken by the Pensonic is change their packaging, produce a new product, invest in technology, improve the quality of the product and also do the marketing towards their product. If the strategy success this will give a good sign to the Pensonic growth.
References
1. Berhad, P. H. (2010). Annual Report 2010. Penang: Pensonic Holdings Berhad. Retrieved November 15, 2016, from http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download/?name=EA_DS_ATTACHM ENTS&id=157401 2. Berhad, P. H. (2011). Annual Report 2011. Penang: Pensonic Holdings Berhad. Retrieved November 15, 2016, from http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download/?name=EA_DS_ATTACHM ENTS&id=159914 3. Berhad, P. H. (2012, March 31). Annual Report 2012. Penang: Pensonic. Retrieved November 15, 2016, from http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download/?name=EA_DS_ATTACHM ENTS&id=160545 4. Berhad, P. H. (2013). Annual Report 2013. Penang: Pensonic Holdings Berhad. Retrieved November 15, 2016, from http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download/?name=EA_DS_ATTACHM ENTS&id=162517 5. Berhad, P. H. (2014, March 31). Annual Report 2014 Part 1. Penang: Pensonic Holdings Berhad. Retrieved November 15, 2014, from http://disclosure.bursamalaysia.com/FileAccess/apbursaweb/download/?name=EA_DS_ATTACHM ENTS&id=166410 6. Pensonic. (2014, March 31). Annual Report 2014 Part 2 . Pensonic Holding Berhad , 104. 7. www.BursaSaham.com. (n.d.).
