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LAB 3 FIN 534 - assignment group lab 3 FIN534

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Bachelor of business administration (hons.) finance, faculty of business and management, universiti teknologi mara, kampus segamat, johor, prepared by:, no name matric no, 1 maizatul akmar binti mohamad noh 2021886958, 2 nur aireen natasha binti zainudin 2021829938, 3 nur nadiah binti abdullah 2021899812, 4 siti zulaikha binti zainal abidin 2021829912, course : business analytics and financial modelling, course code : fin, date of issue : week 9 (14 december 2022), date of submission : week 10 (30 december 2022), prepared for : madam zahirah binti hamid ghul, class : jba242 3c, table of contents, 1 background of the company...................................................................................

• 1 CHEETAH HOLDINGS BERHAD....................................................................................

1 PADINI HOLDINGS BERHAD..........................................................................................

2 liquidity ratio (cheetah)............................................................................................., 2 leverage ratios (cheetah)........................................................................................, 2 asset management ratio (cheetah)......................................................................, 2 profitability ratio (cheetah)..................................................................................., 2 year to year change analysis for balance sheet...................................., 3 liquidity ratios (padini)...............................................................................................

• 3 LEVERAGE RATIOS (PADINI)............................................................................................
• 3 ASSET MANAGEMENT RATIO (PADINI)..........................................................................

3 PROFITABILITY RATIO (PADINI).......................................................................................

• 3 YEAR TO YEAR CHANGE ANALYSIS FOR BALANCE SHEET..................................
• HOLDINGS BERHAD FOR THE YEAR........................................................................................ 4 FINANCIAL RATIO ANALYSIS OF CHEETAH HOLDINGS BERHAD VS PADINI
• 6 DATA VISUALIZATION.............................................................................................................

7 CONCLUSION............................................................................................................................

• 8 RECOMMENDATION................................................................................................................

Padini began in 1971 as a modest women apparel and wholesale business serving Malaysian department stores. Then, they determined that the future of the fashion business demanded them to establish their own brand. Soon after, they launched the Padini brand and entered the retail market. Today, they are one of the country’s most renowned fashion companies, with two multi-brand labels representing their own brands namely Padini Concept Store, which carries eight brands including Padini, Seed, Padini Authentics, PDI, P&Co, Miki, Vincci, and Vincci Accessories and lastly Brands Outlet. Throughout all, they have approximately 140 outlets in Malaysia, as well as marketplaces in Cambodia, Indonesia, Bahrain, Brunei, Myanmar, Oman, Qatar, Thailand, and United Arab Emirates. Their brands are also accessible online at padini, their e-commerce portal. While they have grown n size, they have also changed. They constantly endeavour to provide their customers with the greatest fashion, quality, and value. They will keep striving to outperform their client’s expectations. That is their key force.

2 FINANCIAL RATIO OF CHEETAH HOLDINGS BERHAD....................................................

Ratio formula 2021, =118,155,267 =109,449,.

RATIO (CR) = 28 times =21 times QUICK/ASI D TEST RATIO (QR)

= 18 times = 11 times

A liquidity ratio is a financial statistic that is used to assess a company’s capacity to meet its short-term loan obligations. It helps companies to determine whether a company’s current, or liquid assets can be used to cover its current liabilities.

The liquidity ratio for Cheetah Holdings Berhad is good in 2021 compared to 2020. Higher ratio indicates a better performance and more liquid the company is. It shows that the company has higher ability to pay its current obligations on time in 2021 compared to 2020 although the ratio is below than 1.

The net working capital does show an improvement in 2021 compared to 2020 as there is an increase in its figure. It indicates that the company has excess funds available to pay its daily operating obligations.

The current ratio in 2021, 28 times has a higher ratio compared to 2020, 21. times. It indicates that the company has a higher ability to pay its short-term obligation.

The quick ratio in 2021 shows that Cheetah Holdings Berhad has a higher ratio compared to 2020 which indicates that the company has a higher ability to pay its short-term obligations without relying on its inventory which is the least liquid asset as it is difficult to convert into cash.

= 4 times = 6 times

= 77 days = 56 days

= 0 times = 0 times

The asset management ratio for Cheetah Holdings Berhad is bad in 2021 compared to 2020. Lower ratio indicates a bad performance and less efficiency of the corporation in using its assets to generate sales or cash. It shows the corporation is not able to manage their assets efficiently.

Account receivable turnover has decreased in 2021 from 6 times to 4 times compared to last year, 2020. It shows that the corporation is less effective that year in collecting debts from customers.

Average collection period in 2021 is longer which has 77 days compared to 2020 that has only 56 days. It shows that the corporation was not able to collect debt in a short period of time.

Total asset turnover has decreased in 2021 from 0 times to 0 times compared to 2020. It shows that the corporation is less effective in using all its resources or assets to generate sales.

The profitability for Cheetah Holdings Berhad is good in 2021 compared to 2020. Higher indicates a better performance and more effective the company in generating profits from its investment and sales. It shows that the company has higher effectiveness in generating profit in 2021 compared to 2020.

Gross profit margin is measured of profitability that shows the percentage of revenue that exceeds the sales. The gross profit margin is calculated by taking gross profit dividing sales and multiplied by 100 to show the figure as a percentage. Based on the ratio, its raise from 31% to 33% which means the management more efficient in generating profit for every cost involved.

The net profit margin measured by taking net profit dividing sales and multiplied by 100 to show the figure as a percentage. In 2020, The net profit margin was –3%. It is because production cost is more than total revenue. However, the net profit margin increases to 6% in 2021. This indicates that Cheetah is more effective in generating net profit.

Operating profit margin ratio showed an increasing figure from –3% in 2020 to 8% in 2021. Increasing figures resulting in higher performance of the company because Cheetah improves their management controls in their operation cost.

3 FINANCIAL RATIO OF PADINI HOLDINGS BERHAD.......................................................

Net working.

RATIO (CR) = 5 times = 4 times

QUICK/ASID TEST RATIO (QR)

=3 times =2 times

The liquidity ratio Padini Holdings Berhad is good in 2021 compared to 2020. Higher ratio indicates a better performance and more liquid the company is. It shows that the company has a higher ability to pay its current obligations on time in 2021 compared to 2020 although the ratio is below than 1.

The current ratio in 2021, 5 times has a higher ratio compared to 2020, 4. times. It indicates that the company has a higher ability to pay its short-term obligation.

The quick ratio in 2021 shows that Padini Holdings Berhad has a higher ratio compared to 2020 which indicates that the company has a higher ability to pay its short-term obligations without relying on its inventory which is the least liquid asset as it is difficult to convert into cash.

RATIO FORMULA 2021 2020

Debt ratio (dr), debt to equity, ratio (der) = 0% = 0%, time interest.

EARNED (TIE) = 3 times = 4 times

Leverage ratios is the ability of company to meet its financial obligations by several financial measurement on how much capital comes in the form of debt or loans. Leverage ratios of Padini Holdings Berhad in the year of 2021 is decreasing from 2020 to 2021.

Debt ratios is a metric that measures company’s total debt in percentage. This is proven by looking from the table above, debt ratio is decreasing from 0% in 2020 to 0% in 2021. The lower the debt ratio, the better the performance. The lower the company’s debt for asset formation, the less risky the company is. It gives big tendency for the lenders and investors to make investments.

Next, debt to equity ratio means a measure of the extent to which a company can cover its debt. Debt to equity ratio in the year of 2020 has RM0 decreasing to RM 0 in 2021. The lower the debt-to-equity ratio, the better the performance as it is indicated less debt in company’s balance sheet.

Lastly, time interest earned is a measure of a company’s ability to meets its debts obligations based on current income. Time interest earned decreasing from 4 time in 2020 to 3 times in 2021. A higher time interest earned is more commending because it means that the company has less of a risk to investors and creditors in term of solvency.

The profitability for Padini is bad in 2021 compared to 2020. Higher ratio indicates a better performance and more effective the company in generating profits from its investment and sales. It shows that the company is become less effective in generating profit in 2021 compared to 2020.

Gross profit margin is measured of profitability that shows the percentage of revenue that exceeds the sales. The gross profit margin is calculated by taking gross profit dividing sales and multiplied by 100 to show the figure as a percentage. Based on the ratio, its decreases from 39% to 37 % which means the management less efficient in generating profit for every cost involved.

The net profit margin measured by taking net profit dividing sales and multiplied by 100 to show the figure as a percentage. In 2020, The net profit margin was 5 %. However, the net profit margin decreases to 5 % in 2021. This indicates that Padini is less effective in generating net profit.

Operating profit margin ratio showed a decreasing figure from 7 % in 2020 to 7. % in 2021. Decreasing figures resulting in lower performance of the company because Padini have poor management controls in their operation cost.

6 DATA VISUALIZATION BETWEEN CHEETAH HOLDINGS BERHAD AND PADINI HOLDINGS BERHAD LIQUIDITY RATIO

LEVERAGE RATIO

Profitability ratio.

The use of financial statement analysis is to review the financial statements of a company or organization. These financial statements also include the income statement, cash flow statement and supplementary notes. The analysis of this statement will be seen by outsiders such as investors, credit agencies, government agencies and even the public to see liquidity or the ability to pay short-term and long-term debt.

Firstly, from the analysis we can see that Cheetah Holdings Berhad can give corporation to pay their short-term obligations using current assets better than Padini Holdings Berhad. The higher the ratio the better the performance in liquidity of the company. The ability to pay the obligations means that the company has a more significant of safety to pay off debt obligations.

Secondly, Cheetah Holding Berhad also has better performance in terms of leverage ratios. Leverage ratio is important because company rely on the equity and debt to finance their operation and they can see whether they can pay their debt when its due. Leverage ratios less than one is considered good in the financial positions. If the ratios more than one, it is considered risky by the lenders.

Thirdly, in the term of asset management ratios of Padini Holdings Berhad has better performance than Cheetah Holdings Berhad. It means that Padini Holdings has great efficiency in using their cash or sales. It is important to make an analysis of asset management as it can detect wether the assets are liquidity or fixed. The higher the ratios the better the performance in financial positions.

Lastly, profitability ratios are important to attract investors. If the company can generate more profits, it shows that the company running smoothly. The investors can make future investments with the company. From the data visualization we can see that, Padini Holdings Berhad generates more profits in investment and sales than Cheetah Holdings Berhad. The higher the profitability ratios the better the performance.

In conclusion, Cheetah Holdings Berhad has the best performance while Padini Holdings Berhad has the worst. From the data visualization, Cheetah Holdings roses in profitabilty ratios and liquidity ratios from the year 2020 to 2021. The debt ratios also decrease from the year 2020 to 2021. In the meantime, Padini Holdings shows that their profitability and asset management ratio is decreasing from the year 2020 to 2021.

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Course : Business Analytics (FIN534)

University : universiti teknologi mara.

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