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WESTMINSTER

I NTERN A TION A L COL LEGE


STUDENT NAME: SIROJIDIN BOYKULOV STUDENT ID NUMBER: ND/UZB/WIC/E1BABS/1010/631 STUDENT PASSPORT NUMBER: CE 1781478 COURSE: BACHELOR OF ARTS (HONS) BUSINESS STUDIES MODULE NAME: BUSINESS ACCOUNTING MODULE CODE: BAC 101 DATE OF SUBMISSION: 15TH AUGUST 2011 LECTURERS NAME: MR. FRANCIS SEMESTER: 1

BACHELOR OF ART (HONS) BUSINESS STUDIES

BUSINESS ACCOUNTING

Table of Contents
1.0. INTRODUCTION ................................................................................................................... 4 1.1. COMPANY BACKGROUND ............................................................................................ 4 1.2. PRODUCT SERVICES ....................................................................................................... 5 1.3. VISION AND VALUES...................................................................................................... 6 2.0. MANAGAMENT TEAM ........................................................................................................ 6 2.1. AUDIT COMMITTEE ........................................................................................................ 7 2.2. NOMINATION COMMITTEE ........................................................................................... 8 2.3. REMUNERATION COMMITTEE ..................................................................................... 8 3.0. INDUSTRY ANALYSIS......................................................................................................... 9 3.1. GROWTH RATE................................................................................................................. 9 3.2. COMPETITION, PLAYER, AND MARKET SHARE ...................................................... 9 3.3. SUPLIERS RESSURE ...................................................................................................... 10 3.3. CUSTOMER NEEDS, PREASSURE ............................................................................... 10 3.2. THREAT IN THE INDUSTRY......................................................................................... 10 4.0. RATIO ANALYSIS............................................................................................................... 12 4.1 PROFITABILITY ............................................................................................................... 12 4.1.1. GROSS MARGIN FOR COMPANY ......................................................................... 12 4.1.2. NET PROFIT MARGIN ............................................................................................. 12 4.1.3. RETURN ON CAPITAL EMPLOYED ..................................................................... 12 4.1.4. RETURN ON ORDINARY SHAREHOLDERS FUNDS ........................................ 13 4.1.5. RETURN ON EQUITY .............................................................................................. 13 4.2. LIQUIDITY RATIOS .................................................................................................... 13 4.2.1. CURRENT RATIO ..................................................................................................... 13 4.2.2. LIQUID RATIO/ACID TEST/QUICK ASSETS RATIO .......................................... 14 4.3. EFFICIENCY RATIO ....................................................................................................... 14 4.3.1. ASSETS TURNOVER ............................................................................................... 14 4.3.2. DEBTORS COLLECTION PERIOD ......................................................................... 14 4.3.3. CREDITORS PAYMENT PERIOD .......................................................................... 15 4.4. GEARING RATIO ............................................................................................................ 15 4.5. INTEREST COVER .......................................................................................................... 15 4.6. GROWTH RATIOS........................................................................................................... 15 4.6.1. EARNINGS PER SHARE .......................................................................................... 15

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4.7. DISCUSSION ON THE LIMITATIONS OF RATIO ANALYSIS ................................. 16 5.0 CONCLUSION ....................................................................................................................... 16 APPENDIX-1 ............................................................................................................................... 17 FINANCIAL STATEMENTS .................................................................................................. 17 APPENDIX-2 ............................................................................................................................... 22 WORKINGS ............................................................................................................................. 22 REFFERENCES ........................................................................................................................... 25 BIBLIOGRAPHY ......................................................................................................................... 25

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1.0. INTRODUCTION
It is important to mention that Genting Plantations Berhad engages in the oil palm plantation, property development, and genomics research and development businesses primarily in Malaysia and Indonesia. It also engages the processing of fresh fruit bunches; property investment; provision of project management services; research, development, and production of oil palm planting materials; and golf course operations. The company is headquartered in Kuala Lumpur, Malaysia. Genting Plantations Berhad is a subsidiary of Genting Berhad. During the year ended December 31, 2010, the Company produced 1.20 million metric tons of fresh fruit bunches. During 2010, the Company had a total planted area of 89,075 hectares of oil palm. During 2010, the Company acquired 70% interest in PT Surya Agro Palma (PTSAP). (Bursa Malaysia Stock Information, 2011)

1.1. COMPANY BACKGROUND


Genting Plantations Berhad ("Genting Plantations"), formerly known as Asiatic Development Berhad, is one of the fastest growing plantation companies listed on the Main Board of Bursa Malaysia (formerly known as Kuala Lumpur Stock Exchange). Genting Plantations Berhad is engaged in plantation, investment holding and provision of management services to its subsidiaries. The principal activities of the subsidiaries include plantation, property development, property investment and genomics research and development. The Company has four segments: plantation, property, biotechnology and others. Plantation is consists of activities relating to oil palm plantations. Property is consists of activities relating to property development, property investment and the operation of a golf course. Biotechnology is consists of activities relating to genomics research and development. Genting Plantations incorporated in Malaysia as a private limited company on 29 September 1977, under the name of Asiatic Development Sdn Bhd, it became a wholly owned subsidiary of Genting Berhad ("Genting") on 22 February 1980 to spearhead Genting's plantation business. The Company was listed on Bursa Malaysia on 30 August 1982. Genting Plantations currently ranks amongst the top 10 listed companies in terms of market capitalization in the plantation sector. As at 30 April 2009, Genting Plantations is a 54.7% owned subsidiary of Genting Berhad.

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The companys other activities include the operation of golf course in Malaysia. It has five oil mills in Johor and Sabah of Malaysia. The company is a subsidiary of Genting Berhad. Genting operates through its 26 direct subsidiaries, 17 indirect subsidiaries and four associate companies. (Genting Plantations Berhad, 2011)

1.2. PRODUCT SERVICES


As we mention above Genting Plantation Company engages in three area of business sections: plantation, property and genomic research development. Plantation 2010 was a year of contrasting developments for the oil palm plantation sector. In Malaysia, Gentin Plantation Company notably outperformed the broader national trend to register an increase in crop production for the year, on the back of an improvement in yields in the Sabah estates. Total production of fresh fruit bunches (FFB) reached 1.20 million metric tonnes in 2010, up from 1.16 million metric tonnes in 2009. The average FFB yield recorded by Genting Companys Malaysian estates in 2010 was 21.4 metric tonnes per hectare compared with 21.0 metric tonnes in the previous year. Genting Plantation Company achieved selling prices of palm products were considerably higher, with the average achieved price of CPO at RM2, 738 per metric tonne in 2010 compared with RM2, 236 in 2009. The average achieved palm kernel price was RM1, 754 per metric tonne, up from RM1, 063 in 2009. Property The Malaysian property market, hurt by the global recession at the close of the previous decade, bounced back impressively in 2010. The regional economic rebound galvanized investor sentiment, robust growth in property transactions in the country. Accommodative mortgage rates and low-down payment financing schemes offered by developers also buoyed buyer interest in residential properties, especially more affordably priced homes. The Property Division registered improved financial results in 2010. Revenue and adjusted EBITDA rose to RM88.3 million and RM12.2 million respectively, up from RM80.2 million and RM8.2 million in 2009. Gnomic research Genting Green Tech (GGT) GGT is an R&D centre set up to produce superior oil palm planting materials. GGTs research involves applying marker assisted selection (MAS) techniques for oil palm breeding, and screening and selection of superior parental oil palms for future seed production. It is a wholly-owned subsidiary of Genting Plantations and was

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awarded BioNexus status in 2009. MAS is a biotechnology tool that enables scientists to improve crops without resorting to alien genes or creating genetically modified organisms. Conventional plant breeding methods select plants based on phenotypic assessment from field records, while MAS uses genetic markers to identify the presence of a specific gene or combination of genes that have desirable traits, such as high yield and disease resistance. GGT aims to combine conventional oil palm breeding with todays knowledge of oil palm genomics to produce high yielding palms with desirable traits within a much shorter time frame. This is significant for oil palm breeding as one conventional breeding cycle can take up to 12 years. GGT signed a Memorandum of Agreement with the Department of Agriculture, Sabah (DOA Sabah) on 27 July 2010 for the development of superior oil palm planting materials. The collaboration combines DOA Sabahs oil palm breeding experience that spans 50 years with GGTs MAS platform technology. (Genting Plantations Berhad, 2011)

1.3. VISION AND VALUES


The main vision of Genting Plantation is to become a leader in the plantation industry. Besides, embarking aggressively onto value added downstream manufacturing activities which are synergistic to the company core business and to enhance return on the company land bank through property development activities. In addition to that the company adopts a market- driven and customer oriented approach, with emphasis on product quality and diversity. The value of the company will strengthen in competitive market by adopting new technologies and innovations As the HRM is the key to achieving the companys vision, accordingly the company is committed to develop its employees and create a highly motivating and rewarding environment for them. (Genting Plantations Berhad, 2011)

2.0. MANAGAMENT TEAM


The Board has overall responsibility for the proper conduct of the Companys business. The Board meets on a quarterly basis and additionally as required. The Board has a formal schedule of matters specifically reserved for its decision, including overall strategic direction, annual

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operating plan, capital expenditure plan, acquisitions and disposals, major capital projects and the monitoring of the Groups operating and financial performance. Formal Board Committees established by the Board in accordance with the Code namely, the Audit Committee, Nomination Committee and Remuneration Committee assist the Board in the discharge of its duties. LT. GEN. (B) DATO HAJI ABDUL JAMIL BIN HAJI AHMAD Independent NonExecutive Director

TAN SRI MOHD AMIN BIN OSMAN

TAN SRI LIM KOK THAY

MR QUAH CHEK TIN Independent NonExecutive Director

Chairman Chief Executive

2.1. AUDIT COMMITTEE


GEN. (B) TAN SRI MOHD ZAHIDI BIN HJ ZAINUDDIN Chairman/Independent Non-Executive Director LT. GEN. (B) DATO HAJI ABDUL JAMIL BIN HAJI AHMAD Member/Independent Non-Executive Director ENCIK MOHD DIN JUSOH Member/Independent Non-Executive Director MR QUAH CHEK TIN Member/Independent Non-Executive Director LT. GEN. (B) DATO ABDUL GHANI BIN ABDULLAH Member/Independent Non-Executive Director GEN. (B) TAN SRI MOHD ZAHIDI BIN HJ ZAINUDDIN Chairman/Independent Non-Executive Director LT. GEN. (B) DATO HAJI ABDUL JAMIL BIN HAJI AHMAD Member/Independent Non-Executive Director ENCIK MOHD DIN JUSOH Member/Independent Non-Executive Director MR QUAH CHEK TIN

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Member/Independent Non-Executive Director LT. GEN. (B) DATO ABDUL GHANI BIN ABDULLAH Member/Independent Non-Executive Director (Reuters , 2011)

2.2. NOMINATION COMMITTEE


LT. GEN. (B) DATO HAJI ABDUL JAMIL BIN HAJI AHMAD Chairman/Independent Non-Executive Director GEN. (B) TAN SRI MOHD ZAHIDI BIN HJ ZAINUDDIN Chairman/Independent, Non-Executive Director LT. GEN. (B) DATO HAJI ABDUL JAMIL BIN HAJI AHMAD Member/Independent, Non-Executive Director TAN SRI LIM KOK THAY Member/Chief Executive ENCIK MOHD DIN JUSOH Member/Independent, Non-Executive Director (Bloomberg Businessweek, 2011)

2.3. REMUNERATION COMMITTEE


GEN. (B) TAN SRI MOHD ZAHIDI BIN HJ ZAINUDDIN Member/Independent Non-Executive Director ENCIK MOHD DIN JUSOH Member/Independent Non-Executive Director (Reuters , 2011)

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3.0. INDUSTRY ANALYSIS


3.1. GROWTH RATE It can be clearly seen that the Plantation is the one of the most profitable business in Malaysia. According to statistics Genting Plantation Berhad has reached highest productivity of Palm oil 1,198,045 (FFB Production (T)) in 2010. During the year ended
December 31, 2010, the Company produced 1.20 million metric tons of fresh fruit bunches. During 2010, the Company had a total planted area of 89,075 hectares of oil palm. During 2010, the Company acquired 70% interest in PT Surya Agro Palma (PTSAP).

It is important to mention that the company revenue has increased dramatically. If we compare growth rate the highest revenue in the history of the Company was 2008. The Genting Plantation Berhad has achieved selling prices of palm products were considerably higher, with the average achieved price of CPO at RM2, 738 per metric tonne in 2010 compared with RM2, 236 in 2009. The average achieved palm kernel price was RM1, 754 per metric tonne, up from RM1, 063 in 2009. The Companys total oil palm area in Malaysia amounted to 59,662 hectares as at 31 December 2010, a marginal decline from the end of 2009. (Ecmlibra Investment Research, 2011)

3.2. COMPETITION, PLAYER, AND MARKET SHARE


Being competitive is the main purpose of any company in achieving customers satisfaction in the market place. We can underline that Genting Plantation Company put its afford to pure

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upstream palm oil play, with no midstrem or downstream operations which can compete with its competitors. GENP should mainly be seen as an upstream palm oil company (which contributes more than 96% of group PBT). In our opinion, it is considered one of the purer plays on CPO price strength like other companies under our coverage such as London Sumatra and Astra Agro, and thus offers a greater leverage to CPO prices during an up cycle, unlike other larger Malaysian planters such as Sime Darby, IOI Corp and Kuala Lumpur, which are main competitors and have downstream refinery and consumer oil pack exposure (where margins may be squeezed by higher palm oil feedstock prices),or even on palm oil related businesses. (bg.panlv.net, 2011)

3.3. SUPLIERS RESSURE


We understand that the Company has secured fertilizer requirements by suppliers as well as group itself for 1H11 (normally accounts for 60- 70% of full year requirement), and that there might be a slight increase in fertilizer prices by suppliers. Indicatively, fertilizer costs had not risen by much; potash prices had been stable at about US$500/MT. GENPs biotechnology division is unlikely to make any meaningful contribution with suppliers, despite the breakthrough in the completion of Ganoderma genome sequencing the genome data will enable scientists to better understand one of the most destructive diseases that can infect oil palms, Basal Stem Rot. It is importantthat GENP may start to offer its seedling identification services in FY13-FY14. (bg.panlv.net, 2011)

3.3. CUSTOMER NEEDS, PREASSURE


Customers needs which is the main feature of Genting Plantation company income grows. A more positive perception of the company in term of customer needs could go a long way toward helping them to provide highly measurable plantation products, property and modern biotechnology equipments.

3.2. THREAT IN THE INDUSTRY


Threat is the main downside in any company. The low biological crop cycle and capricious weather patterns had adverse effects on productivity. Consequently, crude palm oil (CPO) production in Malaysia fell for a second consecutive year in 2010, the first back-to-back annual

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decline in at least three and half decades. The national average oil yield contracted for the year, hitting the lowest level since 2002.Lower yields and falling CPO prices are key downside risks The key threat to any upstream plantations company is selling prices (especially give that producers are price takers, where prices are set by global markets). Here, downside threats to CPO prices would include: 1) If CPO production (together with other vegetable oils globally) comes in stronger than expected, or if extremely strong soybean crushing increase the overall supply of vegetable oils and lower realised CPO prices. 2) Changes in the import duty structure in China to favour substitutes such as soybean oil could alter world demand patterns and pose a downside risk to prices. 3) Slower-than-expected demand from main CPO consuming markets of China, India and the Eurozone due to demand destruction from the current high CPO prices. 4) Lower-than-expected biofuel demand, which could in turn reduce the demand for vegetable oils (including palm oil) globally. 5) Possible restrictive regulations if CPO prices (and other food commodities) continue its strength, posing a threat on consumer price inflation. 6) A quick withdrawal of managed money or portfolio funds (which have been buyers of agricommodity futures) could see a rapid softening of soft commodity prices Elsewhere, the next most important downside threat would be lower-than-expected CPO production. We are assuming 9% FFB production growth for the group in FY12F, which we think is conservative given that the young trees of Genting Plantation Berhad should provide a good base for growth. However, should production come in below our assumption, CPO production growth would suffer. The other negative threats to the group include not being able to maintain its planting targets, or commercialize the biotechnology venture, which it has so far sunk RM280mn, or lower-thanexpected footfalls in the Johor Premium outlets. (Nomura Securities Malaysia , 2011)

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4.0. RATIO ANALYSIS


4.1 PROFITABILITY
By doing calculations on profitability for the company, we can know how the company is making profit by using the capital which was put in the business. The calculations will show the profitability of the firm. It shows whether the company is using the resources in a useful way. (Investopedia ULC, 2011) 4.1.1. GROSS MARGIN FOR COMPANY The gross margin is not an exact estimate of the company's pricing strategy but it does give a good indication of financial health. Without an adequate gross margin, a company will be unable to pay its operating and other expenses and build for the future. In general, a company's gross profit margin should be stable. It should not fluctuate much from one period to another, unless the industry it is in has been undergoing drastic changes which will affect the cost of goods sold or pricing policies. (Investopedia ULC, 2011) The Gross Margin of Genting Plantation PLC (Public Limited Company) has a ratio of 50.35% and 54.09% from 2009 to 2010 respectively. It means that Genting Plantation had kept more profit on each dollar of sales. 4.1.2. NET PROFIT MARGIN It indicates whether the company is spending too much, or to low, simply it concerns with expenses. Is the company has a good control in expenses. (Frank & Sangster, 2008) The Net Profit Margin of Genting Plantation PLC has a ratio of 39.24% and 43.99% from 2009 to 2009 respectively. The expenses in 2010 were lesser than 2009.Genting Plantation had a good control on expenses. 4.1.3. RETURN ON CAPITAL EMPLOYED It is a primary ratio, which is fundamental measure of business performance. This ratio express the relationship between the operating profit generated during a period and the average

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long-term capital invested in the business during that period ital put in the business, besides it also shows efficiency and profitability on invested money. (McLaney & Atrili, 2010) The Return on Capital Employed of Genting Plantation has a ratio of 13.96% and 10.03%

from 2009 to 2010 respectively. The ROCE of Genting Plantation became better than 2009, company had less borrowings in 2010 and the amount of payable share prices was increased. 4.1.4. RETURN ON ORDINARY SHAREHOLDERS FUNDS The return on ordinary shareholders funds ratio compares the amount of profit for the period available to the owners, with the owners average stake in the business during the same period. It simply means, a payable dividend depends on the profit after tax. (McLaney & Atrili, 2010) 4.1.5. RETURN ON EQUITY The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. It means whether the company is using the investors money in profitable way, the higher the percentage higher the dividends. (Investopedia ULC, 2011)

4.2. LIQUIDITY RATIOS


Liquidity ratios are concerned with the ability of the business to meet its shortterm financial obligations. It means that in main time how does the company use the stock and sell it, whether the speed is fast or low, besides, this ratio indicates by making profit. (McLaney & Atrili, 2010) 4.2.1. CURRENT RATIO Current ratio means whether the company has enough money to run the business day to day basis. Division amount is normally 2:1. If the division is above the normal level means that company is not using the assets, if it is below the level there is not enough money to run the business, the company is facing liquidity problems. (Frank & Sangster, 2008) The Current ratio of Genting Plantation has ratio of 6.6 and 7.2 from 2009 to 2010 respectively. Genting Plantations business was running better than 2009, but it is still company has enough money to run the business in both years.

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4.2.2. LIQUID RATIO/ACID TEST/QUICK ASSETS RATIO Acid test shows how well the company is going to do well within the main time, company must have enough money to pay back to the creditors. The normal division is 1:1. If it is high that the company has much surplus cash resources. If it is low the company wont be able to pay their borrowed money. (Frank & Sangster, 2008) The Acid Test of Genting Plantation has a ratio of 6.5 and 7.2 from 2009 to 20010. The

capacity of paying to creditors had become better in 2010 than 2009.

4.3. EFFICIENCY RATIO


No matter what kind of business a company is in, it must invest in assets to perform its operations. It concerns with debtors collection and creditors payment period, how the company is making profit, using the stock in short or long time. Efficiency ratios measure how effectively the company utilizes these assets, as well as how well it manages its liabilities. (Stock 300 Investing classroom , 2010) 4.3.1. ASSETS TURNOVER How the company is using assets, if the breakdown (turnover) is higher the utilization (usage) of assets is better. (Stock 300 Investing classroom , 2010) The Assets Turnover of Genting Plantation has a ratio of 0.2 and 0.3 from 2009 to 2010 respectively. The Assets turnover of Genting Plantation had increased by 0.1, which is good for the company. 4.3.2. DEBTORS COLLECTION PERIOD How fast the company can collect money from the debtors that mean control on the giving credits. If ratio is high, company is facing problem on collecting money from the creditors. This problem can be solved by sending monthly statements of account of credits to remind them to pay the owing money. If ratio is high company is doing well. (Stock 300 Investing classroom , 2010) The Debtors Collection period of Genting Plantation has ratio of 2.2 days and 1.9 days from 2009 to 2010 respectively. The collection of owing moneys had become slower in 2010.

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4.3.3. CREDITORS PAYMENT PERIOD How fast the company is paying its credit, company must pay it on time. High ratio means payment of credits is slow, we can know from this ratio that if the ratio is high is high there are less cash in the company. If it is low ratio the company has enough money for payment or they have good relationship with suppliers, in other words suppliers demanding for payment without delay. (Stock 300 Investing classroom , 2010) The Creditors Payment period of Genting Plantation has a ratio of 69.8 days and 11.1 days from 2009 to 2010 respectively. The company was facing money problems; they didnt pay the credits promptly despite of 2 day faster than being in 2009.

4.4. GEARING RATIO


This ratio indicates the risk from financial crisis, risk from borrowings. If the Loan and Preference shares amount is higher than equity, it is said to be highly geared, which is bad for the company, company doesnt have enough money to pay off. (Accounting for managament, 2011) The Gearing Ratio of Genting Plantation plc has ratio of 0.14 and 0.15 from 2009 to 2010 respectively. In 2010 Genting Plantation was doing well, but in 2009 company had financial deficit.

4.5. INTEREST COVER


This item shows whether the company can pay off the all interests. Suppliers (loan givers) are more interested in this ratio, and if the ratio is high means company is doing well, it has got enough money to pay off. (Accounting for managament, 2011)

4.6. GROWTH RATIOS


It concerns with market value and shares, growth ratio is partly same as Long term liquidity ratio. (Accounting for managament, 2011) 4.6.1. EARNINGS PER SHARE We can know from this ratio how much return on share prices is. It is the most crucial ratio that ordinary shareholders are interested in. They are interested in what are the earnings per ordinary share. How many times can the company cover the investments. (Accounting for managament, 2011)

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The Earning per share of Genting Plantation has a ratio of 31.12p and 42.76 from 2009 to 2010 respectively.

4.7. DISCUSSION ON THE LIMITATIONS OF RATIO ANALYSIS


Not everything in the world is perfect, so the Ratio Analysis is also imperfect. The first limitation for Ratios is that companies may use different methods, different policy management, and intercompany comparison may be less accurate. For instance one company may use straight line depreciation method and another company may use reducing balance method. The second limitation is that ratios doesnt give solutions for problems, it only gives reports on the performance of a firm. The third limitation is outdated information, the calculated ratios in the past doesnt show the current economic position, means information gathered in the past doesnt match with present time. The last limitation is that they are generalised, for example Genting Plantation has very high stock turnover and property businesses has a low stock turnover, it doesnt mean that property business is not doing well, because properties are sold or purchased very fast.

5.0 CONCLUSION
None company or firm including Genting Plantation Company in the world can check whether is it making profit or loss, these are very common for business named liquidity ratios. Every business institutions use liquidity ratios. From the calculations done companies can know their position in business environment. By checking the results company can improve its economic situation. They know how assets are used, how the stock turnover and how efficiently they collecting money from debtors, and paying credits. Company directors can know about the return on investments, means money from the selling shares, how profitably are they using that money in order to run the business. And the investors (shareholders) are also interested in these ratios like earnings per share. If the return is high the relationship between customers and the company will grow further. By all these above this is the way how to check the companys business actions for making profit. If these ratios dont exist there wont any order, for example they dont know how much they owe and borrow, and all information will be mixed.

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APPENDIX-1
FINANCIAL STATEMENTS

INCOME STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

Amounts in RM000 unless otherwise stated

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STATEMENT OF FINANCIAL POSITION


AS AT 31 DECEMBER 2010

Amounts in RM000 unless otherwise stated

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STATEMENT OF FINANCIAL POSITION


AS AT 31 DECEMBER 2010 (CONTD)
Amounts in RM000 unless otherwise stated

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STATEMENTS OF CASH FLOWS


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010

Amounts in RM000 unless otherwise stated

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STATEMENTS OF CASH FLOWS


FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2010 (CONTD)

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APPENDIX-2
WORKINGS

Profitability
1 Formulas Gross Margin= 2010 2009
x100%
x 100%

= 50.35%

2010

2009

Profit Margin=

x 100%

x 100% = 43.99%

x 100% = 39.24%

3 Return on capital employed= = x 100%

2010

2009

x 100% = 13.96%

x 100% = 10.03%

Capital Employed= =Share capital +reserves +Long term Liabilities (non-current liabilities)

379,423 + 2,730,463 + 4,845 = 3,114,731

378,973 +2,572,376+ 4,223 = 2,955,572

Efficiency
1 Formulae ASSETS TURNOVER= 2010 2009

= 0.3 times

= 0.2 times

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Total Assets=Fixed Assets+Current Assets

2,385,057+847,078=3,232,135 2,440,995+605,896=3,046,891

Efficiency ratio DEBTORS COLLECTION PERIOD= = x 365 days

2010

2009

365 days=1.9 days 2010

365 days=2.2 days 2009

Efficiency ratio CREDITORS PAYMENT PERIOD= = x 365 days

365 days= 11.1 days

365 days= 9.8 days

Efficiency ratio FIXED ASSET TURNOVER=

Liquidity ratios/Solvency ratios


Short term
1

Liquidity ratio
ACID TEST/LIQUID RATIO/QUICK ASSETS RATIO=

2010

2009

7.2:1
2

6.5:1
2009

Liquidity ratio
CURRENT RATIO=

2010

7.2:1

6.6:1

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BACHELOR OF ART (HONS) BUSINESS STUDIES

BUSINESS ACCOUNTING

Capital Structure
1 Capital Structure 2010 2009

GEARING= =
( ( ) )

Investors Ratio
Investors Ratio Return on capital employed (ROCE)=
100%

2010

2009

= 13.9%

= 10.03%

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BACHELOR OF ART (HONS) BUSINESS STUDIES

BUSINESS ACCOUNTING

REFFERENCES
Accounting for managament , 2011. Current ratio. [Online] Available at: http://www.accountingformanagement.com/current_ratio.htm. Accounting for managament, 2011. Liquidity or Acid Test or Quick Ratio. [Online] Available at: http://www.accountingformanagement.com/liquid_ratio.htm. bg.panlv.net, 2011. [Online] Available at: http://www.einvest.com.my/ArchiveCompanyFocus/1.%20Company%20Focus/By%20Company%20Name/Counter%20Name%20A %20-%20L/GENP%2020110128%20Update.pdf. Bloomberg Businessweek, 2011. GENTING PLANTATIONS BHD. [Online] Available at: http://investing.businessweek.com/research/stocks/people/people.asp?ticker=GENP:MK. Bursa Malaysia Stock Information, 2011. BursaWave.com. [Online] Available at: http://www.bursawave.com/stock-search/stock/genting-plantations-bhd-1985/. Ecmlibra Investment Research, 2011. Genting Plantation. [Online] Available at: http://www.ecmmoney.com/wpcontent/uploads/downloads/2010/08/GENP_100826_2QFY10.pdf [Accessed 26 August 2010]. Genting Plantations Berhad, 2011. Genting Plantation. [Online] Available at: http://www.gentingplantations.com/aboutus/background.htm. Genting Plantations Berhad, 2011. Genting Plantations. [Online] Available at: http://www.gentingplantations.com/plantation/index.htm. Investopedia ULC, 2011. Gross Profit Margin. [Online] Available at: http://www.investopedia.com/university/ratios/grossprofitmargin.asp. Investopedia ULC, 2011. Profitability Ratios. [Online] Available at: http://www.investopedia.com/terms/p/profitabilityratios.asp#axzz1USeuFw1e. Investopedia ULC, 2011. Return On Equity - ROE. [Online] Available at: http://www.investopedia.com/terms/r/returnonequity.asp#axzz1USeuFw1e. Nomura Securities Malaysia , 2011. Genting Plantation. [Online] Available at: http://bg.panlv.net/file2/2011/03/08/94ad26b6f290bece.pdf [Accessed 8 March 2011]. Reuters , 2011. Genting Plantations Bhd (GENP.KL). [Online] Available at: http://www.reuters.com/finance/stocks/companyOfficers?symbol=GENP.KL. Stock 300 Investing classroom , 2010. Efficiency Ratios. [Online] Available at: Efficiency Ratios.

BIBLIOGRAPHY
Frank, W. & Sangster, A., 2008. Business Accounting. 7th ed. Edinburg Gate, Harlow,Essex CM 20 2JE: Pearson Education Limited. McLaney, A. & Atrili, a.P., 2010. Accounting anintroduction. 5th ed. Edinburg Gate,Harlow, Essax CM20 2 JE England: Pearson Education Limited.

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