Dutch lady milk industry berhads financial statement analysis

September 11, 2017 General Studies

Harmonizing to www.valuebasedmanagement.net ( 2010 ) , current ratio is defined as “ A theoretical account of mensurating the liquidness of a company by ciphering the ratio between all current assets and all currents liabilities. ” It means current ratio is portion of measuring tools for company to measure the fiscal stableness. It is utile in guaranting whether the company has adequate resources to settle its debt over following twelvemonth.

Refer to postpone 2.1, the current ratio of 2.0 shows that the company is acceptable. As an industrial company, the ratio shows Dutch Lady has adequate assets to cover its liability for another 12 months.

2.1.2 Quick Ratio

Quick ratio is defined as “ A theoretical account of mensurating the liquidness of a company by ciphering the ratio between all assets rapidly exchangeable into hard currency and all current liabilities. ” ( www.valuebasedmanagement.net, 2010 ) , It means that this ratio is similar to current ratio but the lone different is the stock list will be deducted in plus. The point is to guarantee the company ‘s ability to settle its short-run debt.

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Refer to postpone 2.2, the speedy ratio for Dutch Lady is 1.41 times. It shows the company able to pay its short term debt from its current assets. Obviously, it is a good place for Dutch Lady to be in because the house able to run into its short-run debt without emphasis.

2.1.3 Entire Asset Employee turnover

Harmonizing to Christina Pomoni, entire plus turnover is defined as “ The operating public presentation of a house is examined with the usage of operating efficiency ratios. ” ( www.helium.com, 2010 ) . It merely defined the point of entire plus turnover is to guarantee the company equitability return on gross revenues is success by utilizing its assets.

For Dutch Lady company, refer to postpone 2.3, entire plus turnover shows 2.43 times which shows the company has made rapid gross revenues for the whole twelvemonth. The company utilize it plus efficaciously to bring forth gross revenues for 2009.

2.1.4 Inventory Employee turnover

Inventory turnover is defined as “ This ratio is a relationship between the cost of goods sold during a peculiar period of clip and the cost of mean stock list during a peculiar period. ” ( www.accountingformanagement.com, 2010 ) . It means that stock list turnover is used to mensurate speed transition of stock into gross revenues.

Based on table 2.4, the ratio of stock list turnover shows 6.98 which is consider as really high ratio for fabricating company. Dutch Lady has done a brisk concern over the whole twelvemonth by change overing its stock into gross revenues quickly.

2.1.5 Net Net income Margin

Mentioning to www.wisegeek.com ( 2010 ) , “ It is a figure that identifies how much net income is left after all revenue enhancements and other disbursals related to the operation of the concern have been settled. ” In other words, net net income border will demo how effectual the company is at cost control.

Based on table 2.5, the consequence shows 9 % of net net income generated by Dutch Lady. This per centum translate into pure net income of RM 5 436 000 from net income. Therefore, Dutch Lady has to increase figure of gross revenues by staying the cost to run into higher net net income in future.

2.1.6 Return on Assets ( ROA )

Tax return on assets is “ all about the return the company got over its assets. “ ( ezinearticles.com, 2010 ) . It gives thought on how effectual the company playing with its assets to gain net income.

Refer to postpone 2.6, the per centum shows 21 % return on assets. Dutch Lady has made such return derives from entire plus in the company. Firm can increase net income border or plus turnover to increase ROA.

2.1.7 Return on Equity ( ROE )

Harmonizing to www.qfinance.com ( 2010 ) , “ It is a relationship between net income and shareholders ‘ financess. ” It reveals on how much the house earns in comparing with entire equity of stakeholder in balance sheet.

Refer to postpone 2.7, the return shows 35 % of net income from the entire sum of investing in Dutch Lady. Meaning here is the investors or the proprietors have better returned for twelvemonth 2009. The house besides is suggested to increase its net income to possess better return in future.

2.1.8 Payout Ratio

Harmonizing to www.stock-market-investors.com ( 2010 ) , payout ratio is defined as “ The money that is paid out in the signifier of dividends by the company to its stockholders. ” It means that amount sum of money from gaining paid by the house as dividend to its stakeholder.

Refer to postpone 2.8, it shows that 70 % of dividend paid by Dutch Lady to its stakeholder. This ratio shows the company has good growing in its industry. Therefore, the house is able to pay such sum as dividend to its stakeholder.

2.1.9 Price to Earnings ( PE ) Ratio

Monetary value to net incomes is a “ Valuation ratio of a company ‘s current portion monetary value compared to its per-share net incomes. ” ( www.valuebasedmanagement.net, 2010 ) It means that PE ratio is use to mensurate how much does the investors are able to pay for each portions gaining.

For illustration, refer to postpone 2.9, the ratio stock shows 12.36. Dutch Lady has high hope for its stock in future by holding that ratio. Investors look at Dutch Lady PE ratio as an overpriced stock.

2.1.10 Return on Investment ( ROI )

Tax return on investing is defined as “ A step of the net income a house ‘s direction is able to gain with the entire assets. ” ( financial-dictionary.thefreedictionary.com, 2010 ) . It means that the ROI is used to depict pecuniary addition made by puting from bonds or stocks.

Refer to postpone 2.10, the ROI for Dutch Lady shows 29 % return. This per centum shows the house has made such net income from the money a concern proprietor puts into the concern. This ratio is a positive ratio in dairies industry where the return on investing could still be made by the proprietor.

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