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BSP 200 Bachelor of Arts (HONS) Business Studies 1/1/2011 MD. Shahadat Hossain 060DBKL0610 Semester 3
LETURER
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The working Capital Cycle Ratio of Carlsberg shown in pie chart below:
2.1 Debtors Collection Period: Debtors collection period is the number of times by
which debtors are payable to the business during the companys target time to collect cash. The shorter time between sales and collecting cash indicates well for business. Here from the appendix-2, in 2011 the debtors collection period of Guinness Anchor Bhd is 5.89 days. The shorter period of time of collecting money from debtors is good for the GAB. On the other hand, Carlsberg Malaysias debtors collection period in 2010 was 26.9 days. To compare
MD. Shahadat Hossain Semester 3
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capital surpluses and other fixed interest bearing funds or debt ratio represents the relationship between the equity share capital. Gearing is the measurement of the risk as per the capital
providers and equity share holders of the business. When the long term loan and preference share are higher than equity share holder that means, the company is in high risk. Therefore, too much debt is risky for business, again too less debt also means different that business is not so potential. (accountingformanagement, 2011). The gearing ratio of Carlsberg is 7.1% in 2010. This result of ratio is indicating that the financial risk of Carlsberg Malaysia Bhd is low.
3.2 Interest cover ratio: The interest cover ratio is used to determine a companys ability
to how easily can pay its interest payment. The higher ratio is indicates the companys better financial health and its means that the company is more capable to meeting its interest rather than operating earnings. (Loth, 2011). The interest cover ratio of GAB is 83 times in 2011. This ratio result is good because this companys financial health is better. However, Carlsbergs interest cover ratio is 51.1 times in 2010. The condition of interest cover of GAB is better than Carlsberg Malaysia Bhd.
4. Investors Ratios
The investor ratios are the main measurement of a companys capability of returning profit for the shareholders and investor in a company. This ratio evaluates return on capital
MD. Shahadat Hossain Semester 3 Page 7
Investors Ratios
ROCE(GAB) 48.17%
EPS(GAB) 60 Sen
ROCE(Carlsberg) 24.59%
4.1 ROCE: A satisfactory return on investment in business capital investment, the main
objective is to obtain. Thus, the capital employed to realize these objectives, the business is successfully used as a measure. In the business it used to show the overall efficiency and profitability of the business. (accountingformanagement, 2011). From the appendix-2 the ROCE of GAB is 48.17% in 2011. On the other hand the Carlsbergs ROCE is 24.59 in 2010. This result shows that the GABs profitability ratios are better than Carlsbergs ratios.
4.2 EPS: Earnings per share determine the ratio that allows the net income of company. The
measure of net income is based on the profit as per share. For this ratio, higher is better. If the company acquires more value for per share, this means that the financial position of the company is better and it can meet its stakeholders value. The earnings per share ratio of GAB is 60 sen in 2011 and 43.58 sen for Carlsberg Malaysia Bhd in 2010. This ratio shows that the GABs EPS ratio is better than Carlsberg Malaysia Bhd. The earnings per share ratio and dividend per share of GAB show on graph below: (gap, 2011)
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5. Appendix-1:
Guinness Anchor Berhad Income Statement For the year ended 30 June 2011
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Carlsberg Malaysia Berhad Income Statement For the year ended 31st December 2010
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= 22 days Stock Turnover= 365 = 10.69 days CAPITAL STRUCTURE Gearing ratio=
365 days
= 51.1 times
=24.59%
60
43.58
7. Environmental Factors
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8. Corporate governance
8.1 GAB: The Board of Directors (the Board) of Guinness Anchor Berhad is committed to ensure that the business of high-quality ethics and corporate governance are discussed through the implementation and the practice of group effective policies and good governance. The company adheres to principles good corporate governance, which has to contribute to the group's achievement strategic objectives and business value. This has led group to achieve long-term sustainable financial Increase efficiency. The principles are adopted by the company in accordance with the principles and practices of the Malaysian code on corporate governance and the Malaysian International Chamber of Commerce and industrys ethics charter. (gab, 2011) . The governance and management system in the organization shown below: (gab, 2011)
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8.2 Carlsberg: Carlsberg companies board of directors is fully committed to ensure the highest standards of corporate governance including accountability and transparency are practiced by the company and throughout the group as a fundamental part of discharging its responsibility to protect and enhance shareholder value and the financial performance of the group. Carlsberg also (carlsbergmalaysia, 2011) practice the Malaysian Code on Corporate Governance.
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11.Future Investment
11.1 GAB: Guinness Anchor Berhad is good for future investment. I will prefer to invest on this company this is because worldwide and large group of company and the company making profit and the devidend per share is 54.0 and the revenue growth is 9.6% in 2011. The reasons of investing money on this company we can understand from those line graph shown below: (gab, 2011)
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11.2 Carlsberg: This company is also suitable for investment. On the otherhand to comapre this company with GAB it is small. The revenue of carlsberg is RM13682 million in 2010. The reasons of investing on this company are shown in line graph below: (carlsbergmalaysia, 2011)
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13.2 Carlsberg: Carlsberg devidend per share is rais in 2009 58 sen this is because Carlsberg Singapore Pte Ltd for 370 million. Carlsberg dividend was improved from 23 sen to 58 sen in 2009. Carlsberg revenue increase 30.9% of 1,37 billion profit in the financial year of 2010. Carlsberg paying dividend to the shareholders 50% to 70 % from annual profit. Of December 30th, 2010, Carlsberg had net cash per share of 16 sen. The analysts respect that the company had a net cash per share of 11 sen as the financial year ending on December 31st, 2011. Carlsberg paying higher dividend due to positive cash flow and competitiveness. (SAY, 2011)
Bibliography
accountingformanagement, 2011. www.accountingformanagement.com. [Online] Available at: http://www.accountingformanagement.com/capital_gearing_ratio.htm. accountingformanagement, 2011. www.accountingformanagement.com. [Online] Available at: http://www.accountingformanagement.com/capital_gearing_ratio.htm. accountingformanagement, 2011. www.accountingformanagement.com. [Online] Available at: http://www.accountingformanagement.com/return_on_capital_employed.htm. Ankur, 2011. www.expertscolumn.com. [Online] Available at: http://expertscolumn.com/content/human-resource-management-nature-scope-objectives-andfunction [Accessed 24 July 2009].
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