ABSTRACT

This analysis purposely to get the expected results from trading in the stock market is acquiring
good evaluation of GLOMAC BERHAD Company performance ratio to. Similarly, this analysis
aims to analyze the financial performance ratio in term of receivable and total asset returnable
ratio for GLOMAC BERHAD as Property companies which are listed in the main market of
Malaysian stock exchange and BURSA Malaysia. The data that Im gather from the annual
reports of GLOMAC BERHAD Company during last five years from 2008 to 2012 and analyzed
by financial statement analysis tools, which are financial ratio analysis and comparative financial
statement analysis. The findings of the analysis will help companies to judge their present
condition and take decisions about their future steps while taking into consideration financial
issues. In order to get a broader view and generalized idea about the financial issues of
companies, how efficient of return and asset, resources and management also the nature of
business and industry average should be taken into account.
This comprehensive SWOT profile of GLOMAC BERHAD provides in-depth strategic SWOT
analysis of the companys businesses and operations. The profile has been compiled by Global
Data to bring a clear and an unbiased view of the companys key strengths and weaknesses and
the potential opportunities and threats

INTRODUCTION
Currently there have a lot of Property company in Malaysia that eagle to expand their business in
Property and development as per expand of Malaysia economies and higher demand on the
Property assets. This is significantly important for company in the stock market since their
performance has a great influence on investors to make a decision as to buy shares from them.
The important of this analysis is for identifying how efficient of return on investment and the
resources and impacted to management. Since the annual report reflects the commercial reality
of the company concerned and financial statement analysis could be beneficial for making
informed decision regarding investment in stock market. The statement analysis can be
considered as a method for evaluating the company performance and verifying the company
proximity to ideal benchmark in particular in developing countries like Malaysia where the
investments level has an increasing trend. Similarly, the objective of this analysis is evaluating
the financial condition of Malaysian Developer Companies like GLOMAC BERHAD in order to
determine the competent firm with respect to various perceptions.
LITERATURE REVIEW
The financial education is vital for progress toward proper utilization of cash and coping with
budget deficits and constrains. This study critically reviews the literature related to financial
analysis as a consideration for investment it also elaborates on importance of financial statement
analysis and its development. From this analysis I believed that financial statements analysis is
mainly concerned with the understanding of company accounts and interpretation of the
published financial statements in order to enable legitimate users to make informed economic
decisions. On the other, hand I have defined financial statement analysis as an information

processing system which is designed to provide data for decision makers. The information is
basically derived from published financial statements, but in the process of analysis the use is
also, made for non-accounting data such as stock prices and aggregate economic indicators. So,
Financial Statement Analysis is an essential tool for making an informed decision. I also asserted
that financial analysis is used in evaluating a company economic situation and predicting its
future course for various reasons, including investment purposes. This is importance and will be
increased when it is used as a determinant for investing and to identify the effectiveness of
resources and efficiency in management of the company. In this regard, analysis has been
undertaken on the significance of financial statement for investors to make decision and the
importance of utilizing it in the stock market. In the stock market, the operating status is the
pivotal factor for the stock value. It could be reflected by the financial statement. Therefore,
analyzing and researching the account elements from the financial statement are very crucial. If
the advanced analyses could be done for these items, there will be more awareness of the
financial and operating status of those stock companies. Certainly it will be helpful for the
company to evaluate and critically identify the market capitalization by analysis on return on
asset and resources also management. Besides, compared with the technical indices, these
indices are much more reliable, nonvolatile and valid.

COMPANY BACKGROUND
GLOMAC BERHAD
Glomac Berhad (Glomac) is a real estate developer engaged in the development and selling of
residential and commercial properties and land. The company principally operates through four
business segments namely, property development, property investment and management,
construction and car parking management services. The company provides construction services
through its subsidiary, Glomac Bina Sdn Bhd which serves residential and commercial markets.
Glomac operates its businesses through its 40 subsidiaries. The company has presence in
Malaysia, Australia, and Thailand. Glomac is headquartered in Petaling Jaya, Malaysia. Glomac
traces its corporate history back to 1988, when the two entrepreneurs and founders of the Group,
Tan Sri Dato' FD Mansor, Group Executive Chairman and Datuk Richard Fong, Group
Executive Vice Chairman, joined forces to start Glomac. The company is currently helmed by
Dato' FD Iskandar, Group Managing Director / Chief Executive Officer. Today, Glomac Berhad
comprises more than 55 subsidiaries with involvement in every face of the real estate business
encompassing property development, property investment, construction, property management
and car park management. Glomac Berhad was listed on the Main Board of Bursa Malaysia
Securities Berhad on 13 June 2000. Property development remains the core focus of the Group
since its inception. With this, it continues to affirm the Group's reputation as a responsible and
visionary property developer with its sold record of developing townships, residential,
commercial and mixed development properties. To-date, the Group has completed more than a
total sales value over RM4 billion. Moving forward, Glomac is entering into a new phase of
growth as it is in the midst of launching more than RM1 billion worth of property. As a long
term player committed to escalating our presence in the real estate market particularly focusing

in the prime area of the Greater KL, where the Group is well established. Glomac is continuously
planning and designing new projects for our existing landbank, and evaluating new landbank
opportunities and looking out for new opportunities in the country.
VISION
Our vision is to help improve the quality of life by providing a better place for all to live, work
and play. By carrying out this vision, we want to be recognized by our customers, shareholders
and employees as a world-class property developer.
MISSION
Our mission as a caring and reliable property developer is to deliver outstanding service, quality
products and value for money for our customers. Through dedication, innovation and passion, we
are confident about our ability to achieve these goals.
METHODOLOGY
Before Im examining into the different ratios and how they work, lets me briefly discuss where
Im find the data for each ratio. The first step in ratio analysis is to find the data. For the ratios
that Im taking through will be using a company, GLOMAC BERHAD. All the data for these
examples will be provided, but when Im deciding to do this on my own there are several
different areas where i can find the latest financial figures for a particular company. Finding
financial reports is easier than ever thanks to the Internet, here are some sources:

Company Websites - Almost every public company has a website or investor

relations department. For the most current quarterly or annual report you might want

to check in these places first. GLOMAC BERHAD is an excellent example of a

company that uses the web to get information out to shareholders and prospective
investors. It takes no time at all to find their investor relations section.

Kuala Lumpur Stock Exchange (KLSE) - The information posted in the electronic
gathering, analysis and retrieval database includes the annual report, quarterly report
and a myriad of other forms that contain every type of financial data.

Yahoo! Finance - A touchstone for many individual investors, Yahoo! Finance is a

great resource for financial news, and lays out ratios and performance data for
individual companies.

Bursa Malaysia - A great site for company analysis and annual report and some of
the data requires a subscription.

RATIO ANALYSIS
Ratio analysis is not just comparing different numbers from the balance sheet, income statement
and cash flow statement. It's comparing the number against previous years, other companies, the
industry or even the economy in general. Ratios look at the relationships between individual
values and relate them to how a company has performed in the past, and how it might perform in
the future. For example, current assets alone don't tell us a whole lot, but when we divide them
by current liabilities we are able to determine whether the company has enough money to cover
short-term debts. In this analysis I will show how to use ratio analysis to analyze financial
reports. Comparing these ratios against numbers from previous years, other companies, industry
averages and the economy in general can tell us a lot about where a company might be headed.
Valuing a company is no easy task. This analysis will show some light on how it can be done

and, ultimately, help us to make more informed choices as an investor and to know how efficient
the resources in management.

Definition of receivable turnover ratio

The receivable turnover ratio (debtor turnover ratio, accounts receivable turnover ratio)
indicates the velocity of a company's debt collection, the number of times average receivables
are turned over during a year. This ratio determines how quickly a company collects outstanding
cash balances from its customers during an accounting period. It is an important indicator of a
company's financial and operational performance and can be used to determine if a company is
having difficulties collecting sales made on credit.

Receivable turnover ratio indicates how many times, on average, account receivables are
collected during a year (sales divided by the average of accounts receivables). A popular variant
of the receivables turnover ratio is to convert it into an Average collection period in terms of
days. The average collection period (also called Days Sales Outstanding (DSO)) is the number of
days, on average, that it takes a company to collect its accounts receivables, example like the
average number of days required to convert receivables into cash. An accounting measure used
to quantify a firm's effectiveness in extending credit as well as collecting debts.

Calculation (formula)

Receivables turnover ratio = Net Credit sales/ Average accounts receivables

Accounts Receivable outstanding in days:

Average collection period (Days sales outstanding) = 365 / Receivables Turnover Ratio

Norms and Limits

There is no general norm for the receivables turnover ratio, it strongly depends on the industry
and other factors. The higher the value of receivable turnover the more efficient is the
management of debtors or more liquid the debtors are, the better the company is in terms of
collecting their accounts receivables. Similarly, low debtors turnover ratio implies inefficient
management of debtors or less liquid debtors. But in some cases too high ratio can indicate that
the company's credit lending policies are too stringent, preventing prime borrowing candidates
from becoming customers. We can obtain the net credit sales figure from the income statement
of a company. Average accounts receivable figure may be calculated simply by dividing the sum
of beginning and ending accounts receivable by 2. The beginning and ending accounts receivable
can be found on the balance sheets of the first and the last day of the accounting period.
Accounts receivable turnover is usually calculated on annual basis, however for the purpose of
creating trends, it is more meaningful to calculate it on monthly or quarterly basis.
Analysis
Accounts receivable turnover measures the efficiency of a business in collecting its credit sales.
Generally a high value of accounts receivable turnover is favorable and lower figure may
indicate inefficiency in collecting outstanding sales. Increase in accounts receivable turnover
overtime generally indicates improvement in the process of cash collection on credit sales.
However, a normal level of receivables turnover is different for different industries. Also, very
high values of this ratio may not be favourable, if achieved by extremely strict credit terms since
such policies may repel potential buyers.

Examples
Net credit sales of Glomac Company during the year ended of, 2008 were RM 324,334,994. The
average accounts receivable at same year is RM 35,538,318. Calculate the receivables turnover
ratio.
Solution
Receivables Turnover Ratio = RM 324,334,99 / 35,538,318 = 9.126346
Please find below calculation for the 5 year receivable turnover ratio for Glomac company

Revenue
receivable
Account Receivable
Turnover
Days sales Outstanding

2008
324,334,994
35,538,318

2009
345,266,254
17,709,229

2010
316,755,877
35,153,560

2011
597,477,728
25,502,087

2012
652,406,076
40,651,282

9.126346216 19.49640236 9.010634399 23.42858167 16.04884382

39.99409965 18.72140271 40.50769167 15.57926148 22.74307134

Analysis
From the calculation of Receivables Turnover Ratio for the years of 2008 to 2012 we can see
that the Accounts receivable turnover for the year of 2011 measures the efficiency of a business
in collecting its credit sales. The high value of accounts receivable turnover is 23.43% with 15.57
days of sales outstanding favorable followed by years 2009 with 19.50% with 18.72 days of sales
outstanding and years 2012 is 16.05% with 22.74 days sales outstanding lower figure may
indicate inefficiency in collecting outstanding sales which is in years 2008 and 2010 with 9.13%
with 40 days sales outstanding and 9.01% with 40.50 days sales outstanding is among the least
efficiency within 5 years comparison. Increase in accounts receivable turnover overtime
generally indicates improvement in the process of cash collection on credit sales and 2011
measures the efficiency of a business in collecting credit sales.

Definition of Asset Turnover

The amount of sales generated for every dollar's worth of assets. It is calculated by dividing sales
in dollars by assets in dollars. Also known as the Asset Turnover Ratio. Asset turnover measures
a firm's efficiency at using its assets in generating sales or revenue with the higher the number
the better. It also indicates pricing strategy companies with low profit margins tend to have high
asset turnover, while those with high profit margins have low asset turnover. This ratio is more
useful for growth companies to check if in fact they are growing revenue in proportion to sales.
Formula:
Asset Turnover = Revenue / Assets

Revenue
Total
Asset
Asset
Turnover
Return On
Asset

2008
324,334,994

2009
345,266,254

2010
316,755,877

2011
597,477,728

2012
652,406,076

1,270,403,196

1,132,076,154

1,154,027,105

1,354,881,834

1,353,135,907

26%

30%

27%

44%

48%

2.8%

2.8%

3.5%

4.6%

6.3%

Analysis
From the analysis the sales of Glomac increasing by year to year from 2008 to 2012 where we
can see the percentage of asset turnover and return on asset increasing every year. When look at
the revenue also the company growth in increasing the revenue from year to year to show that
the company gain profit for their investment. From year 2008 to 2009 and 2011 to 2012 the
revenue increase by 4% and from 2009 to 2010 the revenue increase by 3%. But when looking at
the year 2010 to 2011 the revenue highly increase by 17% to show that great increasing in 2011.
The Asset Turnover Ratio by five year measures a firm's efficiency at using its assets in

generating sales or revenue with the higher increasing every year. It also indicates pricing
strategy companies with low profit margins tend to have high asset turnover, while those with
high profit margins have low asset turnover. This ratio is more useful for growth companies to
check if in fact they are growing revenue in proportion to sales. The most efficient year in
generating sales or revenue and maintain low profit margin is in years 2011 to 2012 with return
on asset is 4.3% and 6.3% and rate of asset turnover is 44% to 48%.
Definition of Liquidity Ratios
Liquidity ratio is a class of financial metrics that is used to determine a company's ability to pay
off its short-terms debts obligations. Generally, the higher the value of the ratio, the larger the
margin of safety that the company possesses to cover short-term debts. Common liquidity ratios
include the current ratio, the quick ratio and the operating cash flow ratio. Different analysts
consider different assets to be relevant in calculating liquidity. Some analysts will calculate only
the sum of cash and equivalents divided by current liabilities because they feel that they are the
most liquid assets, and would be the most likely to be used to cover short-term debts in an
emergency. A company's ability to turn short-term assets into cash to cover debts is of the utmost
importance when creditors are seeking payment. Bankruptcy analysts and mortgage originators
frequently use the liquidity ratios to determine whether a company will be able to continue as a
going concern. Total debt need to be below than 50% to show that company is able to paying
creditor.
Formula:
Current ratio = Current asset - current liability
Quick Ratio (Acid Test Ratio) = [total current asset-inventory]/total current liability

Debt/equity = Total debt / Total equity

LIQUIDITY
RATIOS
Current ratio
Quick Ratio
Total debt ratio

2008
2009
2010
2011
2
2
2
1
1.779186996 1.480938307 1.634879237 1.338765299
59%
53%
49%
51%

2012
2
1.977115546
48%

Analysis
For the analysis we can say that Glomac liquidity ratio is maintain for the five year with 2%
accept for the year of 2011 with 1%.Liquidity ratio is a class of financial metrics that is used to
determine a company's ability to pay off its short-terms debts obligations. For the five year
Glomac at the margin of safety that the company possesses to cover short-term debts. But interm
of total debt ratio where Glomac facing high debt and company do not have ability to turn shortterm assets into cash to cover debts is of the utmost importance when creditors are seeking
payment. When we looking at the debt ratio where from 2008 to 2012 the ratio is considered
high except for the year of 2010 and 2012 where below than 50% of total debt. Bankruptcy
analysts and mortgage originators frequently use the liquidity ratios to determine whether a
company will be able to continue as a going concern.

CONCLUSIONS
Performance analysis is the process of evaluating businesses and other finance-related entities to
determine their suitability for investment and return on asset. Typically, performance analysis is
used to analyze whether an entity is stable, solvent, liquid, or profitable enough to be invested in.
One of the most common ways of analyzing financial data is to calculate ratios from the data to
compare against those of other yearly comparable company. In financials, performance ratios are
categorized according to the financial aspect of the business which the ratio measures:
Profitability, Asset Utilization, Capital Structure on a specific tab, Financial Ratios. This study
conducts a comparative of five years company performance ratio as a measurement for the
Glomac as Property and developer companies with the help of Financial Statement Analysis
tools. The results of analysis are how the performance ratio in term of receivable ratio, liquidity
ratio asset turnover ratio and return on asset that Glomac Company had for the past five year and
which year that glomac perform with different behavior toward of ratios which made overall
judgment about their performance impossible. Hence, the performance of firms was analyzed
with respect to different perceptions which shown that the years 2011 is preferred by its
competency regarding to profitability and liquidity ratios and performance in efficiency of the
management and resources as a result of being more attractive with respect to asset management
and market test ratios. On the other hand, we can identify which years that Glomac perform and
which years it facing inefficient of management performance. From that analysis will make
Glomac improve their management and implement the strategies to increase the performance
ratio and to be more efficient on resources and increase return on asset. The findings of analysis
provide the chance for Glomac companies to judge their present condition and take decisions
about their future steps while taking into consideration financial issues. To have a more reliable

judgment about companies performance it could be of benefit to compare yearly company

performance with their counterparts of the same business nature in addition, the industry average
can be taken into consideration. Indeed, a survey based study can be conducted to determine the
most attractive company according to share traders which will examine whether profitability or
market test ratios have more significant relationship with company performance from share
traders point of view.

REFERENCE
1. http://www.glomac.com.my/
2. http://www.investopedia.com/terms/l/liquidityratios.asp
3. http://finance.yahoo.com/
4. http://www.bursamalaysia.com/market/
5. http://www.klse.info/