Edited Research Final
Transcript of Edited Research Final
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TABLE OF CONTENT
1.0 INTRODUCTION OF STUDY 1
1.1 BACKGROUND OF STUDY 2 - 3
2.0 PROBLEM IDENTIFICATION 4
2.1 OBJECTIVES, SCOPE AND STUDY QUESTION 5 - 6
3.0 ELEMENTS CONTRIBUTING TO ISSUE 7
3.1 LITERATURE REVIEW 7
3.2 FIRMS FINANCIAL POSITION 7
3.3 FACTORS AFFECTING SALES 7
3.4 PERFORMANCE OF SALES 8
4.0 CASE STUDY METHODOLOGY 9
4.1 PRIMARY DATA 10
4.1.1 FACE-TO-FACE INTERVIEW 10
4.2 SECONDARY DATA 11
4.2.1 JOURNAL 11
4.2.2 ANNUAL REPORT 11
4.2.3 WEBSITE 11
4.2.4 BOOKS 11
1.0 INTRODUCTION OF STUDY
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The Sarawak Timber Industry Development Corporation (STIDC) is a company which the
function would be to stimulate by all possible means the planned expansion of wood-based
industries throughout Sarawak at a role consistent with the overall interest of the economy, the
availability of capital and the technical expertise and effective management of the forest
resources. STIDC vision is to be The Leader and Catalyst of the Timber Industry and their
mission is to plan, coordinate and develop the wood-based industries in Sarawak towards
optimum and efficient utilization of timber resources by encouraging downstream processing
and product diversification. This case study is mainly on analyzing the sales performance of
STIDC for the year 2004 until 2008. The source of sales that determine the level of sales for
STIDC is basically from their timber premium which they collect every year, the registration fees
where all new set up factory must pay certain sum of payment in order to get licensed by
STIDC, the dividends receive from their 13 other subsidiaries especially from their top
subsidiaries which are Harwood Timber Sdn. Bhd, STIDC Belian Holdings Sdn Bhd, Hillog Sdn
Bhd and also dividends receive from other investment such as on equity fund, fixed assets,
ASSAR and also on their housing projects.
1.1 BACKGROUND OF STUDY
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As this study is on analyzing the sales performance, ratio analysis and also comparative index
analysis are used as the tools to show the differences over the years by using ratio such as
asset utilization ratio and also profitability ratio. The trends are analyzed and relevant comments
are given in order to identify the problems that affect the level of sales for STIDC. The chart
below shows the financial performance of STIDC for the last five (5) consecutive years, 2004
until 2008. The trends to be focused are on the level of Sales (Blue label).
YEAR
Year 2004 2005
Revenue 46,493,661 72,701,289
Year 2005 2006
Revenue 72,701,289 48,578,934
Year 2006 2007
Revenue 48,578,934 83,075,380
Year 2007 2008
Revenu
e
83,075,380 65,479,525
Based on the chart, the company sales in 2004 was RM46, 493,661 and the amount increased
by 36.05% in the year 2005. Meanwhile in the year 2006 the sales dropped to 49.66% before it
doubled their revenue where it increased by 41.52% in the year 2007. Again the sales dropped
by 26.87% making the revenue RM65, 479,525 in the year 2008. The downward and upward
trends of STIDC revenue are shown in the findings of the study.
This chart somehow clearly shows a sign of problems for this case study to be carried out as the
graphs shows the revenue (sales) for STIDC fluctuated over the years. Perhaps, by identifying
the problems and issues related might increase the amount and revenue (sales) that might
generate the company in terms of profitability in the future.
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46,493,661
72,701,289
48,578,934
83,075,380
65,479,525
0
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
2004 2005 2006 2007 2008
REVENUE(SALES)
YEAR
TRENDS OF STIDC SALES PERFORMANC
SALES OF STIDC
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2.0 PROBLEM IDENTIFICATION
The level of sales generated by STIDC in this 5 years analysis had shown an upward and
downward trend over the years. As this paper only focuses on the STIDC Corporation income
statement and balance sheet, the sources of revenue or income for STIDC are mainly from the
timber premium, interest income from fixed deposits, registration fees, management fees,
services and the dividends that they receive from their subsidiaries especially from Harwood
Timber Sdn. Bhd, STIDC Belian Holdings Sdn Bhd and Hillog Sdn Bhd. As timber resources are
limited, the amount received on timber premium were also decreasing as the number of timber
available continue to diminishing year by year and this might affect their level of revenue for
each year. Due to this matter, STIDC might face problems for them to sustain in the future and
this lead them to be involved in projects such as developing houses in order to generate
revenue for the company in order to increase their interest income on fixed deposits. However,
as STIDC make an investment on project such as building houses, the investment still does not
generate a lot to the level of sales for the company as they have to use their interest income on
fixed deposits to finance their projects while waiting for the government to give them grant for
the project that they involved in. The amounts of grant given by the government are usually not
paid in full amount of their investment value and due to this it will eventually affect their cash
flow and level of sales. Other source that affects the level of sales is on overestimated budget
on the registration fees that is on the renewal of license and fees for new set up factory who
involves in manufacturing timber products. For example, STIDC aim to achieve a target of
RM10 million on registration fees for the year 2005 in order to increase sales but in the end it
only turn up to be RM5 million. When the amount of fees collected for the year did not meet the
target it will directly reflect the sales amount for the year as registration fees is known to be one
of the sources that can affect the level of sales for the STIDC.
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2.1 OBJECTIVES, SCOPE AND STUDY QUESTION
Objectives
1) To determine the ability of the STIDC to control costs of inventories and to pass along
prices increases through sales.
2) To determine the overall operating efficiency of the STIDC.
3) To determine the level of profitability after consideration of all revenues and expenses of
STIDC.
4) To determine the efficiency with which STIDC uses all its assets to generate sales.
5) To determine the efficiency with which STIDC has been using its fixed assets to
generate sales.
Study Question
1) How capable does STIDC control both of its cost of inventories and to pass along prices
increases through sales?
2) What is the overall operating efficiency of STIDC?
3) What is STIDC level of profitability after taking consideration of all its revenues and
expenses?
4) How efficient does STIDC uses its assets to generate their sales?
5) How efficient is STIDC uses its fixed assets to generate sales?
Scope of Study
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The scope of this study is focusing on the sales performance of Sarawak Timber Industry
Development Corporation (STIDC) headquarters Kuching.
3.0 ELEMENTS CONTRIBUTING TO ISSUE
3.1 LITERATURE REVIEW
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3.2 Firms Financial Position
Financial ratio analysis can help investors in making investment decision and predicting firms
future performance. It can also give early warning about the slowdown of firms financial
condition (Ohlson, 1980).
3.3 Factors Affecting Sales
(Lee, 2010) noted that a poor economy, such as a recession, can cause a dramatic drop in
sales. It is possible that in a severe downturn that no amount of effort will offset the fact that
many customers simply do not have the money to buy. Organizations caught in this situation
may have no choice but to scale back operations or change pricing models and product lines
until the economy recovers. Poor sales forecasting might have been tied to a splashy marketing
campaign that failed, or consumers simply did not take to a new product offering the way
management expected. Or senior management, in a desperate attempt to increase revenues,
may have simply placed unrealistic expectations on the sales team when compared with past
performance. Poor individual performance can also affect sales. Sales people and sales
management must be held accountable for meeting aggressive yet reasonable goals. The
company should go to great lengths to motivate and retain producers, while placing others on
performance-improvement plans with regular reviews and mentoring. A poor sales pipeline can
also negatively impact sales performance. Sales organizations pressured to show immediate
sales often focus on the back end of the sales pipeline--where the deals are closed. However,
that can lead to too little prospecting for new customers. In July 2010, Microsoft cited a survey
of sales managers that said that only one in three of the managers felt that their sales teams
were making enough sales calls to meet revenue goals.
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The role of sales is to stimulate, rather than satisfy, demand for products (Weitz and Bradford,
1999, p. 243). Williams (1998) found that customer-oriented selling strategy leads to the
successful development of relationships with customers and positive impact on sales
performance. Some exploratory work (Beverland et al., 2006; Guenzi and Troilo, 2006; Le
Meunier-FitzHugh and Piercy, 2007b) supports the view that the smooth operation of the sales
and marketing interface is a critical success factor and also established the importance of the
relationship to performance. Homburg and Jensen (2007) suggest that sales staff should play
the role of customers advocate, while marketing promote the interests of products/brand, which
could result in market performance being enhanced as each side strives to improve its position.
3.4 Performance of Sales
During the last two decades, the performance measurement literature underscored some
relevant features and characteristics of performance measures and measurement systems,
which are, must reflect relevant non-financial information, based on key success factors of each
organization (Clarke, 1995); should be implemented as means of articulating strategy and
monitoring organization results (Grady, 1991); should be based on organizational objectives,
critical success factors and customer needs and monitoring both financial and non-financial
aspects (Manoochehri, 1999); must accordingly change dynamically with the strategy (Bhimani,
1993); must meet the needs of specific situations in relevant manufacturing operations, and
should be long-term oriented, as well as simple to understand and implement (Santori and
Anderson, 1987); must make a link to the reward systems (Tsang et al., 1999); financial and
non-financial measures must be aligned, and used within a strategic framework (McNair and
Mosconi, 1987; Drucker, 1990); should stimulate the continuous improvement processes
(Kaplan and Norton, 1992, 1993; Flapper et al., 1996; Neely et al., 1997; Medori and Steeple,
2000); must be easy to understand and to use (Kaplan and Norton, 1996; Ghalayini et al.,
1997); must be clearly defined and have a very explicit purpose (Flapper et al., 1996; Neely et
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4.1 PRIMARY DATA
4.1.1 Face-to-face Interview
The information of this report is gathered through the interviews with the staff who mainly
from the Account and Investment section in STIDC. Among them are Mr. Abang Luqman
Alhakim (Accountant), Mr. Abdul Hatta Sharkawi (Assistant Acountant) who in-charge in
formulate and forecast the annual expected revenue and expenses or known as budget for
STIDC, Mdm. Roslelawati M. Amin who manage the investment activities for STIDC, and
Mr. Juaini Hj Saee (Administrative assistant). Not to forget, the interviews also held with
other workers in the Account section that have been working in STIDC for more than 10
years period. All the information is gathered direct and indirect interview.
4.2 SECONDARY DATA
4.2.1 Journals
Sources of journals those are available in the online database as well as Google search
engine. Such journals have been used are from emerald insight database. E.g. Ghazaleh
Moghareh Abed, Mohammad Haghighi, (2009) "The effect of selling strategies on sales
performance", Business Strategy Series, Vol. 10 Iss: 5, pp.266 282.
4.2.2 Annual Reports
From the company annual reports, the changes and possible problems that might occur
from year to year can be detected. For this issue, the annual reports of STIDC for the year
2004 to year 2008 are used.
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4.2.3 Website
Other than the companys annual reports, the information and data on the company
background and relevant to the issue can be gathered fromwww.sarawak timber.org.my,
www.google.com, www.ehow.com and also pdfcast.org
4.2.4 Books
The other sources usually used are books on financial statement analysis. E.g. Wild, K.R.
(2009). Financial Statement Analysis, Asia: McGraw Hill Higher Education.
5.0 FINDINGS AND ANALYSIS
This chapter discusses on the data that have been collected from the organization mainly from
annual reports and through face to face interview with the workers in Account & Investment
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Year Year Changes (%) Changes
2004 2005 (RM)
Revenue 46,493,661 72,701,289 26,207,628 56.37%
Year Year Changes (%) Changes
2005 2006 (RM)
Revenue 72,701,289 48,578,934 (24,122,355) (33.18%)
Year Year Changes (%) Changes
2006 2007 (RM)
Revenue 48,578,934 83,075,350 34,496,416 71.01%
Year Year Changes (%) Changes2007 2008 (RM)
Revenue 83,075,350 65,479,525 (17,595,825) (21.18%)
Financial statements for STIDC level of revenue are available on Appendix 2.
As for the findings, comparative index analysis is used to show the differences of revenue that
STIDC had recorded for the 5 years period. The increase and decrease amount of revenue that
experienced by STIDC are due to several items that affect the level of revenue for each year.
(tell what affect the most to the level of revenue.mainly from timber premium and disposal of
investment)
As to show the revenue of STIDC for the year 2005,2005,2006,2007 and 2008, table 5.2 are
used to highlight the major item that contributed to STIDC source of revenue.
Table 5.2: Source of Revenue for the Year 2007 and 2008 (RM)
Revenue 2008 2007 2006 2005 2004
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Timber Premium 25,471,523 24,356,675 25,386,744 39,994,737 15,321,585
Interest Income 9,104,166 9,996,005 10,414,943 8,460,572 9,295,694
Registration Fees 962,577 703,414 664,065 615,639 704,778
Services 920,883 683,652 665,430 648,744 653,789
Management
Fees 866,726 972,734 1,118,623 1,427,803 1,218,748Dividen income -subsidiaries 378,000 2,808,000 2,942,375 2,233,000 1,472,760
Other investment 10,697,344 9,048,785 6,149,199 9,699,584 8,829,682
Other OperatingIncome 17,078,306 13,760,887 1,237,555 12,086,673 2,026,311
Gain On Disposalof OtherInvestment/ - 20,745,198 - - 932,394
Sales of TMPTZ
Lots - Overtakenup in prior years - - (2,465,463) 3,831,327
Admin Fees OnIncentive Claims 2,206,593
Total Revenue 65,479,525 83,075,350 48,578,934 72,701,289 46,493,661
Table 5.3: Source of Revenue for the Year 2004, 2005,2006,2007,2008. (%).
Revenue 2008 2007 2006 2005 2004
Timber Premium 38.90% 29.32% 52.26% 55.01% 32.95%
Interest Income 13.90% 12.03% 21.44% 11.64% 19.99%
Registration Fees 1.47% 0.85% 1.37% 0.85% 1.52%
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Services 1.41% 0.82% 1.37% 0.89% 1.41%ManagementFees 1.32% 1.17% 2.30% 1.96% 2.62%
Dividen income -subsidiaries 0.58% 3.38% 6.06% 3.07% 3.17%
Other investment 16.34% 10.89% 12.66% 13.34% 18.99%Other OperatingIncome 26.08% 16.56% 2.55% 16.63% 4.36%
Gain On Disposalof OtherInvestment - 24.97% - - 2.01%
Sales of TMPTZLots - Overtakenup in prior years - - (3.39%) 8.24%
Admin Fees OnIncentive Claims 4.75%
Total Revenue 100% 100% 100% 100% 100%
5.4 Timber Premium
The major contributor for STIDC source of revenue is the amount on collection of timber
premium. For the year 2004 STIDC had recorded 32.95% from the overall total revenue and for
the year 2005 STIDC managed to increase their timber premium received to 55.01% by making
it the largest source of revenue that contributed to STIDC within the 5 years period analysis.
However for the year 2006 and 2007, their timber premium received had dropped to 52.26%
and 29.32% in the year 2007. While for 2008, the timber premium received had slightly
increased to 38.90%.
The premiums are collected from the amount of timber trees that are being cut off by the
licensed and registered company who had register themselves under STIDC. Basically, the
prices of the trees are range from RM15 RM20 per tonne. The factors that affect the number
of premium collected are usually due to the economic factors. As for example, if the economic
condition is not good, any company or businesses who engage in the timber products are force
to close down their operation if their production costs are higher than the operating cost. Thus,
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due to maturity of fixed deposits by their depositor, grant that paid by the government and also
interest that they received from the sell of lots especially on their housing projects.
5.6 Registration Fees
As for the registration fees, 2004 had recorded 1.52% from the overall total revenue for the year
as compared to only 0.85% that they received in the year 2005. The registration fees did not
contributed must to the corporation. As for the year 2006, STIDC managed to received 1.37%
for their registration fees, 0.85 for the year 2007 and 1.47% for the year 2008. The revenue
received in the registration fees vary from year to year as its revenue may increase due to the
new number of registration of new companies, new factory, domestic trade, including export and
import activities from all of the business that registered and license themselves under STIDC.
Since stricter rules were imposed, more businesses that involves in timber product registered
themselves legally and the annual fee that they paid every year became the source of revenue
for STIDC every year. Any unregistered companies or factory that did not register themselves
under STIDC will be fine RM300, 000 and additional RM3,000 if they failed to register
themselves with STIDC in the following days.
5.7 Services
In the year 2004, STIDC managed to receive 1.41% of the overall total revenue compared to
only 0.89% in the year 2005. There was a slight increase in the year 2006 which was 1.37%
before it dropped again to only 0.82%. However, STIDC managed to increase their income on
services to 1.41% in the year 2008. The factor that contributed to the changes of revenue
earned every year are from the type of services that they organized such as Industrial training,
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Vendorship Programme which helps to increase and encourage the participant of Bumiputra in
wood based industries, Registration and Licensing which its function is to register and license
every person involved in establishment, manage or operate any mills, manufacturing, sale,
distribution or marketing of timber and timber products, Grading, Export License and also
Resource Development. The revenue from these services was mainly obtained from the fees
that they received from the participant who joined and of the programmed that STDIC had offer
under Section 5A of The Sarawak Timber Industry Development Corporation Ordinance, 1973.
5.8 Management Fees
STIDC also involve in managing any businesses that engage in timber products. Management
fees that are received by STIDC mainly from their management assistance such as providing
guidelines in order to meet the quality standard (MS ISO 9001-2000) in terms of their operating
activities and the standards of their final products. For the year 2004, STIDC had recorded
better revenue on management fees which was 2.62% compared to 1.96% in the year 2005.
For the year 2006, STIDC had contributed 2.30% of the revenue from their management fees
compared to 1.17% in the year 2007. The income from management fees continue to increase
by 1.32% for the year 2008. Part of the revenue of this management fees are then to be
contributed to Sarawak statutory bodies as STIDC are only given the responsibilities by the
Sarawak Government to act on behalf of the timber industry to manage, monitor coordinate and
develop the wood-based industries in Sarawak. The factors that affect the upward and
downward trend of management fees revenue are all depends on the number of business who
need the management assistance and also the number of the programs such as seminars that
are provide by STIDC every year.
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As to show the differences of 2007 and 2008, ration analysis are uses to show the differences
between the two years performance in terms of gross profit, net profit margin, operating profit
margin, total assets turnover and fixed asset turnover.
Table 5.9: Ratio Analysis for the Year 2004, 2005, 2006, 2007 and 2008.
Ratios 2004 2005 2006 2007 2008
Gross Profit Margin 97.26% 100% 100% 96.88% 98.69%Net Profit Margin (5.24%) 31.28% 10.68% 31.13% (9.52%)
Operating Profit Margin 8.97% 53.09% 22.45% 42.22% 18.20%
Total Asset Turnover 0.06X 0.09X 0.06X 0.09X 0.07X
Fixed Asset Turnover 1.28X 1.08X 0.74X 0.93X 0.81X
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Detail information on the calculation of ratio are available on Appendix 2.
STIDC had recorded 100% gross profit margin in the year 2005 and 2006 where for those year
STIDC did not incurred any cost of goods sold for those year. However in the 2004, STIDC had
recorded 97.26% of gross profit margin due to their cost of sales which cost RM1,275,787.
However in the year 2007, the gross profit margin recorded 96.88% since there was cost of
sales of RM2,594,733. This goes the same with the year 2007 and 2008 where the gross profit
margin for those 2 years was 96.88% and 98.69% respectively mainly from their cost of sales
on industrial land and lots sold for the year. On the overall performance, STIDC did show that
they have better control over its cost of inventories in order to increase their revenue from year
to year.
The Net profit margin for the corporation can be analyzed by measuring their overall operating
efficiency. The net profit or loss for the year was mainly affected by the corporation operating
expenditure, finance cost which includes interest expense and also after taking consideration of
taxation from corporation and subsidiaries. Every year, the increase and decrease in
percentage recorded by STIDC usually due to their high cost of operating expenditure. Since
STIDC had incurred net loss of RM2,434,644 in the year 2004, it directly affected their net profit
margin to be negative 5.24%. However, in the year 2005 STIDC had recorded the highest net
profit margin which was 31.28% compared to the year 2006 which only recorded 10.68%.
Due to those matter, STIDC has shown a decrease in their level of profitability which is (9.52%)
of compared to 31.13% in the year 2007. Due to high spending on the operating expenditure
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which was RM51,708,046 in the year 2008, this figure directly affected the profit for the year by
making the corporation to incur net loss of RM6,237,386 for the year 2008 if compared to the
year 1007 which was rm25,859,334.
The Operating profit margin of the corporation can be measure by analyzing the level of
profitability after consideration of all revenues and expenses. From the huge spending on the
operating expenditure, it is clearly that the figure had created an impact to the profits from
operation of the corporation. Due to the increase of its operating expenditure, the level of
profitability for STIDC in the year 2008 directly dropped to 16.67% compared to 38.03% in the
year 2007.
In term of total asset turnover, the corporation has shown a decrease in their total asset
turnover which was 0.9 times in the year 2008 and 0.7 in the year 2008. This indicate that
STIDC might have problem in their inventories such as holding obsolete inventory , too long
collection period that affects their account receivables and not fully utilize their assets in order to
generate revenue for STIDC may results in lower asset turnover.
However in term of fixed asset turnover, STIDC has been less efficient in using their fixed
assets to generate sales for the corporation which was only 0.81 times in 2008 compared to
0.93 times in the year 2007. This shows that the corporation has not fully utilized its fixed asset
in the year 2008. Their fixed assets are include land and buildings, transportation such as motor
vehicles and aircraft, plant and machine, leasehold of lands that includes short term and long
term leasing.
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6.0 RECOMMENDATION
The following recommendations are based on the sources of revenue that affect performance of
STIDC. It is suggested that STIDC should implement new strategies to have better
management on the forest in order to protect their timber resources from diminishing in the
future. It is suggested that STIDC should apply the enzyme technology especially in the pulp
and paper manufacture. This can be done by starting to plant on tree genetics or known as
biotechnology that will offers the possibility to resolve the increased demands on forest
resources through the development of trees in order to protect from diseases, pests, and
chemicals, which have a negative impact on forest health. In order to increase the number of
timber premiums every year, planting of trees such as Paulownia trees, Empress trees is
advisable since it takes shorter time to mature which is 6 years if compared to local timber trees
such as Meranti, Nibong, Belian which normally matures in 10 to 15 years. By having trees that
mature in shorter time period, this will directly increase the volume of timber resources and
eventually will result in smaller volume of trees to be cut in a year.
The use of advance technology such as GLOBAL POSITIONING SYSTEM (GPS) & geographic
information system (GIS)also plays important roles for the corporation to manage their timber
resources and at the same time to increase to efficiency and the effectiveness of their workers
especially those who involve in the timber inspection. This can be done by having handheld
device such as an Ipad which can help them to access the data and send the information
directly to headquarters for reports or checking. By doing this, it might help the employees to
accurately plot location data (latitude, longitude, and altitude) for use in calculating timber
volume, surveying timber plots and mapping roads and features in the forest. This data also
combined with other geographic data that might helps officers to accurately manage modern
forests by monitoring activities that are done in the field.
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Meanwhile in term of operating expenditure, every section in STIDC should control and monitor
their budget rather than only depending on the Account section to do so. This can be done by
having the same budget system that is use in the Account section.Furthermore,budget should
be allocate properly by giving priority to those sections who contribute the most to the operating
income such as the Industrial Planning, Project development, Registration & Licensing ,
Account & Investment, North Region and Middle region.
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6.1 CONCLUSION
This study is on analyzing the sales performance of Sarawak Timber Industry Development
Corporation. Primary data were collected by doing face to face interview with the employees
from the Finance and Investment Section. Secondary data such as annual report of STIDC and
information on their website are also used in other to gather the information especially on the
financial reports. This study is also highlighted on what are the items that affect the level of
revenue of STIDC for each year. Other than that, this study also investigate on the reasons and
factors that contributed to the changes of revenue in the timber premiums, interest income
received for each year, management fees, registration fees and also services that they offered
in order to increase the level of performance in term of sales or revenue for the corporation.
Financial ratios are used to measure the profitability of the corporation. This is in line with
(Ohlson, 1980) Financial ratio analysis can help investors in making investment decision and
predicting firms future performance. It can also give early warning about the slowdown of firms
financial condition .
The conclusion of this study can be drawn based on the findings of the study. As shown from
the findings, the timber premium is known as the major contributor for STIDC as it contribute the
most to the total overall revenue for STIDC every year. However, the collections on the timber
premiums are easily vary in amount every year since timber resources are limited from time to
time and also might get affected by other factors such as economy factors such as exchange
rates that can change the value of timber price per tonne. This also goes the same to the
interest income that the corporation received where it is also affected by the economic factor
such as interest rates offer by banks. Other than that, the services and fees are all depends on
the activities and programs that STIDC organized to all of the registered businesses that involve
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in timber industry such as companies, factories and other export and import activities that pay
their fees every year that help to generate STIDC source of revenue.
As for the conclusion, STIDC should take consideration to all of its sources or revenue and all
the factors that might affect their timber industry. The backup plans other than only depending
on their timber premium were also needed due to the concern of timber resources might
become limited in the future. Other than that, a good long term relation in investment with their
subsidiaries and continuation on development projects are also important in order to help
STIDC to maintain or increase their level of performance of sales in the future rather to only
depend on their timber premium that they received every year.
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