PERFORMANCE STUDY USING RATIO AND COMPARATIVE ANALYSIS…
Transcript of PERFORMANCE STUDY USING RATIO AND COMPARATIVE ANALYSIS…
PERFORMANCE STUDY USING RATIO AND COMPARATIVE
ANALYSIS: A CASE STUDY OF KOPERASI
KAKITANGAN & KELUARGA AIR
KELANTAN BERHAD
MOHD MUSDA BIN YAACOB
2006117683
BACHELOR BUSINESS ADMINISTRATION (HONS) IN FINANCE
FACULTY OF BUSINESS MANAGEMENT
UNIVERSITI TEKNOLOGI MARA
KELANTAN
NOVEMBER 2008
ABSTRACT
This case study attempts to study the performance of the company (Koperasi
Kakitangan & Keluarga Air Kelantan Berhad) to determine whether the company follows
or not the trend analysis in term of their liquidity, operating, leverage and profitability in
order to evaluate their performance in making business decision. Data from a company's
financial statements reveal the company's financial condition. Examining financial ratios
and comparative financial statement analysis provides management, members, and
creditors a glimpse of the company's strengths and weaknesses. The methods used are
ratio analysis and comparative analysis, the result shows that there are good and poor
performance in term of liquidity, capital structure and solvency, return on investment,
operating performance and asset utilization. The result also shows the year to year
changes in the company accounts. The final result shows that apart of analysis meet
with the financial measurement performance and industry norms while the rest need
improvement in order to meet with the financial measurement performance and industry
norms.
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TABLE OF CONTENTS
PAGE
DECLARATION OF ORIGINAL WORK ii
LETTER OF TRANSMITTAL Hi
ACKNOWLEDGEMENT iv
ABSTRACT vi
TABLE OF CONTENTS vii
LIST OF TABLES x
LIST OF FIGURES xii
CHAPTER 1: INTRODUCTION
1.1 Background of Company 1
1.2 Issue 4
1.3 Objectives of the Study 5
1.4 Scopes of the Study 5
1.5 Limitation of the Study 5
1.6 Significance of study 6
CHAPTER 2: LITERATURE REVIEW
2.1 Meaning of Cooperative 7
2.2 Cooperative Identity 8
2.3 History and Movements of Cooperative 9
2.4 Cooperatives Today 12
2.5 Utility Cooperative 13
2.6 Cooperative Performance and Financial Analysis 14
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CHAPTER 3: RESEARCH METHODOLOGY
3.1 Sample Collection 20
3.1.1 Data Collection 20
3.2 Methodology 20
3.2.1 Ratio Analysis 20
3.2.1.1 Liquidity Ratio 21
3.2.1.2 Capital Structure and Solvency 23
3.2.1.3 Return on Investment 24
3.2.1.4 Operating Performance 25
3.2.1.5 Asset Utilization 26
3.2 .2 Comparative Financial Statement Analysis 28
3.2.2.1 Year to Year Change Analysis 29
CHAPTER 4: FINDINGS AND ANALYSIS
4.1 Ratio Analysis 30
4.1.1 Liquidity Ratio 30
4.1.1.1 Current Ratio 30
4.1.1.2 Acid Test Ratio 32
4.1.1.3 Collection Period 33
4.1.1.4 Days to Sell Inventory 35
4.1.2 Capital Structure and Solvency 36
4.1.2.1 Total Debt to Equity 36
4.1.3 Return on Investment 37
4.1.3.1 Return on Assets 38
4.1.4 Asset Utilization 39
4.1.4.1 Cash Turnover 39
4.1.4.2 Total Assets Turnover 41
4.1.4.3 Total Inventory Turnover 42
4.1.5 Operating Performance 43
4.1.5.1 Gross Profit Margin 44
4.1.5.2 Net Profit Margin 46
4.1.6 Ratio Analysis and Industry Norms 48
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4.2 Comparative Financial Statement Analysis 50
4.2.1 Income Statement 50
4.2.1.1 Revenue 51
4.2.1.2 Cost of Sales 52
4.2.1.3 Gross Profit 53
4.2.1.4 Other Income 54
4.2.1.5 Administration Expenses 56
4.2.1.6 Other Expenses 57
4.2.1.7 Profit for the Year 58
4.2.2 Balance Sheet 60
4.2.2.1 Total Assets 61
4.2.2.2 Total Liabilities 62
4.2.2.3 Total Equity 63
CHAPTER 5: CONCLUSION AND RECOMMENDATIONS
5.1 Conclusions 65
5.2 Recommendations 67
BIBLIOGRAPHY 69
APPENDICES
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