TABLE OF CONTENTS

1. Question A ..................................................................................................................................2
Financial ratios and discussion importance of finance ratios for corporation .............................2
2. Question B...................................................................................................................................3
2.1. Current ratio .........................................................................................................................3
2.2. Acid Test ratio ......................................................................................................................3
2.3. Price/Earnings per share ......................................................................................................4
2.4. Gearing ratio ........................................................................................................................4
2.5. Average collection period ....................................................................................................4
2.6. Average payment period ......................................................................................................5
2.7. Gross profit Margin ..............................................................................................................5
2.8. Net profit margin ..................................................................................................................5
2.9. Return on capital employed .................................................................................................6
2.10. Return on total assets ..........................................................................................................6

3. Question D ...............................................................................................................................7
3.1. Ratio of the company for 2011 and 2012 .......................................................................................... 7
3.2. Ratio analysis of PADINI HOLDINGS BERHAD ............................................................................ 7
3.3. FINANCIAL RESULTS............................................................................................................................ 9

4. Question E .............................................................................................................................10
5. Bibliography ............................................................................................................................10
6. Appendix 1 ................................................................................................................................11
6. Appendix 2 ................................................................................................................................12

Question A
Financial ratios and discuss the importance of financial ratios for a corporation
Financial ratios are advantageous pointers of the association's execution and monetary position,
Most of the degrees may calculted fromfinancial proclamations. Money related pointers could be
utilized to dissect patterns and think about the monetary execution of the firm to different firms .
Financial factors may be classified in accordance with the information that they provide. Often
uses the types of relations:

Liquidity
assets turnover
financial leverage ratio
Profitability
relationship Dividend Policy

Liquidity degrees give data about the association's capacity to satisfy its fleeting budgetary
commitments. They are exceptionally compelling to those growing fleeting advance to the firm.
Stakes turnover proportions demonstrate how adequately the association utilization its holdings .
They are frequently called execution pointers , the proportion of advantages or stake
administration relations .
Budgetary power proportions give an implication of the long haul dissolvability of the firm.
Dissimilar to liquidity proportions that are connected with transient holdings and liabilities ,
monetary influence proportion izmeritrasprostranyaetsya on which the firm uses debt.ratios offer
some distinctive measures of achievement of the organization to make a benefit.
Profit arrangement relations give a thought of the organization 's profit strategy and the prospects
for future development.

Question B
Calculation:
I.

Current ratio

2012
= 3.158539118

3.2

= 2.535423025

2.5

2011

II.

Acid- test ratio

2012
= 1.561394765

1.6

= 1.296142721

1.3

2011

III.

Price/Earnings ratio

2012
Earnings per share 2012 = 14.59 cent
2011
Earnings per share 2011 = 11.51 cent

IV.

Gearing ratio

Gearing ratio =
2012
Gearing ratio 2012 =

= 0.060243926

0.06

Gearing ratio 2011 =

= 0.077400845

0.08

2011

V.

Average collection period

(

Average collection period =

x 365 days

2012
Average collection period2012 =

x 365 = 24.1111277 24 days

Average collection period2011 =

x 365 = 25.31865022

2011

25 days

VI.

Average payment period

Average payment period =

x 365 days =

x 365 days

2012
Average payment period2012 =

x 365 = 0.210500478 x 365

= 76.8326748

77 days

2011
Average payment period2011 =

x 365 = 0.338312829 x 365

= 123.4841828
VII.

123 days

Gross profit margin

Gross profit Margin =

x 100%

2012
Gross profit Margin 2012 =

x 100 = 48.1869919

Gross profit Margin 2011 =

x 100 = 51.15501798

48%

2011

VIII.

51%

Net profit margin

Net profit margin =

x 100%

2012
Net profit margin 2012 =

x 100 =13.27060274

13%

Net profit margin 2011 =

x 100 = 13.3152499

13%

2011

IX.

Return on capital employed

Return on capital employed=

x 100%

2012
Return on capital employed2012 =

x 100 % = 145.9181347

146 %

Return on capital employed2011 =

x 100 % = 115.0522108

115 %

2011

X.

Return on total assets

Return on total assets =

x 100%

Return on total assets 2012 =

x 100%= 19.9046246

20 %

Return on total assets 2011 =

x 100%= 17.0351916

17 %

2012

2011

Question D
I.

Ratio of the company for 2011 and 2012

Ratios

2012

2011

I.

Current ratio

3.2

2.5

II.

Acid Test ratio

III.

Earnings per share

1.6
14.59 cent

1.3
11.51 cent

IV.

Gearing ratio

V.

Average collection period

0.06
24 days

0.08
25 days

VI.

Average payment period

VII.

Gross profit Margin

77 days
48%

123 days
51%
13%
115 %
17%

VIII. Net profit margin

IX.

Return on capital employed

13%
146 %

X.

Return on total assets

20 %

II.

Ratio analysis of PADINI HOLDINGS BERHAD

PADINI HOLDINGS BERHAD the financial statement for the year 2011 and 2012 has

been used to calculated financial ratios of the company in order to analyze the situation of the
company to reflect 2012 performance in contrast to 2011 and judging based on figures and
numbers in order to determine if the organization has improved financially.
The liquidity ratios show of the company ability to pay debts and the liquid available to
run the organization. The current ratio for the year 2011 is 2.5 while increased 3.2 which showed
the current ratio has more assets tied down unproductive activities like large amounts of stock
has been brought down. The quick test ratio better reflects on this as the acid test ratio show 1.3
for 2011and 1.6 for 2012. It shows liquid assets have decreased. The profitability ratios of
PADINI HOLDINGS BERHAD is analysed in order to view the profitability of the organization.
The Gross profit margin for the year 2011 was 51% and it decreased 48% meaning the
gross profit margin in goods has decreased due to cutting down the cost of sales; BUT which will
have NOT an effect on the net profit ratio. The net profit margin for the BOTH year is same

percentage (13%). The return on capital employed for the year 2011 was 115 % and it
significantly increased for the year 2012 146 % And return on total assets has also grew up from
17 % to 20 % from 2011 to 2012.

Ratios
160
140

Amount

120
100
80
60
40
20
0
Earnings
Current Acid Test
per
ratio
ratio
share

Average Average Gross

Gearing
collectio payment profit
ratio
n period period Margin

Net
profit
margin

Return
Return
on
capital on total
employe assets
d

2011

3.2

1.6

14.59

0.06

24

77

48

13

146

20

2012

2.5

1.3

11.51

0.08

25

123

51

13

115

17

Efficiency ratio will identify PADINI HOLDINGS BERHAD the debtors and creditors;
collection and payment time. The average collection period form debtors has increased making
recovery of debts as of 2012 more longer and time consuming the average collection period was
(25) days while in 2011 the debts were received within reduced to (24) days which is not an good
improvement. The average payment period decreased considerably as from taking 123 days to
pays debts in 2011 to creditors but now it takes 77 days to pay them as it has the extend the days
to payback some suppliers may not like the period taken to repay but the creditors have more
than doubled since the year 2011.

III.

FINANCIAL RESULTS

For the financial year under review , the Group achieved a consolidated turnover of RM568.5
million , an increase of 9.6% compared with the last year the number of RM518.8 million
(restated) . Gross profit grew in tandem by 12.2 % during the same period , while profit before
tax increased by 21.8 % from RM86.3 million recorded in the previous year to RM105.1 million
in the current fiscal year. Total comprehensive income for the financial year attributable to
equity shareholders of the Company as compared with the amount of RM59.9 million achieved
much over the previous fiscal year increased by 24.7 % to RM74.7 million. (Zain, 2014)

Question E
The conclusions is, for the company PADINI HOLDINGS BERHAD performance are
more better and increases year by year as we can see the ratio in 2012 given a better result than
2011. It shown that a company's ability to meet short-term debt obligations, company's ability to
meet its short-term obligations using its most liquid assets, company's ability to repay its
obligations, how effectively and efficiently a company is using its fixed assets to generate
revenues, how efficiently a company uses its resources, materials, and labor, company's ability to
generate profits before leverage, and more efficient at using its capital to generate income.

Bibliography
Zain, F. (2014). Padini holding berhad. Retrieved FEBRUARY 24, 2014, from www.academia.edu:
http://www.academia.edu/5518986/PADINI_HOLDINGS_BERHAD_3-latest

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Appendix 1

11

Appendix 2

12