Jasmine Beauty Enterprise Cases

Accounting Assignment

1 a Financial Performance Comparasion JBE vs CNI

2010
Indicators
JBE CNI
Current Asset Ratio 1411% 4376%
Gross Profit Margin 59% 99%
Debt to Equity 73% 12%
Return on Asset 47% 2%
Return on Equity 84% 2%
Inventory Turn Over

b Value JBE for Promotional Activities

2009 2010
Advertising Expense 42.500 171.650
Sales 545.900 887.566
Gross Profit 260.855 523.884
Advertising Efficiency 0,16 0,33
Advertising to Sales 0,08 0,19
From my opinion the advertising that do by JBE is not effective and efficient because the advertising cannot
profit and sales.
But the advertising that do by JBE are usefull because the advertising generate the total amount of sales peri
JBE must do the attractive and effective advertising that will attract customer to buy JBE's product

2 a Analysis Horizontal
Jasmine Beauty Enterprise
Balance Sheet as at 31 December 2009 – 2011
2009 2010
RM RM
Fixed Assets 38.200,00 30.400,00
Current Assets
Deposits 3.500,00 3.500,00
Accounts receivable 5.573,00 15.480,00
Stock 15.200,00 24.500,00
Cash 13.969,45 27.061,12
38.242,45 70.541,12
Less: Current Liabilities
Accounts payable 0 0
Other current liabilities and accruals 20.000,00 5.000,00
Working capital 18.242,45 65.541,12
56.442,45 95.941,12
Equity
Initial investment 48.000,00 48.000,00
Retained earnings (beginning) 0 8.442,45
(+) Net profit for the year 8.442,45 47.498,67
0 -8.000,00
Retained earnings (ending) 8.442,45 47.941,12
56.442,45 95.941,12
Jasmine Beauty Enterprise
Profit and Loss Account for the year ended 31 December 2009 – 2011

2009 2010
RM RM
Sales 545.900,00 887.566,00
Less:
Cost of Goods Sold
Beginning Stock 0 15.200,00
Purchase 300.245,00 372.981,86
Ending Stock -15.200,00 -24.500,00
Cost of Goods Sold: 285.045,00 363.681,86
Gross Profit 260.855,00 523.884,14
Dividend 8,29 78,68
260.893,29 523.962,82
Less:
Operating Expenses
Salary and allowances 92.550,00 152.659,50
Advertising and promotion 42.500,00 171.650,00
Employee Provident Fund 34.980,00 27.606,50
Petrol, toll and parking 34.550,00 40.260,00
Rental 16.200,00 16.200,00
Depreciation 7.800,00 7.800,00
Telephone, fax and internet 6.561,00 9.517,15
Vehicle maintenance 3.650,00 2.900,00
Water and electricity 3.330,20 6.015,43
Accommodation 2.588,00 2.929,00
Stamp, post and courier 2.528,64 6.218,27
Premise and office maintenance 1.755,00 440
Stationary and printing 1.492,50 1.851,30
Medical expenses 925 0
Accounting fees 500 500
CSR contribution 320 200
Licensing 150 150
Bank charges 70,5 67
Operating Expenses: 252.450,84 476.464,15
Net profit 8.442,45 47.498,67
Analysis Vertikal
Jasmine Beauty Enterprise
Balance Sheet as at 31 December 2009 – 2011
2009
% Portion
RM
Fixed Assets 38.200,00 50%
Current Assets
Deposits 3.500,00 5%
Accounts receivable 5.573,00 7%
Stock 15.200,00 20%
Cash 13.969,45 18%
38.242,45
Less: Current Liabilities
Accounts payable 0 0%
Other current liabilities and accruals 20.000,00 26%
Working capital 18.242,45
56.442,45
Equity
Initial investment 48.000,00 63%
Retained earnings (beginning) 0 0%
(+) Net profit for the year 8.442,45 11%
0 0%
Retained earnings (ending) 8.442,45
56.442,45

Jasmine Beauty Enterprise

Profit and Loss Account for the year ended 31 December 2009 – 2011

2009
% Portion
RM
Sales 545.900,00 100%
Less:
Cost of Goods Sold
Beginning Stock 0
Purchase 300.245,00
Ending Stock -15.200,00
Cost of Goods Sold: 285.045,00 52%
Gross Profit 260.855,00 48%
Dividend 8,29 0%
260.893,29 48%
Less:
Operating Expenses
Salary and allowances 92.550,00 17%
Advertising and promotion 42.500,00 8%
Employee Provident Fund 34.980,00 6%
Petrol, toll and parking 34.550,00 6%
Rental 16.200,00 3%
Depreciation 7.800,00 1%
Telephone, fax and internet 6.561,00 1%
 Vehicle maintenance 3.650,00 1%
Water and electricity 3.330,20 1%
Accommodation 2.588,00 0%
Stamp, post and courier 2.528,64 0%
Premise and office maintenance 1.755,00 0%
Stationary and printing 1.492,50 0%
Medical expenses 925 0%
Accounting fees 500 0%
CSR contribution 320 0%
Licensing 150 0%
Bank charges 70,5 0%
Operating Expenses: 252.450,84 46%
Net profit 8.442,45 2%

b I think the Company shouldn't spend highly on marketing and promotional because the proportion of adve
the significane increase in sales. The promotion and marketing cost should be spen to retain the customer a
it. JBE must find the efficient budget of marketing to meet their target so the cost of advertising can generat
marketing to expand the business JBE must find the right strategy that make the customer want buy the pro
need and then JBE can develop it.

The stregth for the JBE is the continously JBE Sales higher from period to period, and JBE performance from
showtheir net profit always grow. JBE had a good Debt to Equty ratio that means the source of their fund do
is the low capital expenditure they had than the other company in the same business, CNI for example. The g
growth was volatile that make any worry to see the JBE can get the profit or not in the period. JBE must have
like reducing their cost like other company in the same line business. The more gross profit JBE can get it can

3 a I Think JBE will Success in the loan application because JBE have a good debt to equity ratio and liquid to. JB
make a contionous movement to increase their profit and manage to make their cost very efficient. I think th
performance from their financial statement and had a chance to become the big company in the beauty ind
see that JBE had a very good performance

b JBE must borrow so much money because to develop their business and JBE was a new born company so it f
they must think to improve the revenue, manage the cash flow, and efficiently manage their working capita
with the interest to. That imply that they must develop their company focus on their liquidity. The money t
customer retaintion, that imply to increase their revenue. They must have the efficient marketing strategy a
Beside of that they must have the competitive adventage to from their operation to produce and reduce the
 2011
JBE CNI
3956% 4150%
58% 99%
77% 12%
68% 3%
69% 4%
1 302

2011
202.946
1.129.538
659.622
0,31
0,18
ent because the advertising cannot had a big impact to generate Gross

erate the total amount of sales period to period

omer to buy JBE's product

2010 2011
% Change % Change
RM RM
-20% 30.400,00 29.400,00 -3%

0% 3.500,00 3.500,00 0%
178% 15.480,00 19.700,22 27%
61% 24.500,00 29.250,00 19%
94% 27.061,12 36.764,40 36%
84% 70.541,12 89.214,62 26%

- -
-75% 5.000,00 2.255,20 -55%
259% 65.541,12 86.959,42 33%
95.941,12 116.359,42

0% 48.000,00 48.000,00 0%
8.442,45 47.941,12
47.498,67 80.418,30
-8.000,00 -60.000,00
468% 47.941,12 68.359,42 43%
95.941,12 116.359,42
er 2009 – 2011

2010 2011
% Change % Change
RM RM
63% 887.566,00 1.129.537,60 27%

15.200,00 24.500,00 61%

24% 372.981,86 474.665,59 27%
61% -24.500,00 -29.250,00 19%
28% 363.681,86 469.915,59 29%
101% 523.884,14 659.622,01 26%
849% 78,68 100,13 27%
101% 523.962,82 659.722,14 26%

65% 152.659,50 189.323,11 24%

304% 171.650,00 202.945,87 18%
-21% 27.606,50 35.149,90 27%
17% 40.260,00 51.235,75 27%
0% 16.200,00 16.200,00 0%
0% 7.800,00 7.800,00 0%
45% 9.517,15 12.111,75 27%
-21% 2.900,00 3.690,30 27%
81% 6.015,43 7.255,39 21%
13% 2.929,00 3.727,50 27%
146% 6.218,27 7.913,52 27%
-75% 440 559,95 27%
24% 1.851,30 2.355,80 27%
-100% 0 0 0%
0% 500 1.000,00 100%
-38% 200 300 50%
0% 150 150 0%
-5% 67 85 27%
89% 476.464,15 579.303,84 22%
463% 47.498,67 80.418,30 69%
 2010 2011
% Portion % Portion
RM RM
30.400,00 30% 29.400,00 25%

3.500,00 3% 3.500,00 3%
15.480,00 15% 19.700,22 17%
24.500,00 24% 29.250,00 25%
27.061,12 27% 36.764,40 31%
70.541,12 89.214,62

0 0% 0 0%
5.000,00 5% 2.255,20 2%
65.541,12 86.959,42
95.941,12 116.359,42

48.000,00 48% 48.000,00 40%

8.442,45 8% 47.941,12 40%
47.498,67 47% 80.418,30 68%
-8.000,00 -8% -60.000,00 -51%
47.941,12 68.359,42
95.941,12 116.359,42

er 2009 – 2011

2010 2011
% Portion % Portion
RM RM
887.566,00 100% 1.129.537,60 100%

15.200,00 24.500,00
372.981,86 474.665,59
-24.500,00 -29.250,00
363.681,86 41% 469.915,59 42%
523.884,14 59% 659.622,01 58%
78,68 0% 100,13 0%
523.962,82 59% 659.722,14 58%

152.659,50 17% 189.323,11 17%

171.650,00 19% 202.945,87 18%
27.606,50 3% 35.149,90 3%
40.260,00 5% 51.235,75 5%
16.200,00 2% 16.200,00 1%
7.800,00 1% 7.800,00 1%
9.517,15 1% 12.111,75 1%
 2.900,00 0% 3.690,30 0%
6.015,43 1% 7.255,39 1%
2.929,00 0% 3.727,50 0%
6.218,27 1% 7.913,52 1%
440 0% 559,95 0%
1.851,30 0% 2.355,80 0%
0 0% 0 0%
500 0% 1.000,00 0%
200 0% 300 0%
150 0% 150 0%
67 0% 85 0%
476.464,15 54% 579.303,84 51%
47.498,67 5% 80.418,30 7%

nal because the proportion of advertising cost and the revenue they get doesn't make
ld be spen to retain the customer and get the long term value for the company from
the cost of advertising can generate the highly revenue for the company. Beside the
ake the customer want buy the product, maybe from the research based on customer

period, and JBE performance from period to period show forward movement that
at means the source of their fund doesn't dominant from debt. The weakness from JBE
ame business, CNI for example. The growth performance of JBE do not soft, their
or not in the period. JBE must have their best way to make their gross profit higher
e more gross profit JBE can get it can highly uo the profit.

ebt to equity ratio and liquid to. JBE performance period to period are very good the
ke their cost very efficient. I think the creditor will see JBE had a going concern
e the big company in the beauty industry. From the analysis in number 1 & 2 we can

JBE was a new born company so it fair if JBE need some loan. But From Loan they get
iently manage their working capital. They must firm to bring back the creditor fund
ocus on their liquidity. The money they spend can use to develop the marketing and
ve the efficient marketing strategy and research to compete and win the customer.
peration to produce and reduce the cost.