AFT 2073

FINANCIAL MANAGEMENT

FEBRUARY
(SESSION 2020/2021)

GROUP ASSIGNMENT

“UNITED PLANTATION BERHAD VS JAYA TIASA

PLANTATION HOLDINGS BERHAD”

LECTURE’S NAME : MADAM TAHIRAH BINTI ABDULLAH

LECTURE’S CLASS (L) : L2

Group Member’s No Matrix
LIANA ANAK TIJA A18A0226
TAN YEIN YEIN A18A0913
ANUWAR RIDZWAN BIN AZIZ A18A0068
SHALINI A/P KRISHNAN A18A1141
AINI HAYATI BINTI AZIZAN A18A0036
TABLE OF CONTENT
1.0 Introduction 1
2.0 Business Nature 1-2
3.0 Horizontal Analysis 3-14
A. United Plantation Berhad
B. Jaya Tiasa Holdings Berhad
4.0 Vertical Analysis 15-24
5.0 Conclusion 25
6.0 Appendix 26-32
1.0 INTRODUCTION
Financial management is a managerial activity concerned with planning and
controlling of the firm’s financial resources to generate returns on its invested funds.
However, financial analysis is used to evaluate business, budgets, and long-term plans for
business activity and determined a company’s performance. A financial analysis examine
through a company’s financial statement which is income statement, balance sheets and cash
flow statement.
Our group decide to choose a plantation company which is United Plantation Berhad
and Jaya Tiasa Holdings Berhad. The both of the company is in the same business of oil palm
and coconut. We collected the data from main market of the public listed companies (second
board) in Bursa Malaysia website. The annual report for financial year for both company’s
data is ended December 2017, 2018 and 2019. The method to analyse financial data is using
14 financial ratios to calculate all the ratios from the data in the financial statements and
perform 3 years trend analysis by using horizontal and vertical analysis.
The horizontal analysis is used to review a company’s financial statement and
compare the ratios year by year to determine a company either is growing or declining,
identify the company’s problem and give suggestions to make their companies improve.
Whereas, the vertical analysis is showing the relative proportions of account balance with
compare the ratios for both companies from year to year.
By doing this assignment, we enable to learn about how to measure the profitability,
do analyse, financial strength, know the efficiency of management and the trend of business
of a company or our business. It also helps us understand more about this topic in subject
financial.

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2.0 BUSINESS NATURE
(A) United Plantation Berhad
United Plantation Berhad is engaged in the cultivation of oil palm and other plantation
crops, including processing of their products. The Company operates in three segments,
plantations, palm oil refining and other segments. The plantations segment carries on the
business of oil palm and coconut cultivation and processing on its plantations in Peninsular
Malaysia and Kalimantan, Indonesia. Under this segment, there is also a Research Centre
providing improved planting material for its estates, as well as for the Malaysian agricultural
sector in general. The palm oil refining segment in the business of palm oil processing,
manufacturing of edible oils, fats, cocoa butter substitute and trading in crude palm oil and
palm oil products. The other segments consists of bulking facilities, which carry on the
business of handling and storage of vegetable oils and molasses and holding companies for
subsidiaries in Indonesia, which are involved in marketing and trading of its products.
Its subsidiaries process and manufacture palm oil until it is ready to be packaged and
distributed to customers worldwide. It owns light railway to transport products from palm
trees to a handful of mills located on its property. Coconuts can be sold at a young age for
drinking purposes, or as mature nuts to help produce milk, powders, and other products. End
products produced by the company include cooking oils, ready-to-eat oils, soaps, and
specialty fats. The remaining waste water and discharge from mill operations are used to
produce fertilizers or shipped to ponds where it can be purified and released to rivers and
waterways.
(B) Jaya Tiasa Holdings Berhad
Jaya Tiasa Holdings was founded in 1960 and based in Kuala Lumpur, Malaysia. Jaya
Tiasa Holdings Berhad is one of the fastest growing oil palm players in Malaysia with a land
bank of over 83 thousand hectares in the state of Sarawak. The Group’s oil palm
division continues to monitor procedures and systems to ensure that good agronomic
practices are prevalent throughout the organisation. Among the various practices adopted by
the Group’s estates are zero burning land development techniques and Good Agricultural
Practices in water management, manuring and weeding. As an exercise in managing pest
control, our biological and integrated pest management practice which involves the planting
of beneficial plants and light traps, has vastly reduced dependency on the usage of chemical
pesticides.
Jaya Tiasa Holdings Berhad is an investment holding company engaged in the
provision of management services, extraction and sale of logs. The Company, through its
subsidiaries, is engaged in the development of oil palm plantations and related activities. The
Company's segments are Logs Trading, Manufacturing, Oil Palm and Others. The Logs
Trading segment is engaged in extraction and sales of logs and development of planted
forests. The manufacturing segment is engaged in manufacturing and trading of sawn timber,
plywood, veneer, blockboard and laminated wood. The oil palm segment is engaged in the
development of oil palm plantations and its related activities. The others segment is engaged
in the provision of air transportation services and investment holding. It manufactures a range
of products, including round logs, sawn timber and film overlay plywood. The Company
exports its processed wood products to various markets, including Asia Pacific, Middle East,
Europe and Latin America.

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 Financial Ratio

3.0 Horizontal Analyses

i) UNITED PLANTATION BERHAD

Financial ratio Formula Year

2017 2018 2019
1. Current current assets RM 619596 RM 607 299 RM 333391
Ratio current liability RM 94 385 RM 90 807 RM 66 054
= 6.56 = 9.99 = 5.05

The current ratio for UNITED PLANTATION BERHAD is increase from 6.56 in year 2017 to 9.99 in year 2018 but decrease to 5.05 in
year 2019.In year 2017 to year 2018 the current ratio of UNITED PLANTATION BERHAD increase because the owner’s of company invest
additional cash in the company and it shows has ability to cover its current liabilities to their creditors. In year 2018 to year 2019 current ratio
decrease because the owner’s of company invest less cash in the company. Although its decrease but still this company reflected the ability to
pay its short term obligation on time because the ratio is greater than 1.

Financial Formula Year

ratio 2017 2018 2019
2. Quick current assets−inventory RM 619596−33 232 RM 607 299−40 956 RM 333391−29 153
Ratio current liability RM 94 385 RM 94 385 RM 66 054
= 6.21 =6.00 = 4.61

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 The quick ratio for UNITED PLANTATION BERHAD is decrease continues from 6.21 in year 2017 to 6.00 in year 2018 and to 4.61 in
year 2019. The ratio shows decrease from year 2017 to year 2019 because UNITED PLANTATION BERHAD did not improve its liquidity. Its
shows the company do not able of converting receivables into cash quickly and do not able to pay off all of the current liabilities.

Financial Formula Year

ratio 2017 2018 2019
3. Net Current asset – current RM 619 596 – RM 94 385 RM 607 299 – RM 94 385 RM 333 391 – RM66 054
Working liability = RM 525 211 = RM 512 914 = RM 267 337
Capital

In these three years , UNITED PLANTATION BERHAD shows a positive net working capital. It shows that the net working capital was
decreased from RM 525 211 in year 2017 to RM 512 914 in year 2018 and its continue decreased to RM 267 337 in year 2019. The net working
capital continuous decrease because this company may be decrease sales revenues. But the amount of current assets was excess the amount of
current liabilities. It shows that UNITHED PLANTATION BERHAD is having enough of net working capital to ensure that their company can
fully cover its current liabilities and has great potential for growth of company performance.

Financial ratio Formula Year

2017 2018 2019
4. Inventory COGS∨Sales RM 591914 RM 575318 RM 563335
Turnover Inventories RM 33 232 RM 40 956 RM 29153
= 17.81 times = 14.05 times = 19.32 times

The inventory turnover was decreased from 17.81 times in year 2017 to 14.05 times in year 2018 but its increased to 19.32 times in year
2019. The drop of inventory turnover from 2017 to 2018 because of the ineffectiveness of in generate sales but its increased from year 2018 to
2019 its because that the company was increase effectiveness in manage the inventory.

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Financial ratio Formula Year
2017 2018 2019
5. Fixed Asset Sales RM 591 914 RM 575318 RM 563335
turnover ¿ Asset RM 1612 347 RM 1619 423 RM 1804 573
= 0.37 =0.36 = 0.31

The fixed asset turnover was decreased continues from 0.37 in year 2017 to 0.36 in year 2018 and again decreased to 0.31 in year 2019.
The decrease of fixed asset turnover in UNITED PLANTATION BERHAD in year 2017 to 2019 is because low efficiency in sales. Company
should decrease the investment of fixed asset or increase the sales order to increase fixed asset turnover.

Financial ratio Formula Year

2017 2018 2019
6. Total Asset Sales RM 591 914 RM 575 318 RM 563 335
turnover Total Asset RM 2231 943 RM 2226 722 RM 2137 964
= 0.27 = 0.26 = 0.26

The total asset turnover was drop 0.27 in year 2017 to 0.26 in year 2018 and remain the same 0.26 in year 2019. Total asset turnover
decrease from year 2017 to 2018 because company did not used asset wisely to generate sales and from year 2018 to 2019 its remain same
because this company again did not used asset wisely it might be problem on management. UNITED PLANTATION BERHAD should analysis
the risk of using asset to generate sales in order to avoid loss in company.

Financial ratio Formula Year

2017 2018 2019
7. Debt Ratio Total Debt RM 223 008 RM 235 675 RM 230 152
Total Asset RM 2231 943 RM 2226 722 RM 2137 964
= 0.0999 =0.1058 = 0.1077
= 9.99% =10.58% = 10.77%

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 The debt ratio of UNITED PLANTATION BERHAD continue increased from 9.99% in year 2017 to 10.58% in year 2018 and to
10.77% in year 2019. The debt ratio continuous increase because company increase the amount pay monthly toward debt. This showing that
UNITED PLANTATION BERHAD have higher amount of debt to finance asset.

Financial ratio Formula Year

2017 2018 2019
8. Debt to Total Debt RM 223 008 RM 235675 RM 230 152
Equity Equity RM 2008 935 RM 1991 047 RM 1907 812
= 0.1110 =0.1183 = 0.1206
= 11.10% =11.83% = 12.06%

The debt to equity in year 2017 until 2019 is always increased. In year 2017 it shows 11.10% , in year 2018 shows 11.83% and in year
2019 is 12.06%. The debt to equity increase continuous because the earnings of company has increase. This shows a good sign to UNITED
PLANTATION BERHAD because the higher ratio effect the higher amount of debt. This company have manage their cost and increase the sales
to pay off the existing debt.

Financial ratio Formula Year

2017 2018 2019
9. Time RM 337 861 RM 331238 RM 247 620
Interest earned EBIT RM 72106 RM 83668 RM 62286
Interest = 4.69 times = 3.96 times = 3.98 times

The time interest earned in year 2017 is 4.69 times and decreased to 3.96 times in year 2018 and increased to 3.98 times in year 2019.
The decreased time interest earned from year 2017 to 2018 because this company fail to pay interest payments and shows that UNITED
PLANTATION BERHAD will face some problem in their company because they get decreased in time interest earned. But the increase in year
2019 because that the company meet loan requirement and lower risk of default.

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Financial ratio Formula Year
2017 2018 2019
10. Gross Gross Profit RM 601 231 RM 580 628 RM 573 904
Profit Margin Sales RM 591914 RM 575318 RM 563 335
= 1.02% = 1.01% = 1.02%

The gross profit margin in year 2017 is 1.02% and its decreased to 1.01% in year 2018 and increased to 1.02%. Decrease in gross profit
margin in year 2018 shows bad sign to UNITED PLANTATION because they cannot manage the cost sale properly. Then the value increased in
year 2019 because of higher contribution margin.

Financial ratio Formula Year

2017 2018 2019
11. Operating EBIT RM 337 861 RM 331238 RM 247 620
Profit Margin Sales RM 591914 RM 575318 RM 563 335
= 0.5708 = 0.5757 =0.4396
= 57.08% = 57.57% = 43.96%

The operating profit margin in year 2017 is 57.08% and rise to 57.57% in year 2018 then the value decreased to 43.96% in year 2019.
The increase of operating profit margin in year 2018 because sales of company increase and shows better productivity to UNITED
PLANTATION BERHAD. The decreased in year 2019 because sales of UNITED PLANTATION BERHAD decline and shows that company
productivity is not too stable in the market.

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Financial ratio Formula Year
2017 2018 2019
12. Net Profit Earning After Tax RM 285 783 RM 273 572 RM 217 587
Margin Sales RM 591914 RM 575318 RM 563 335
= 0.4828 = 0.4755 = 0.3862
= 48.28% =47.55% = 38.62%

The net profit margin for UNITED PLANTATION BERHAD continuous decreased. In year 2017 shows 48.28% and in year 2018 shows
47.55% and in year 2019 shows 38.62%. Net profit margin of United Plantation continuous decrease because the cost of goods sold become
higher. It shows that UNITED PLANTATION BERHAD cannot share the income to shareholders because they got loss.

Financial ratio Formula Year

2017 2018 2019
13. Return on Earning After Tax RM 285783 RM 273572 RM 217 587
Asset Total Asset RM 2231 943 RM 2226 722 RM 2137 964
= 0.1280 = 0.1229 = 0.1018
= 12.80% = 12.29% = 10.18%

The return on asset for UNITED PLANTATION BERHAD is continuous decrease from 12.80% in year 2017 to 12.29% in year 2018 its
again drop to 10.18% in year 2019. The return on asset decrease because the company does not manage their operation properly so they cannot
make enough profit to use in assets. In order to solve this problem , UNITED PLANTATION BERHAD needs to improve their operation
management to gain more profit.

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Financial ratio Formula Year
2017 2018 2019
14. Return On Earning After Tax RM 285783 RM 273 572 RM 217587
Equity Total Equity RM 2008 935 RM 1991 047 RM 1907 812
= 0.1423 = 0.1374 = 0.1141
= 14.23% = 13.74% = 11.41%

The return on equity in year 2017 is 14.23% and its decreased to 13.74% in year 2018 and its again drop to 11.41% in year 2019. The
return on equity continuous drop because UNITED PLANTATION BERHAD fails to manage the shareholders investment to generate income.

ii) JAYA TIASA HOLDINGS BERHAD

Financial ratio Formula Year

2017 2018 2019
1. Current current assets RM 447,411 RM 503,554 RM 370,001
Ratio current liability RM 271,548 RM 234,447 RM 134,120
= 1.65 = 2.15 = 2.76

The current ratio for JAYA TIASA HOLDING BERHAD has been rise steadily from 1.65 in year 2017 to 2.15 in year 2018 and then
continues goes up to 2.76 in year 2019. JAYA TIASA HOLDING BERHAD has ability to cover its current liabilities to their creditors. The
increase ratio of company is greater than 1 reflected the ability to pay its short term obligation on time.

Financial Formula Year

ratio 2017 2018 2019
2. Quick current assets−inventory RM 447,411−RM 11,484 RM 503,554−RM 7469 RM 370,001−RM 22,313
Ratio current liability RM 271,548 RM 234,447 RM 134,120
= 1.61 = 2.12 = 2.59

The quick ratio of JAYA TIASA HOLDING BERHAD was increase continues from 1.61 in year 2017 to 2.12 in year 2018 and 2.59 in
year 2019. . The ratio shows increase from year 2017 to year 2019 due to the DRB-HICOM BERHAD has improved its liquidity. Its shows the
company has the ability of converting receivables into cash quickly and able to pay off all of the current liabilities.

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Financial Formula Year
ratio 2017 2018 2019
3. Net Current asset – current RM447,411-RM271,548 RM 503,554−RM 234,447 RM370,001-RM134,120
Working liability = RM 175,863 = RM269,107 = RM235,881
Capital

In these three years, JAYA TIASA HOLDING BERHAD shows a positive net working capital. In shows that the net working capital was
increased from RM 175,863 in year 2017 to RM269,107 in year 2018 but it has declined to RM235,881 in year 2019. The amount of current
assets was excess the amount of current liabilities. It shows that JAYA TIASA HOLDING BERHAD is having enough of net working capital to
ensure that their company can fully cover its current liabilities and has great potential for growth of company performance

Financial ratio Formula Year

2017 2018 2019
4. Inventory COGS∨Sales RM 195,925 RM 133,543 RM 84,914
Turnover Inventories RM 11,484 RM 7469 RM 22,313
= 17.06 times = 17.88 times = 3.81 times

The inventory turnover was increased from 17.06 times in year 2017 to 17.88 times in year 2018. In year 2019, the inventory has drop to
3.81 times. The increase of inventory turnover in year 2017 to year 2018 reflect that the company was increase effectiveness in manage the
inventory. However, the ability of company in selling the inventory has drop in year 2018 to year 2019, it reflect the ineffectiveness of inventory
in generate sales.

Financial ratio Formula Year

2017 2018 2019
5. Fixed Asset Sales RM 247,356 RM 134,027 RM 80,956
Turnover ¿ Asset RM 1,890,139 RM 1,863,708 RM 1,663,017
= 0.1309 = 0.0719 = 0.0487

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 The fixed asset turnover of was decreased continues from 0.1309 in year 2017 to 0.0719 in year 2018 and drop to 0.0487 in year 2019.
The decrease of total asset turnover shows that JAYA TIASA HOLDING BERHAD in year 2017 to year 2019 is low efficiency in sales.
Company should decrease the investment of fixed asset or increase the sales in order to increase the fixed asset turnover.

Financial ratio Formula Year

2017 2018 2019
6. Total Asset Sales RM 247,356 RM 134,027 RM 80,956
turnover Total Asset RM 2,337,550 RM 2,367,262 RM 2,033,018
= 0.1058 = 0.0566 = 0.0398

The total asset turnover was continues drop 0.1058 in year 2017, 0.0566 in year 2018 and 0.0398 in year 2019. It shows company didn’t
used the asset wisely to generate sales and it might problem on management. JAYA TIASA HOLDING BERHAD should analysis the risk of
using asset to generate sales in order to avoid loss in company.

Financial ratio Formula Year

2017 2018 2019
7. Debt Ratio Total Debt RM 426,027 RM 292,085 RM 327,274
Total Asset RM 2,337,550 RM 2,367,262 RM 2,033,018
= 0.1823 = 0.1234 = 0.1610
= 18.23% = 12.34% = 16.10%

The debt ratio in year 2017 is 18.23% decrease to 12.34% in year 2018 and increase to 16.10% in year 2019. The decrease of debt ratio in
year 2017 to year 2018 shows that DRB-HICOM BERHAD has taken less risk in their business activities to avoid the increase of debt in
company. However in year 2018 to year 2019 increase of debt ratio reflect the higher amount of debt to finance asset.

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Financial ratio Formula Year
2017 2018 2019
8. Debt to Total Debt RM 154,479 RM 269,107 RM 235,881
Equity Equity RM 1,911,523 RM 1,975,177 RM 1,705,744
= 0.0808 = 0.1362 = 0.1383
= 8.08% = 13.62% = 13.83%

The debt to equity in year 2017 until 2019 is always increased. In year 2017 the debt to equity is 8.08%, in year 2018 is 13.62% and in
year 2019 is 13.83%. This shows a good sign to JAYA TIASA HOLDING BERHAD because the higher ratio effect the higher amount of debt.
This company have manage their cost and increase the sales to pay off the existing debt.

Financial ratio Formula Year

2017 2018 2019
9. Time EBIT RM 14,773 RM 64,391 (RM 217,885)
Interest Earned Interest RM 4471 RM 4103 RM 234
= 3.30 times = 15.69times = -931.13 times

The time interest earned in year 2017 is 3.30 times and increased to 15.69 times in year 2018 but decreased to -931.13 times in year
2019. The higher ratio in year 2018 indicates that firm can meet loan requirement and lower risk of default. It means that if the answer is more
than 1, the company are able to pay interest using it operating and income earning. It means in the year 2019, JAYA TIASA HOLDING
BERHAD have face a big problem in their company because they get a negative amount in times interest earned.

Financial ratio Formula Year

2017 2018 2019
10. Gross Gross Profit RM 51,431 RM 484 ( RM 3958)
Profit Margin Sales RM 247,356 RM 134,027 RM 80,956
= 0.2079 = 0.0036 = -0.0489
= 20.79% = 0.36% = -4.89%

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 The gross profit margin in year 2017 until 2019 was slightly decrease. In year 2017 the amount was 20.79% and decrease to 0.36% in
year 2018. Sadly, in year 2019, JAYA TIASA HOLDING BERHAD get a negative amount that is equal to -4.89%. The higher ratio indicates
higher contribution margin. Decrease in gross profit margin is a bad sign to JAYA TIASA HOLDING BERHAD because they cannot manage
the cost of sale properly.

Financial ratio Formula Year

2017 2018 2019
11. Operating EBIT RM 14,773 RM 64,391 (RM 217,885)
Profit Margin Sales RM 247,356 RM 134,027 RM 80,956
= 0.0597 = 0.4804 = -2.6914
= 5.97% = 48.04% = -269.14%

The operating profit margin in year 2017 is 5.97% and rise to 48.04% in year 2018. The higher ratio indicates better productivity to
JAYA TIASA HOLDING BERHAD. In the year 2019 the operating profit margin is decrease to -269.14%. It shows that the company’s
productivity is not too stable in the market.

Financial ratio Formula Year

2017 2018 2019
12. Net Profit Earning After Tax RM 10,302 RM 68,494 (RM 218,119)
Margin Sales RM 247,356 RM 134,027 RM 80,956
= 0.0416 = 0.5110 = -2.6943
= 4.16% = 51.10% = -269.43%

The net profit margin in year 2017 was 4.16% and rise to 51.10%. So the company can share the income to shareholders. The
shareholders will invest more to the company if they get more return. However in the year 2019, the net profit margin was slightly decrease to
-269.43%. The JAYA TIASA HOLDING BERHAD cannot share the income to shareholders because they got loss.

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Financial ratio Formula Year
2017 2018 2019
13. Return on Earning After Tax RM 10,302 RM 68,494 ( RM 218,119)
Asset Total Asset RM 2,337,550 RM 2,367,262 RM 2,033,018
= 0.0044 = 0.0289 = - 0.1073
= 0.44% = 2.89% = - 10.73%

The return on assets for JAYA TIASA HOLDING BERHAD is increasing from 0.44% in year 2017 to 2.89% in year 2018 but it drops to
-10.73% in year 2019. This shows a good news to JAYA TIASA HOLDING BERHAD because higher ratio indicates higher return on firm’s
investment. The declining amount of return on assets in year 2019 is due to the company does not manage their operation properly so they
cannot make enough profit to use in assets. In order to solve this problem, DRB-HICOM BERHAD needs to improve their operation
management to gain more profit.

Financial ratio Formula Year

2017 2018 2019
14. Return On Earning After Tax RM 10,302 RM 68,494 ( RM 218,119)
Equity Total Equity RM 1,911,523 RM 1,975,177 RM 1,705,744
= 0.0054 = 0.0347 = -0.1279
= 0.54% = 3.47% = -12.79%

The return on equity in year 2017 is 0.54% and rise to 3.47% in year 2018. So JAYA TIASA HOLDING BERHAD can make a return to
shareholders based on the sale that they get. In year 2019 it was slightly decrease to -12.79% compared to 2018. This shows that the company
fails to manage the shareholder’s investment to generate income. To overcome this problem, JAYA TIASA HOLDING BERHAD should take
action to improve their earning.

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 4.0 VERTICAL ANALYSES
1. Current Ratio

Year
2017 2018 2019
Company
Jaya Tiasa Holdings 1.65 2.15 2.76
Berhad
United Plantation Berhad 6.56 9.99 5.05

The current ratio for Jaya Tiasa Holdings is increase from year 2017 to 2019 but
United Plantation Berhad current ratio increase in year 2017 to year 2018 and decrease in
year 2019.

In year 2017 until 2018 the current ratio for both company increase because both
companies good in inventory management. But 2018 until 2019 Jaya Tiasa Holdings Berhad
increase their current ratio but United Plantation Berhad slightly decrease their current ratio
in year 2019. This is because Jaya Tiasa Holdings Berhad effective in collecting receivables
or an excessive cash burn rate but United Plantation Berhad face problems with inventory
management and ineffective for collecting receivables or an excessive cash burn rate in year
2019. Overall , both companies have good current ratio which are more than 1.

Conclusion , although United Plantation Berhad current ratio slightly decrease in year
2019 but United Plantation Berhad current ratio is better then Jaya Tiasa Holdings Berhad
because the ratio of United Plantation Berhad largest then Jaya Tiasa Holdings Berhad.

2. Quick Ratio

Year
2017 2018 2019
Company
Jaya Tiasa Holdings 1.61 2.12 2.59
Berhad
United Plantation Berhad 6.21 6.00 4.61

The quick ratio for Jaya Tiasa Holdings Berhad continuous increase from year 2017
to year 2019. But quick ratio of United Plantatio continuous decrease from year 2017 to year
2019.

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 The quick ratio for Jaya Tiasa Holdings Berhad continuous increase from year 2017
to 2019 because this company quickly converting receivables into cash and easily able to
cover its financial obligations. But United Plantation Berhad continue decrease quick ratio
from year 2017 to2019 because this company do not quickly converting receivables into cash
and its may this company will struggle with paying debts.

In conclusion , he the quick ratio of Jaya Tiasa Holdings Berhad better than United
Plantation Berhad because quick ratio of Jaya Tiasa Holdings Berhad increase and United
Plantation Berhad quick ratio decrease.

3. Net Working Capital

Year
2017 2018 2019
Company
Jaya Tiasa Holdings RM 175,863 RM 269,107 RM 235,881
Berhad
United Plantation Berhad RM 525,211 RM 512,914 RM 267,337

The net working capital ratio for Jaya Tiasa Holdings Berhad increase from year 2017
to 2018 but decrease in year 2019 while United Plantation Berhad net working capital ratio
continuous decrease from year 2017 to year 2019.

The net working capital ratio for Jaya Tiasa Holdings Berhad increase because its can
cover its debts with its current working capital but United Plantation Berhad net working
capital decrease from year 2017 to 2018 because the company cannot cover its debts with its
current working capital. In year 2018 to 2019 both company net working capital ratio
decrease because both company cannot cover its debts with its current working capital.

As a conclusion , United Plantation Berhad net working capital better than Jaya Tiasa
Holdings Berhad. Although United Plantation Berhad continuous decrease but its still good
value compared to Jaya Tiasa Holdings Berhad.

4. Inventory Turnover

Year
2017 2018 2019
Company
Jaya Tiasa Holdings 17.06 times 17.88 times 3.81 times

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 Berhad
United Plantation Berhad 17.81 times 14.05 times 19.32 times

The inventory turnover for the two company are different. For Jaya Tiasa Holdings
Berhad the inventory turnover was increase from year 2017 to year 2018 and decrease in year
2019. However for United Plantation Berhad it was decrease from year 2017 to year 2018
then increase in 2019.
In 2017, United Plantation Berhad was 17.81 times is higher ratio compared of Jaya
Tiasa Holdings Berhad was 17.06 times. In 2018, Jaya Tiasa Holdings Berhad was 17.88
times is higher ratio compared to United Plantation Berhad was 14.05 times. In 2019, United
Plantation Berhad was 19.32 times is higher ratio compared of Jaya Tiasa Holdings Berhad
was 3.81 times. Its show that United Plantation Berhad very fast sells its inventory and
generate in 2017 and 2019 compared to Jaya Tiasa Holdings Berhad.
In conclusion, we know that low turnover will affect sale and will overstocking.

5. Fixed Asset Turnover

Year
2017 2018 2019
Company
Jaya Tiasa Holdings 0.1309 0.0719 0.0487
Berhad
United Plantation Berhad 0.37 0.36 0.31
The fixed asset turnover for the two company are same. The two company decrease from
year 2017 to year 2019.

In 2017, United Plantation Berhad was 0.37 times is higher ratio compared of Jaya Tiasa
Holdings Berhad was 0.1309 times. In 2018, United Plantation Berhad was 0.36 times is
higher ratio compared of Jaya Tiasa Holdings Berhad was 0.0719 times. In 2019, United
Plantation Berhad was 0.31 times is higher ratio compared of Jaya Tiasa Holdings Berhad
was 0.04878 times.

In conclusion, The United plantation Berhad has higher ratio reflect the effectiveness of
fixed assets to generate sales than Jaya Tiasa Holdings Berhad

6. Total Asset Turnover

Year
2017 2018 2019
Company
Jaya Tiasa Holdings 0.1058 0.0566 0.0398

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 Berhad
United Plantation Berhad 0.27 0.26 0.26

The total asset turnover for Jaya Tiasa Holdings Berhad was decrease from year 2017
to year 2019. However for United Plantation Berhad it was decrease from year 2017 until
2018 and remain the same in 2019.

In 2017, United Plantation Berhad was 0.27 times is higher ratio compared of Jaya Tiasa
Holdings Berhad was 0.1058 times. In 2018, United Plantation Berhad was 0.26 times is
higher ratio compared of Jaya Tiasa Holdings Berhad was 0.0566 times. In 2019, United
Plantation Berhad was 0.26 times is higher ratio compared of Jaya Tiasa Holdings Berhad
was 0.0398 times. It shows a United Plantation Berhad are the effectiveness of total assets to
generate sales. The highest the assets turnover ratio, the more efficient of a company.

In conclusion, if company’s asset turnover ratio is low, it because the company is not
efficiently using its assets to generate sales.

7. Debt Ratio

Year
2017 2018 2019
Company
Jaya Tiasa Holdings 18.23% 12.34% 16.10%
Berhad
United Plantation Berhad 9.99% 10.58% 10.77%

The debt ratio for the two company are different. For Jaya Tiasa Holdings Berhad the
debt ratio was decrease from year 2017 to year 2018 and slightly increase in year 2019.
However for United Plantation Berhad it was always increase from year 2017 until 2019.

In year 2017 to year 2018, debt ratio for Jaya Tiasa Holdings Berhad was decreased
but for United Plantation Berhad was increased. The debt ratio was decreased due to the
decrease of debts or increase of assets. The decrease of debt ratio means that the company
have reduced risks in their business activities. For Jaya Tiasa Holdings Berhad, the reason of
debt ratio decrease is the company pay off several debts from its total liabilities and also a
few investments in total assets. It means that the company has a low level of risks and is
linked to a more independent business that does not need to rely heavily on borrowed funds.

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 However, the debt ratio of both companies in year 2019 has increased slightly from year
2018 due to the increase of debts or decrease of assets. The increase of debt ratio means that
both companies have taken more risks in their business activities. For Hengyuan Refining
Company, debt ratio increase due to the increase of debts is more than the increase of
increase of assets.

As conclusion, Jaya Tiasa Holdings Berhad were taking less risk on business activities as
the debt ratio in the company decrease in year 2017 to year 2018. But the debt ratio in United
Plantation Berhad was lesser than Jaya Tiasa Holdings Berhad in year 2016 to year 2019.

8. Debt to Equity

Year
2017 2018 2019
Company
Jaya Tiasa Holdings 8.08% 13.62% 13.83%
Berhad
United Plantation Berhad 11.10% 11.83% 12.06%

The trend of debt to equity for both companies are same which increase dramatically
from year 2017 to year 2019.
In year 2017 until year 2019, debt to equity of both, companies increase slightly due
to the increase of debt or decrease of equity. It also means that both companies take more
risks in their business activities. Overall, both companies have good debt to equity which are
more than 1.
As conclusion, the debt to equity of Jaya Tiasa Holdings Berhad is better than United
Plantation Berhad because the amount of debt to equity for Jaya Tiasa Holdings Berhad is
largest.

9. Time Interest Earned

Year
2017 2018 2019
Company
Jaya Tiasa Holdings 3.30 times 15.69 times -931.13 times
Berhad
United Plantation Berhad 4.69 times 3.96 times 3.98 times

The trend for time interest earned for both companies are different which for Jaya
Tiasa Holdings Berhad increase from year 2017 to year 2018 but decrease dramatically in

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 year 2019 while United Plantation Berhad was declining from year 2017 to year 2018 and
rise in year 2019.

For Jaya Tiasa Holdings the time interest earned was increase in year 2017 to year
2018 but for United Plantation Berhad it was decrease. Eventhought the amount was decrease
but it still good for both companies because it is more than 1 and both companies able to pay
interest using it operating or income earning.

In year 2019, Jaya Tiasa Holdings Berhad face a big problem because they get a
negative amount for time interest earned. So this means that this company not able to pay
interest because they got loss in that year. To solve this problem, Jaya Tiasa Holdings Berhad
need to manage their operation or reduce cost to gain more income to pay the interest.

As a result, United Plantation Berhad can pay their interest properly compare to Jaya
Tiasa Holdings Berhad.

10. Gross Profit Margin

Year
2017 2018 2019
Company
Jaya Tiasa Holdings 20.79% 0.36% -4.89%
Berhad
United Plantation Berhad 1.02% 1.01% 1.02%

The trend for gross profit margin for both companies are different which for United
Plantation Berhad decrease from year 2017 to year 2018 but increase dramatically in year
2019 while Jaya Tiasa Holdings Berhad continue declining from year 2017 until year 2019.

For United Plantation Berhad, the gross profit margin was decreased from year 2017
to year 2018 but increase in year 2019. As we know the gross profit is obtained from the
difference between sales and cost of goods sold (COGS). The gross profit margin was
decreased dramatically from year 2017 to year 2018 because of the increase of COGS and the
major decrease of the gross profit. This situation happens because of the price of inventories
has increased in the year 2018. The increase of inventories price has caused the company
need to use more money and cause the COGS increase. The sales also decrease because of
the demand slow. In year 2019, the company manage to control COGS such as cost of
purchase inventories and labour cost in order to increase the gross profit. This shows that the
company successfully increase the sales and control COGS to maximize the gross profit.
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 For Jaya Tiasa Holdings Berhad, the gross profit margin was continue decreased from
year 2017 until year 2019 due to the increase of cost of goods sold (COGS) was more than
the sales. This shows that the company has spent more money to purchase inventories and
salary of labour in order to increase the sales, but the increase of sales was not much as the
spending on purchases. It is because of the decrease of gross profit that cause by the increase
of COGS. The company fails to maximize gross profit due to the high COGS.

As the result, the performance in getting gross profit in United Plantation Berhad was
unstable, as the gross profit margin can be decrease, but also can have major to rise in year
2019. In the other hand, the performance in getting gross profit in United Plantation Berhad
was worse than Jaya Tiasa Holdings Berhad as the gross profit margin continue to decline
between years 2017 to year 2019.

11. Operating Profit Margin

Year
2017 2018 2019
Company
Jaya Tiasa Holdings 5.97% 48.04% -269.14%
Berhad
United Plantation Berhad 57.08% 57.57% 43.96%

The trends of operating profit margin for Jaya Tiasa Holdings Berhad and United
Plantation Berhad was rise in year 2017 to year 2018 however it drop in year 2019.
In year 2017 to year 2018, operating profit Margin for both company, Jaya Tiasa
Holdings Berhad and United Plantation Berhad was increase due to the efficiencies increase
profit in generate operation which make the percentage operating profit margin increase in
year 2017 to year 2018.
However, Jaya Tiasa Holdings Berhad and United Plantation Berhad faced a decline
trend in year 2019. Both companies was not having a good condition during the year 2019
which indicates lower operation on company’s productivity; they should make some
improvement on their operating profit margin to generate profit for the company.
As a result, the performance of Jaya Tiasa Holdings Berhad was almost same as
United Plantation Berhad in operating profit margin from year 2017 to year 2019. But the
operating profit margin United Plantation Berhad is stable compare than Jaya Tiasa Holdings
Berhad.

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 12. Net Profit Margin

Year
2017 2018 2019
Company
Jaya Tiasa Holdings 4.16% 51.10% -269.43%
Berhad
United Plantation Berhad 48.28% 47.55% 38.62%

The trend of net profit margin for Jaya Tiasa Holdings Berhad was increase in year
2017 to year 2018 however it decrease in year 2019 while United Plantation Berhad decrease
from year 2017 to year 2019.
The increase of sales for Jaya Tiasa Holdings Berhad in year 2017 to year 2018 due to
the company had put a lot of effort in their business activities for managing the operation to
gain more profit, the better income will attract more shareholders to invest their company. It
course Jaya Tiasa Holdings Berhad has higher standard position than United Plantation
Berhad in year 2016 to year 2017.
Although Jaya Tiasa Holdings Berhad and United Plantation Berhad has face decline
in year 2018 to year 2019 but Jaya Tiasa Holdings Berhad having a serious loss in their profit
and unable provide income share for the shareholders. To overcome the decrease of net profit
margin, both companies should make some improvement to generate profit for the company.
In conclusion, although the trend of United Plantation Berhad was decrease from
2017 to year 2019 but the performance in net profit margin is stable compare with Jaya Tiasa
Holdings Berhad.

13. Return on Asset

Year
2017 2018 2019
Company
Jaya Tiasa Holdings 0.44% 2.89% - 10.73%
Berhad
United Plantation Berhad 12.8% 12.29% 10.18%

The trend of return on asset for Jaya Tiasa Holdings Berhad was increase in year 2017
to year 2018 and it was decrease in year 2019 however the United Plantation Berhad was
decrease from year 2017 to year 2019.
The percentage of return on assets for Jaya Tiasa Holdings Berhad was increase
however United Plantation Berhad decreases in year 2017 to year 2018. The increase of Jaya
Tiasa Holdings Berhad due to increase of earning after tax for companies affect their
percentage of return on assets.

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 In year 2019, The percentage of return on assets for both company was decrease due
to the lower earnings after tax gain by the company. They were not having a good condition
which indicates lower return on company’s investment. Jaya Tiasa Holdings Berhad and
United Plantation Berhad should manage their assets wisely to avoid problem of waste
resources.
As a result, the performance of United Plantation Berhad is better and able to generate
the profit compare with Jaya Tiasa Holdings Berhad in year 2017 to year 2019.

14. Return on Equity

Year
2017 2018 2019
Company
Jaya Tiasa Holdings 0.54% 3.47% -12.79%
Berhad
United Plantation Berhad 14.23% 13.74% 11.41%

In return on equity, the trend for both company are different which for Jaya Tiasa
Holdings Berhad increase in year 2017 to year 2018 and decrease in year 2019 while United
Plantation Berhad which decreases from year 2016 to year 2019.
The percentage of return on equity increase for Jaya Tiasa Holdings Berhad while
United Plantation Berhad decreases in year 2017 to year 2018, it mean that measurement of
resources for Jaya Tiasa Holdings Berhad are used efficiency in producing earning from year
2017 to year 2018.
The percentage of return on equity for both companies in year 2019 was decrease.
Jaya Tiasa Holdings Berhad is less efficiency as compared to United Plantation Berhad and
influence the percentage of return on equity drop. To increase the percentage of return on
equity, both companies should increase the business activities in their operation to generate
profit
As conclusion, return on equity of the United Plantation Berhad is better than Jaya
Tiasa Holdings Berhad. United Plantation Berhad able to generate profit to shareholder from
year 2016 to year 2017.

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5.0 CONCLUSION
By doing this assignment, we have analysis both company performance which is
United Plantations Berhad and Jaya Tiasa Holdings Berhad from year 2017 to 2019 by using
horizontal and vertical analysis that learned from financial management.
In horizontal analysis, we use liquidity ratio, activity ratio, leverage ratio and
profitability ratio to determine the trend for United Plantations Berhad and Jaya Tiasa
Holdings Berhad either increase or decrease from year 2017 to 2019. In vertical analysis, we
make a comparison of performance between United Plantations Berhad and Jaya Tiasa
Holdings Berhad from year 2017 to 2019 based on both company’s liquidity ratio, activity
ratio, leverage ratio and profitability ratio.
Suggestion for United Plantation Berhad. First, proposed Renewal of Authority for
Purchase of Own Shares because company provided that the aggregate number of ordinary
shares purchased and/or held pursuant to this resolution shall not exceed ten per centum
(10%) of the total issued and paid-up share capital of the company at any given point in time
and an amount of funds not exceeding the total retained profits of the company and the share
premium account of the company based on the audited financial statements for the financial
year ended 31 December 2016. Second, improving management. It is true to say that the
supply of good managers with experience has not kept pace with the expansion of
plantations. There is little time for most assistants to develop well before they are made

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managers. Very few dismissals have occurred compared to the days when there were many
planters and few estates. Then only the most efficient had survived
Suggestion for Jaya Tiasa Holding Berhad. More company have their own idea for
increased their products. Research & Development Companies should allocate more money
for R&D in order to find breakthroughs. Breakthroughs have boosted productivity. It is time
again to look far and wide for expertise, even if they are on contract basis with defined
projects with a limited time span. Then the companies are not burdened with overheads after
the purpose of the project is over. Examples for research projects include finding ways to cut
bunch more easily so that it does not need so much energy and skill. Then the costs of
harvesting can be reduced. There may be a way to contain the ripe bunches on the trees so
that when the bunches fall, the loose fruits do not scatter.
Lastly, United Plantations Berhad and Jaya Tiasa Holding Berhad have a different
strategies to improve their company. In conclusion, I would recommend strongly that
plantation companies should use their profits prudently for the long-term growth of the
business. They should invest now in order to withstand the times that lie ahead, and remain in
profit when prices are low.

APPENDIX
JAYA TIASA HOLDINGS BERHAD– ANNUAL REPORT 2017

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JAYA TIASA HOLDINGS BERHAD– ANNUAL REPORT 2018

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JAYA TIASA HOLDINGS BERHAD– ANNUAL REPORT 2019

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28
UNITED PLANTATION BERHAD – ANNUAL REPORT 2017

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UNITED PLANTATION BERHAD – ANNUAL REPORT 2019

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