Fin 420 - Case Study Assignment

ASSIGNMENT TITTLE: GROUP CASE STUDY
FINANCIAL MANAGEMENT (FIN 420)
PREPARED FOR
SIR MUSTAFA KAMAL BIN MAT
PREPARED BY
NO NAME STUDENT ID
1. NUR SYAZANA SUHAILA BINTI MOHD 2017647296
RIZAL
2. NUR SYAFIQAH BINTI ALI 2015414948
BA243 / BM243 – NBM2B
SUBMITTION DATE: 09 JANUARY 2021

TABLE OF CONTENT
NO CONTENT PAGES
1. 1.0 Introduction 3
2. 2.0 Background of the industry and the company 4-5
 Ajinomoto (M) Berhad
 Brahim’s Holding Berhad
3. 3.0 Analysis of ratios for each year
6-23
 Liquidity analysis
 Leverageanalysis
 Profitability analysis
 Operating analysis
 Valuation analysis
4 4.0 Recommendation 24
5. 5.0 Conclusion 25
6. 6.0 Summary 26
7. 7.0 References 27
8. 8.0 Bibliography 28
9. 5.0 Appendix 29-30
 Ajinomoto (M) Berhad - (2016 -2019)
 Brahim’s Holding Berhad - (2016 -2019)
2|Page
INTRODUCTION
The main focus of this report is to make a comparison report that can help to show the
comparison between two organizations that are working in the same industry which is Ajinomoto
(M) Berhad and Brahim’s Holding Berhad.
This report starts with the introduction of both selected companies. This report also
highlights the financial performance of both companies that define the company’s financial
position with a historical trend within the market.
Moreover, the ratio analysis is also used in this report in context to analyze the financial
performance of the companies of last three years. For conducting the comparison between both
the companies, different ratios such as liquidity analysis ratio, leverage analysis ratio,
profitability analysis ratio, operating analysis ratio and valuation analysis ratios are used.
The ratio analysis to analyze the sustainability and growth of Ajinomoto (M) Berhad.in
comparison with the nearest peer competitor in the industry which is Brahim’s Holding Berhad.
By preparing the company’s financial statement analysis it helps us in understanding the
financial performance of the company derived from its financial statements.
Moreover, this is to measure the financial position on whether to in est inAjinomoto (M)
Berhad. andBrahim’s Holding Berhad. byanalyzing the data and also the strength and
weaknesses of the company. On the other hand, the comment on the potential impact of currency
fluctuations will discuss in this report.
3|Page
BACKGROUND THE INDUSTRY AND THE COMPANY
AJINOMOTO (MALAYSIA) BEHAD
Ajinomoto (Malaysia) Berhad started its business operations in 1961 as AJI-NO-MOTO

Monosodium Glutamate (MSG) producer. It is one of the very first Japanese companies to be set
up in Malaysia. Ajinomoto (Malaysia) Berhad has since grown into a dynamic food and
seasoning manufacturer marketing diverse brand name that is trusted by Malaysian for decades.
Our AJI-NO-MOTO® Umami seasoning has become an indispensable item in almost every
household.
Ajinomoto (M) Berhad was listed on Bursa Malaysia in1970. The company also continue
to introduce retail products including umami seasonings, stock seasoning under various brand as
well as industrial products to cater to industrial food producers of instant noodles, seasonings
snack foods, sauces, processes foods and other. In other segment consists of products sold by the
Company, such as industrial sweetener, frozen food and provision of services in relation to food
industry.
With a proven track record of over 5 decades, Ajinomoto (M) Berhad, umami seasoning
has become a household brand among Malaysian consumers. Over the years, Ajinomoto (M)
Berhad strong brand and steady consumer demand translated into steady earnings growth.
4|Page
BRAHIM’S GROUP
Brahims (brand of Dewina Food Industries) is synonymous with delicious, convenient,

ready-to-eat meals and has become a household name in Malaysia. Our products can be found on
supermarket shelves all over the world including United Kingdom, United States, Singapore,
Brunei, Japan and now Australia.
Australia already has a long history of Malaysian meals and Asians cooking sauces since
the 1980s. The issue however has always been the quality and authenticity of the sauces.
Brahim’s range of Asian simmer sauces, cooking sauces and ready-to-eat meals enables cooking
of classic authentic Malaysian and Asian dishes effortlessly at home. Quality and premium
ingredients are present within every product to create the most authentic asian meal at home.
All Brahim’s products are MSG Free, Preservative Free and Free from Food Colouring.
Brahim products are all Halal Certified.
The manufacturer of Brahim’s products, Dewina Food Industries SdnBhd (54653-D) was
founded in 1986 by it’s Managing Director, Datuk Haji Ibrahim bin Haji Ahmad Badawi, a
former university lecturer and specialist in food and agricultural consultancy and research,
together with Mr. Tatsunobu Abe, a Japanese Entrepreneur.
In its initial years of operation, DFI was better known as a supplier of military rations to
regional armies and the United Nations Peacekeeping Forces, due primarily to the unique
features of its retort pouch products.
Brahim’s gradually gained steady commercial market presence and strong brand
awareness within Malaysian and regional markets. Production capacity was increased to meet
growing demands.
5|Page
ANALYSIS OF RATIOS FOR EACH YEAR
Table 1.0 : Liquidity, Leverage, Profitability, Operating, valuation for year 2016-2019
2016 2017 2018 2019

RM RM RM RM
Ajinomoto (M) Berhad
Liquidity
Current Ratio 6.19 times 9.73 times 10.6 times 8.12 times
Quick Ratio 5.29 times 8.38 times 9.4 times 7.35 times
Leverage
Debt Ratio 0.19 % 0.12 % 0.11 % 0.14 %
Times interest earned 83.09 times 38.45 times 20.60 times 21.70 times
Profitability
Return on asset 0.14 % 0.39 % 0.13 % 1.06 %
Return on equity 0.17% 0.44% 0.15% 0.15%
Net profit margin 0.13 times 0.44 times 0.13 times 0.16 times
Operating
Total asset turnover 1.09 times 0.78 times 0.90 times 6.38 times
Inventory turnover 1.42 times 0.16 times 0.53 times 0.2 times
Average collection period 1.13 days 6.45 days 4.50 days 2.40 days
Valuation
Price earnings ratio 0.015x 3.24x 0.01x 0.011x
Earnings per share ratio 0.47x -11.66x -0.45x 0.73x
Brahim's Holding Berhad
Liquidity
Current Ratio 2.79 times 1.65 times 0.57 times 0.65 times
Quick Ratio 2.75 times 1.54 times 0.52 times 0.61 times
Leverage
Debt Ratio 0.55 times 0.52 times 1.25 times 1.6 times
Times interest earned 0.90 times 18.8 times 20.49 times 3.50 times
Profitability
Return on asset 0.31% 0.35% 0.95% 0.05%
Return on equity 0.49% 0.54% 0.97% 19.03%
Net profit margin 0.46 times 0.45 times 0.44 times 0.062 times
Operating
Total asset turnover 0.69 times 0.78 times 0.97 times 0.70 times
Inventory turnover 0.75times 0.75 times 0.75 times 0.52 times
Average collection period 8.0 days 5.8 days 6.44 days 5.70 days
Valuation
Price earnings ratio 1.27x 0.16x 6.30x 0.047x
Earnings per share ratio 0.48x 1.98x 0.70x 1.23x
Brahim’s Holdings Berhad (Ratio Analysis for 2016 – 2019)
6|Page
2016
a)Liquidity analysis
 Current ratio
Current Asset / Current Liabilities = RM382, 087 / RM136,565 = 2.79 times
 Quick ratio
Current asset – inventories / Current Liabilities = RM382,087 – RM6126 / RM136,565 = 2.75

times
b)Leverage analysis
Debt ratio
 Debt to equity ratio = Total liabilities / Total equity = RM136,565 / RM245,522 = 0.55
times
 Debt to total capital = Total liabilities / Total liabilities + equity
= Debt to equity ratio = RM136,565 / 136,565 + 245,522 = 136,565 / 382,087 = 0.35 times
Times interest earned (TIE)
Earning before interest and tax (EBIT) / interest expense
= TIE = 8164 / 8992 = 0.90 times
c)Profitability Analysis
 Return on Asset (ROA)
Net profit / Total Asset x 100% =
RM120,431 / RM382,087 x 100% = 0.31
 Return on Equity (ROE)
Net income (annual) / Shareholder’s equity
= RM120,431 / RM245,522 = 0.49
 Net profit margin

Net profit / sales = RM120,431 / RM266,364 = 0.46
7|Page
d)Operating Analysis
 Total asset turnover

Sales / Total Assets
RM266,364 / RM382,087 = 0.69 times
 Cost of Goods Sold / Inventories = RM4,598 / RM6126 = 0.75x
 Average collection period
365 days / receivable turnover

= 365 days / RM45,593 = 8.0 days
e)Valuation Analysis
 Price earnings ratio (P/E)

Share Price / Earnings per Share
= 0.66 / (0.52)
= 1.27x
 Earnings per share ration (EPS)

Net Income – Dividend / Weighted Average Number of Shares Outstanding
= 112,411 – 0 / 236,286
= RM 0.48
8|Page
2017
 Current ratio
Current Asset / Current Liabilities = RM98,028 / RM59,232 = 1.65 times
 Quick ratio
Current asset – inventories / Current Liabilities = RM98,028 – RM6259 / RM59,232 = 1.54

times
b)Leverage analysis
Debt ratio
 Debt to equity ratio = Total liabilities / Total equity = RM127,955 / RM243,354

= 0.52 times
= TIE = 15,579 / 825 = 18.8 times
RM132,096 / RM371,309 x 100% = 0.35
= 132,096 / RM243,354 = 0.54
9|Page
Net profit / sales = RM132,096 / RM291,563 = 0.45

RM291,563 / RM371,309= 0.78 times
 Inventory turnover
Cost of Goods Sold / Inventories = RM4,598 / RM6,259 = 0.75x

= 365 days / RM61,925 = 5.8 days

= 0.47 / (2.94) = 0.16x

= (RM 2,168) – RM1,700 / RM236,286
= RM1.98
10 | P a g e
2018
 Current ratio
 Quick ratio
Current asset – inventories / Current Liabilities = RM89,849 – RM7451/ RM156,870
= 0.52 times
b)Leverage analysis
Debt ratio

= 1.25 times
= TIE = 121,145 / 5912 = 20.49 times
RM268,359 / RM281,585 x 100% = 0.95
= RM121,145 / RM121,145 = 0.97 %
11 | P a g e
Net profit / sales = RM121,145 / RM274,271 = 0.44 %

RM274,271 / RM281,585= 0.97 times
Cost of Goods Sold / Inventories = RM5,614 / RM7451 = 0.75

= 365 days / RM 56,687 = 6.44 days

RM0.28/ (RM44.44)
= RM6.30x

= RM158,278 – 0 / RM236,386
= 0.70x
12 | P a g e
2019
 Current ratio
 Quick ratio
Current asset – inventories / Current Liabilities = RM119,643 – RM8096 / RM182,323
= 0.61 times
b)Leverage analysis
Debt ratio

= 1.6 times
= TIE = 29, 069 / 8390= 3.50 times
(RM13,500) / RM289,683 x 100% = 0.047
13 | P a g e
=RM292,289 / RM15,353
= 19.03
Net profit / sales

= RM13,500 / RM208,626
=0.062%
=RM208,626 / RM298,683
=0.70times
Cost of Goods Sold / Inventories

= RM4,210 / RM8,096
= 0.52

= 365 days / RM63,950
= 5.70 days

= RM0.31 / (6.50)
= RM0.047x
14 | P a g e
= RM292,289 – RM2,190 / RM236,386
= 1.23x
Ajinamoto (Ratio Analysis for 2016 – 2019)
15 | P a g e
2016
 Current ratio
Current Asset / Current Liabilities = RM367,053,498 / RM59,240,013 = 6.19 times
 Quick ratio
Current asset – inventories / Current Liabilities = RM367,053,498 – RM53,309,443 /

RM59,240,013
= 5.29 times
b)Leverage analysis
Debt ratio
 Debt to equity ratio = Total liabilities / Total equity = RM59,240,013 / RM307,813,485

= 0.19 times
= Debt to equity ratio = RM59,240,013 / RM59,240,013 + RM307,813,485 = RM59,240,013 /

RM367,053,498 = 0.16 times
= TIE = RM53,941,447 / RM649,188= 83.09 times
RM53,941,447 / RM367,053,498 x 100% = 0.14 times
16 | P a g e
= RM53,941,447 / RM367,053,498 – RM59,240,013
= RM53,941,447 / RM307,813,485 = 0.17%
Net profit / sales = RM53,941,447 / RM400,200,539 = 0.13 times
Sales / Total Assets = RM400,200,539 / RM367,053,498 = 1.09 times
Cost of Goods Sold / Inventories = RM75,901,059 / RM53,309,443 = 1.42

= 365 days / RM 32,257 = 1.13days

= RM1.00 /RM 67.10 = 0.015x
 Earnings per share ratio (EPS)

=RM40,787,009 – (RM12,159,707) / 60,798534
= 0.47
17 | P a g e
2017
 Current ratio
 Quick ratio
Current asset – inventories / Current Liabilities = RM441,375,721– RM61,501,284 /

RM45,327,601
= 8.38 times
b)Leverage analysis
Debt ratio

= 0.12 times

RM532,437,851 = 0.10 times
= TIE = RM211,468,990 / RM5,499,629 = 38.45 times
RM211,468,990 / RM532,437,851 x 100% = 0.39 times
18 | P a g e
= RM211,468,990 / RM532,437,851 – RM57,800,315
= RM211,468,990 / RM474,637,536 = 0.44 times
Net profit / sales = RM187,462,280 / RM419,917,079 = 0.44 times
Sales / Total Assets = RM419,917,079 / RM532,437,851 = 0.78 times
Cost of Goods Sold / Inventories = RM9,582,546 / RM61,501,284 = RM0.16

= 365 days / (5,662,868) = 6.45 days

= RM1.00 / RM308.30= 3.24x

RM211,468,990 – 920,519,505) / 60,798,534 = (11.66)x
19 | P a g e
2018
 Current ratio
Current Asset / Current Liabilities = RM400,659,886 / RM37,451,218= 10.6 times
 Quick ratio

RM37,451,218
= 9.4 times
b)Leverage analysis
Debt ratio

= 0.11 times

RM486,591,789 = 0.10 times
= TIE = RM67,068,164 / (3,255,804) = 20.60 times
RM67,068,164 / RM486,591,789 x 100% = 0.13 times
20 | P a g e
= RM67,068,164 / RM486,591,789 – RM49,462,684
= RM67,068,164 / RM437,129,105 = 0.15 times
Net profit / sales = RM 56,262,095 / RM436,300,000 = 0.13 times
Sales / Total Assets = RM 436,300,000 / RM 486,591,789 = 0.90 times
Cost of Goods Sold / Inventories = RM24,097,332 / RM 45,743,251 = 0.53

= 365 days / (8,190,119) = 4.50

= RM 1.00 / RM92.54 = RM0.01

= RM67,068,164 – (94,237,727) / 60,798,534 = (0.45)x
21 | P a g e
2019
 Current ratio
 Quick ratio

RM56,116,876
= 7.35 times
b)Leverage analysis
Debt ratio

= 0.14 times

RM533,261,262 = 0.12 times
= TIE = RM72,659,111 / (3,354,770) = 21.70 times
RM56,581 / RM533,261,262 x 100% = 1.06 times
22 | P a g e
= RM72,659,111 / RM533,261,262 – RM67,926,465
= RM72,659,111 / RM465,334,797 = 0.15 times
Net profit / sales = RM56,581 / RM340,376 = 0.16 times
Sales / Total Assets = RM340,376 / RM533,261,262 = 6.38 times
Cost of Goods Sold / Inventories = RM8,775,097 / RM 44,632,081 = 0.20

= 365 days / (15,177,206) = 2.40

= RM1.00 / RM93.06 = 0.011

= RM72,659,111- (28,271,318) / 60,798,534 = 073x
23 | P a g e
RECOMMENDATION
In review, the both company between Ajinomoto (M) Berhad andBrahim’s Holding Berhad that
under the same category which is consumer product and services. Both of companies has their
own achievement from year 2016 until 2019. There are new developments on product in their
company to extend their market into another level.
After done the analysis of ratios for each year 2016 until 2019, the liquidity analysis for
Ajinomoto (M) Berhad shows more stable with the ratio pattern have increase and decrease
times the with minor effect profit and loss. For Brahim’s Holding SdnBhd shows decrease of
liquidity analysis that consist of current ratio and quick rattio. Brahim should expend their
market not only focusing in airline catering business to increase their cash flow. Since
Ajinomoto (M) Berhad does not have borrowings, plus their cash flow shows an increasing from
year to year they will be no worry on their any liquidity issues.
The leverage analysis for both company shows an increasing from year 2017 until 2019 this
good for both company as their can manage debt and interest gain every year is surplus.
Furthermore, profitability analysis shows that returns on equity are stable while return on asset
increase. For Brahim’s Holding Berhadcan improve its return on equity in reducing, Use more
financial leverage. Companies can finance themselves with debt and equity capital. By
increasing the amount of debt capital relative to its equity capital, a company can increase its
return on equity.
Moreover, the operating analysis for both company Ajinomoto (M) Berhad and Brahim’s
Holding Berhad stable year to year, this is shows that both company still gain profit in their
market. Finally, the valuation analysis of their company shares show increase and decrease from
2016 until 2019 this maybe causes by economic impact as on 2019 have an outbreak of Covid-19
pandemic.
24 | P a g e
CONCLUSION
Financial ratio analysis can mark how a company is performing over time, while comparing a
company to another within the same industry or sector. Financial ratios have been recognized on
their capabilities in enabling management to evaluate their company financial performance to the
analyst and management divisions. However, it sometime also has the limitation when sent
wrong analysis of the financial health and performance of business. But financial ratios can also
be the best references in explaining what has happened in the past and can help the management
and financial analysts to understand business trends. While some trends can help illustrate the
future of a business that may seem, in other part this ratio still cannot give a real forecast for the
business.
It is to be concluded for this study that, this is a very difficult to make decision about any of the
company performance and the measurement tools, because all the formulas and functions are
applied to attain a specific requirement of the company as the part of the company’s financial
strategy. So, the qualitative information will also need to understand the purpose of the company
to use any of the tools to measure their performance. Finally, it could be recommended that the
importance of the ratio analysis depends on the stakeholder’s specific need and the situational
requirement
25 | P a g e
SUMMARY
Based on company both Annual Report , we saw that both company are doing well in their
business to manage and strengthen their performance and financials by actively identifying
potential opportunities especially in Halal Food industry. For example, to ensure future growth,
Brahim’s group focus and concentration towards reaglining and building up the airline catering
segment. At the same time, they also looking for at the opportunities in non-airline catering
sectors for greater utilization of food production capability.
Other than that, to meet customer’s needs and satisfaction, Ajinomoto has expand their retail
product by include chicken stock, menu seasoning for local dishes, sweetener and so on. In
addition to strengthening the sales of other seasoning product such as Tumix, Seri Aji and AJI
SHIO in the household and food service market. Ajinomoto also launched new product named
‘RASA SIFU’ to delight family households and consumers with delicious new taste and
convenience in cooking.
26 | P a g e
REFERENCES
1. Fundamentals of Finance by Simon Benninga (Oxford)

2. https://www.investopedia.com/terms/r/ratioanalysis.asp#:~:text=Ratio%20analysis
%20compares%20line%2Ditem,the%20same%20industry%20or%20sector.
3. https://corporatefinanceinstitute.com/resources/knowledge/finance/financial-ratios/
4. https://www.accountingtools.com/articles/financial-ratio-analysis.html
5. https://courses.lumenlearning.com/wmopen-introbusiness/chapter/financial-ratio-
analysis/
6. https://www.bursamalaysia.com/trade/trading_resources/listing_directory/company-
profile?stock_code=9474
7. https://www.bursamalaysia.com/trade/trading_resources/listing_directory/company-
27 | P a g e
BIBLIOGRAPHY
Bursa Malaysia. Ajinomoto (M) Berhad&Brahim’sHoldingBerhad. Annual Report 2016 until 2019.
Retrieved the annual reports
from :https://www.bursamalaysia.com/market_information/announcements/company_announcement
Bursa Malaysia. Details of company stock price for Brahim’s Holding Berhad.
Retrieved from :https://www.bursamalaysia.com/trade/trading_resources/listing_directory/company-

Bursa Malaysia. Details of company stock price for Ajinomoto (M)Berhad .
Retrieved from : https://www.bursamalaysia.com/trade/trading_resources/listing_directory/company-

28 | P a g e
APPENDIX
AJINOMOTO (M) BERHAD
29 | P a g e
APPENDIX
BRAHIM HOLDING BERHAD
30 | P a g e

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ASSIGNMENT TITTLE: GROUP CASE STUDY

FINANCIAL MANAGEMENT (FIN 420)

SIR MUSTAFA KAMAL BIN MAT

BA243 / BM243 – NBM2B

SUBMITTION DATE: 09 JANUARY 2021

AJINOMOTO (MALAYSIA) BEHAD

Ajinomoto (Malaysia) Berhad started its business operations in 1961 as AJI-NO-MOTO

Brahims (brand of Dewina Food Industries) is synonymous with delicious, convenient,

2016 2017 2018 2019

Current Asset / Current Liabilities = RM382, 087 / RM136,565 = 2.79 times

Current asset – inventories / Current Liabilities = RM382,087 – RM6126 / RM136,565 = 2.75

Times interest earned (TIE)

Earning before interest and tax (EBIT) / interest expense

= TIE = 8164 / 8992 = 0.90 times

 Return on Asset (ROA)

Net profit / Total Asset x 100% =

RM120,431 / RM382,087 x 100% = 0.31

 Return on Equity (ROE)

Net income (annual) / Shareholder’s equity

= RM120,431 / RM245,522 = 0.49

 Net profit margin

 Total asset turnover

 Average collection period

365 days / receivable turnover

 Price earnings ratio (P/E)

 Earnings per share ration (EPS)

Current Asset / Current Liabilities = RM98,028 / RM59,232 = 1.65 times

Current asset – inventories / Current Liabilities = RM98,028 – RM6259 / RM59,232 = 1.54

 Debt to equity ratio = Total liabilities / Total equity = RM127,955 / RM243,354

Times interest earned (TIE)

Earning before interest and tax (EBIT) / interest expense

= TIE = 15,579 / 825 = 18.8 times

 Return on Asset (ROA)

Net profit / Total Asset x 100% =

RM132,096 / RM371,309 x 100% = 0.35

 Return on Equity (ROE)

Net income (annual) / Shareholder’s equity

= 132,096 / RM243,354 = 0.54

 Net profit margin

 Total asset turnover

Sales / Total Assets

Cost of Goods Sold / Inventories = RM4,598 / RM6,259 = 0.75x

 Average collection period

365 days / receivable turnover

 Price earnings ratio (P/E)

= 0.47 / (2.94) = 0.16x

 Earnings per share ration (EPS)

= (RM 2,168) – RM1,700 / RM236,286

Brahim’s Holdings Berhad (Ratio Analysis for 2016 – 2019)

Current Asset / Current Liabilities = RM89,849 / RM156,870 = 0.57 times

Current asset – inventories / Current Liabilities = RM89,849 – RM7451/ RM156,870

 Debt to equity ratio = Total liabilities / Total equity = RM156,870 / RM124,715

 Debt to total capital = Total liabilities / Total liabilities + equity

Times interest earned (TIE)

Earning before interest and tax (EBIT) / interest expense

= TIE = 121,145 / 5912 = 20.49 times

 Return on Asset (ROA)

Net profit / Total Asset x 100% =