DIPLOMA IN MANAGEMENT

DBA 2120

FINANCIAL ACCOUNTING

GROUP ASSIGNMENT: TOP GLOVE COMPANY (2018-2019)

PREPARED BY:

STUDENT NAME MATRIC ID

MUHAMMAD NORUL HIDAYAT BIN JUPRI 0419010135
PREEMILLAH A/P RAMU 1019011176
PRIYATHARSHINI A/P SHANMUGAM 1019010959

PREPARED FOR:

Table of Contents

1.0 Executive Summary 3

2.0 Introduction 4

3.1 Discussion

3.1 Current Assets…………………….…………………………………………………...6

3.2 Non- current Assets……………...………………...

…………………………..............7

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 3.3 Current liabilities……………………………………...………………………………8

3.4 Non-current liabilities……………………...……………………………….…………

3.5 SWOT Analysis…………………………………………………………………........10

4.0 Recommendations………………………………………………………………………12

5.0 Conclusion…………………………………………………………………………….....13

6.0 Appendixes………………………………………………………………………………14

7.0 References……………………………………………………………………………….16

1.0 Executive Summary

First of all, this report is about the analysis or outline of Top Glove Company
direct examination of the few parts of the fiscal summaries of the organization. Thus, we
have been analysing the current assets, on-current assets, current liabilities and current
liabilities of Top Glove Company from the year 2018 to year 2019. The report plans to

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 address the critical territories of execution by the organization by directing proportion
examination and separated investigation of significant things and in this way zeroing in
on the territories to be improved by the organization. Outside impacts that don't cover the
monetary viewpoint yet may influence the financial backer's choice have been
additionally recognized and talked about. These incorporate the market rating given by
different credit score offices and the investigation of the industry in which the
organization has a place on the grounds that the organization doesn't work as an
autonomous element and its prosperity and disappointment relies upon bunches of
components. Finally, we also recommended the ways to improve an company financially
after analyse the company’s financial statement.

1.0 Introduction
Company Background (TOP GLOVE)

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 Figure 1: Top Glove Corporation
The organization that I choose is Top Glove Corporation. Based on the survey,
Top Glove is the one of the largest rubber glove manufactures. Other than that, this
company also produced and specialises in face masks, condoms, dental dams, and
other products. Other than that, the chairman of the Top Glove company is an Sri Dr
Lim Wee Chai. The vision of the company is ‘We strive to be the world’s leading
manufacturer with excellent quality glove products and services that enrich and
protect human lives. Thus, the mission of the company is ‘World class glove
manufacturer by providing top quality products with excellent services through
continuous improvement and innovation.’

Thus, the company has been established in 1991 and settled in Malaysia, Top
Glove Corporation Bhd is the world's biggest producer of gloves. Which began as just
a neighbourhood business venture with 1 processing plant and 1 glove creation line,
has today caught 26% of the world piece of the overall industry for elastic gloves. The
organization has producing tasks in Malaysia, Thailand, Vietnam and China. It
additionally has showcasing workplaces in these nations just as USA, Germany and
Brazil and fares to more than 2,000 clients in 195 nations around the world.

Hence, this company is listed on the Malaysian Bourse (2001) and Mainboard
of the Singapore Exchange (2016), Top Glove has demonstrated steady growth with a
compound annual growth rate (CAGR) of 23.1% for revenue and 28.2% for profit
after tax over the past 20 years. It is also a component stock of the MSCI Global
Standard Index, FTSE Bursa Malaysia KLCI Index, FBM Top 100 Index, FBM Emas
Index, FBM Hijrah Syariah Index, FBM Emas Syariah Index, FTSE4Good Bursa
Malaysia Index and the Dow Jones Sustainability Index (DJSI) for Emerging Markets.

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 In accordance with its obligation to maintainability, Top Glove will keep on
step up its practices in the ESG space especially as far as work rehearses. In instance,
with the assistance of its 21,000 workers, Top Glove keeps on delivering excellent
gloves at a proficient ease in accordance with now is the ideal time tried Business
Direction. Not substance to settle for the status quo, Top Glove has focused on higher
yearnings which incorporate turning into a Fortune Global 500 Company by 2030. In
like manner, it keeps on extending its business scope and to be watching out for M&A
openings in comparable and related ventures.

Other than that, this company also provides hostels for Malaysians and foreign
employees. The speciality is both category of employees provides hostels separately.
Thus, Top Glove also owned hospitality facilities and also clinics to their staffs. The
main headquarters of Top Glove is located at Shah Alam. Moreover, the Top Gloves
is also one of the main companies who provide internship to graduated students and
they also provide official web page to make the candidates easier and it is the
platform for those who finding vacancies and place to intern to send all their details
regarding job applications.

3.0Discussion

3.1 Current Asset

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 First of all, current assets means are generally the resources of an organization
that are relied upon to be sold or utilized because of standard business tasks
throughout the following year. Thus, current assets include cash, cash equivalents,
accounts receivable, stock inventory, marketable securities, pre-paid liabilities, and
other liquid assets and current assets are important to businesses because they can be
used to fund day-to-day business operations and to pay for the ongoing operating
expenses. Based on the graph below shows the current assets of Top Glove Company:

Current Assets of Top Glove Company from year 2018-2019

8000

7000

6000

5000

4000

3000

2000

1000

2018 2019

Graph 1: Current Asset of Top Glove 2018-2019

Based on the graph line above, the current asset of Top Glove company in the
year 2018 is RM3236 while in the year 2019 is RM7423. Thus, RM4187 increase in
the year 2019. It shows the Top Glove company has the positive working capital and
its sign the company’s financial strength. In addition, it shows the abilities to pay the
creditors by the Top Glove company is positive

3.2 Non-Current Assets

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 Furthermore, non-current assets means are assets that acquired not for
resale but to be used in the operations of the business with useful lives of more
than one year. Non- current assets are divided into three categories:
 Tangible non-current assets
 Intangible non- current assets
 Investment

Thus, the graph below shows the non-current assets of Top Glove company in the year
2018 to 2019:

Non- Current Assets of Top Glove Company 2018-2019

1035000
1030000
1025000
1020000
1015000
1010000

2018 2019 Gr
aph 2: Non – Current Assets of Top Glove Company

Based on the bar graph, the non-current assets of the Top Glove company is
RM1018960 in the year 2018 and RM1031056 in the year 2019. This shows, that the non-
current assets have been increased RM12096, which means the company is at risk. So, it

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 is advised that the company should depreciation, depletion, or amortization may be used
to gradually reduce the amount of a noncurrent asset on the balance sheet. Hence,
according to the analysis, the non-current assets is more than the assets in the year 2018-
2019. So, there is more risk associated with noncurrent assets than with current assets,
since they may decline in value during their extended holding periods. An excessive
amount of reduction in value may lead to an impairment charge.

3.3 Current Liabilities

In addition, current liabilities means is a commitment that is payable inside one
year. The group of liabilities containing current liabilities is firmly watched, for a
business should have adequate liquidity to guarantee that they can be taken care of when
due. Any remaining liabilities are accounted for as long-term liabilities, which are
introduced in a gathering lower down yet to be determined sheet, beneath current
liabilities. Thus, the graph below shows the current liabilities of Top Glove company:

Current Liabilities of Top Glove Company From 2018-2019

1750000
1700000
1650000
1600000
1550000
1500000
1450000
1400000
1350000
1300000
current liabilities

2018 2019

Graph 3: Current Liabilities of Top Glove Company

Based on the bar graph above, the current liabilities of the Top Glove company are
pretty clear that, in the year 2019 have been increased than in the year 2018. As we
analyse based on the Top Glove company financial statement, the current liabilities of
2019(RM1691,791) and 2018 (RM1451571) which increased 14% in percentage. So, this

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 shows that liabilities are vital aspect of Top Glove company and it clearly shows that the
company is running a stable finance operation and able to pay large expansions. The high
current liabilities show the company has the flexibility in transactions to run their
business. This is because the high current ratio indicates that the company is more likely
to pay their creditors back.

3.4 Non-Current Liabilities

Non- current liabilities also known as long-term liabilities, are commitments recorded
on the accounting report not due for over a year. Examples of noncurrent liabilities
include long-term loans and lease obligations, bonds payable and deferred revenue. Thus,
the graph below shows the non- current liabilities of Top Glove Company from the year
2018 to year 2019:

Non-Current Liabilities of Top Glove Company From the Year 2018-2019

16000000
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
Category 4

2018 2019

Graph 4: Non-Current Liabilities of Top Glove Company

Based on the bar graph, the non-current liabilities of Top Glove company, is
decreased compared to the both years (2018-2019). Thus, in the year 2019(RM1542273)
and in the year 2018 (RM14473883) which decreased RM12931,610. This shows that the
lower the percentage, the less leverage a company has, and the stronger its equity

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 position. Hence, a high percentage shows that the company has high leverage, which
increases its default risk.

3.5 SWOT Analysis

 Strength
According to the survey, the SWOT analysis is used to analyse the pros and cons
of a company. This make sure they able to detect their cons and implement ways to
overcome their weakness. Thus, the strength of the Top Glove is global market leader
which means the organization profit by acquiring financial aspects of scales by produce in
immense limit through 371 creation lines. The results of Top Glove are likewise being
available in around the world. The organization has acquired the worldwide piece of the
pie at about 23% as of now and it attempts to improve their procedures to expand their
worldwide piece of the pie to 30% by year 2012. Plus, Top Glove is being perceived and
granted The World's Best Brands in 2008 by The Asia Pacific Brands Foundation which
was under classification of The Best Brand in Manufacturing Rubber Glove. Also, Top
Glove had gotten Growth Excellent Award from Frost and Sullivan for its fantastic in
development in 2009.

Secondly, well diversified which means, the products are exported to 180
countries worldwide includes North America, Latin America, Asia, Middle East, Africa
and Europe. There are huge customers based, estimated 900 customers and high-quality
products and international accreditations. The Top Glove has gained its worldwide
accreditations such as US FDA, ISO 9001, US ADA and various European standards and
Germany’s TUV through its high-quality products which are disposable after use. The
reputation of Top Glove has been strengthening by those accreditations. This has helped
the company in winning new customers.

 Weakness

Thus, the weakness of the Top Glove company is currency exposure which
means the costs of productions are in MYR while the sales transactions are carried out

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 in USD. The USD is depreciating recently. On 5 October 2009, 1 USD is equal to
3.4746 MYR. Thus, the appreciating of MYR against USD had led to the fall in Top
Glove’s profit as the cost of production is higher while the return (sales price) is
lower.

 Opportunities

In addition, the opportunities of Top Glove Company are subsidies on natural

gas by government has reduce the cost of production which means the natural gas is
partly subsidised in Malaysia which help Top Glove benefit from obtaining lower heat
and energy costs than other regional players. Thus, gain support by government
agencies where the Rubber Research Institute and The Malaysian Rubber Export
Promotion Council help Top Glove in begin R&D efforts and promote the gloves
produce by Top Glove to overseas.

 Threats

In instance, increase in latex price which latex is the main material in

producing gloves. The price of one kilogram of latex is RM 7.75 in April 2010. The
increase in the latex will raise the manufacture costs. However, most of the
manufacture costs can be passed on to the customers. Secondly, Growth in the
demand for gloves may threatened as the diminishing threat of the COVID19. The
decrease in the spread of the COVID 19 will slow down the growth in the demand for
gloves. The demand for the gloves may “normalized” to the previous stage before the
epidemic of COVID19, for a long period of time.

4.0 Recommendation

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 As based on the analysis, in the statement of Top Glove shows that the company is
performing well financially. Thus, the company should overcome the currency exposure
which exchange rate risk cannot be avoided altogether when investing overseas, but it can be
mitigated considerably through the use of hedging techniques. The easiest solution is to
invest in hedged investments such as hedged ETFs. The fund manager of a hedged ETF can
hedge forex risk at a relatively lower cost. Secondly, to maintain the stability in the
management, the company should make sure the interactions between managerial and
representatives are in good.

Other than that, improve the company’s capacity which Top Glove’s rubber and latex
gloves manufacturing companies are in Malaysia and the competitors are also high. For
example, Hartalega is also one of the competitors of Top Glove company. So, the company
should improve the capacity when efficiently perform well in the glove industry.

Finally, having a good relationship with politics is main factor for make an efficient
business. thus, this is because when a good relationship with the government, there is no
politics pressure or issues will occur. Hence, since it’s a high demand products company, the
Top Gloves also make sure the representatives are not stressed out due to high demands. This
to make sure, employees able to work freely and comfort zone.

5.0 Conclusion

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 Based on this study about Top Glove Corporation Berhad analysis show that Top
Glove is good performance and efficiency of management and corporate governance.
Negative relationship between return on asset and leverage on average is prove in this
study using correlation analysis. It is favourable to have low risk and high return gain
from asset. Current ratio also has positive relationship with return on asset. It is proved
that liquidity and profitability have a positive relationship. Macroeconomics variables that
used are GDP, inflation rate, exchange rate and unemployment rate have weak
relationship with return on asset for Top Glove. It indicates that board of director and
management is efficient in mitigating and reducing risk of low return.
In conclusion, it has been presumed that on this task work, the firm is
exceptionally steady with the monetary limit. The firm requirements to keep a decent
benefit by selling the better-quality items that is elastic gloves among the clients in
Malaysia and outside domains of world. Besides, it has been likewise inferred that by
keeping a legitimate grasp in the market helps in trading of the items. The Top Gloves
firm has made a high creation line with the assistance of advance apparatus. Additionally,
the organization has likewise presented new innovation that helps in expanding the
benefit as contrasted and the other benchmark organization that is Kossan and Hartalega
in Malaysia.

6.0 Appendixes

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Annual report of Top Glove (2018-2019)

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15
7.0 References

Maher, M., & Andersson, T. (2000). Corporate governance: effects on firm performance
From.https://www.researchgate.net/publication/315834802_Corporate_Governance_Firm_Ri
sk_and_Performance_of_Top_Glove_Corporation_Berhad

Justin Lim. 28th September. ‘The Glove Company Chairman Tackling’, From.
http://www.topglove.com.my/news/2010/news_209.htm

Wikipedia. 14 October, 2009. ‘Top Glove Background’.

From.https://en.wikipedia.org/wiki/Top_Glove

Angelia Ruskin.2020. ‘Business Analysis Project’.

From.https://www.abcassignmenthelp.com/business-analysis-project-rubber-glove-
manufacturer-in-malaysia

Dr.Michael.2014. ‘ Graduate Way, Company Background.From

https://graduateway.com/top-glove-company-background

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