GROUP PROJECT

FINANCIAL STATEMENT ANALYSIS (FAR670)

VS

NURUL NADIA BINTI MUHAMAD (2018226198)

NURUL ZAHIRAH BINTI AZEMI (2018802044)
SITI NUR AYUNIE BINTI ZAWAWI (2018659888)
SITI SALIHAH BINTI AHMAD NAZLI (2018660028)

D1AC2208C
PRESENTED TO: MADAM NORAIDA BINTI SAIDI
BACKGROUND

7-Eleven Malaysia Holdings Berhad and myNEWS

Holdings Berhad are two listed convenience store chain
operators listed on the Malaysian stock exchange

The first 7-Eleven store in Malaysia opened on 9 October

1984 in Jalan Bukit Bintang, Kuala Lumpur and it is still in
operation today

Over its 28 years of trading history, 7-Eleven Malaysia

has grown to become the single largest convenience
store chain in Malaysia with more than 2,240 stores
nationwide
BACKGROUND

myNEWS is the largest homegrown convenience store

operator with over 450 stores in Malaysia.

As a locally established operator, myNEWS has full

autonomy over its brand and trade names.

Founded by Dang Tai Luk and the first flagship store

opened on 25 December 1996.

Since the company’s inception in December 1996,

myNEWS has evolved from a single newsstand of 200 sqft
to the largest homegrown retail convenience store chain
 7-ELEVEN
Strengths Weaknesses
Wonderful and great Unable to meet the
perfomance in new challenges posed by
markets
High skilled workforce
S W new entrants
Lack of investment in
new technologies

Threats
Opportunities
More convenient stores
Pricing strategies

O T
open nearby
Increase in e-wallet
Government implement
payment
soda tax to combat the
Customer demand for
rising prevalence of
ready-to-eat
obesity and diabetes
 myNEWS Holdings Berhad
SWOT Analysis

Strengths Weaknesses
Additional cost for building
Success of new product mix
new supply chain and logistics
Well-known brands
network
Business model

Threats Opportunities
Commoditization of the Pressure from the competition
product segment that cause Opportunities in Online Space
unexpected slowdown in
Chances to grow
consumer spending and
increasingly competitive
industry landscape.
VERTICAL & HORIZONTAL ANALYSIS
VERTICAL ANALYSIS
Statement of Comprehensive Income
7-Eleven Malaysia Holding Berhad
NOTES:
The cost of sales in year 2020
increased to 71.57% and then in 2021
the percentage increased to 72.98%.
The gross profit reduce from 31.36%
in 2019 to 27.02% in 2021 because the
rise of cost of sales.
The selling and distribution expenses
decreasing gradually from 2019 to
2022.
VERTICAL ANALYSIS
Statement of Comprehensive Income
myNEWS Holding Berhad
NOTES:
The cost of sales for 2019 to 2020
were increasing from 64.11% to
67.35% and also increased by 2.11%
by 67.35% to 69.46% in 2021.
The gross profit decreased gradually
from 2019 to 2021 because the
percentage cost of sale increasing.
Selling and distribution expenses
percentage increased materially in
2019 to 2021 from 16.36% to 21.64%.
VERTICAL ANALYSIS
Statement of Financial Position
7-Eleven Malaysia Holding Berhad
NOTES:
There are slightly decrease in
percentage of PPE from 2019 till 2021.
In 2020, the percentage of inventories
decrease from 16.27% to 14.19% and
increasing to 16.97% in 2021.
For borrowing there are significant
increase in 2020 by 17.68% as
compared to 2019 by 1.91%. There
percentage rise to 26.69% in 2021.
VERTICAL ANALYSIS
Statement of Financial Position
myNEWS Holding Berhad
NOTES:
For PPE, there is decrease significantly
in percentage from 2019 to 2020. In
2021, the percentage of PPE arise from
39.76% to 41.25%.
For inventories, the percentage
decreased from 12.91% in 2019 to
12.66% in 2020 and 11.73% in 2021.
Bank borrowing increase moderately
from 8.44% in 2019 to 20.29% in
2020. However, in 2021 bank
borrowing reduced to 17.84%.
HORIZONTAL ANALYSIS
Statement of Comprehensive Income
7-Eleven Malaysia Holding Berhad
NOTES:
The revenue increased in 2020 by
7.54% and 2021 by 10.61%.
Other operating income increase
respectively for 2020 and 2021 by
17.53% and 2.79%.
The finance cost increase in 2020 and
2021 by 24.45% and 13.24%.
HORIZONTAL ANALYSIS
Statement of Comprehensive Income
myNEWS Holding Berhad
NOTES:
The revenue for financial year 2020
decreases by 5.47% and for 2021 by
19.42%.
Other operating income show increase
for 2020 and 2021 by 451.64% and
81.79%.
The increase in finance cost for
financial year 2020 is 50.33% and for
financial year 2021 is 22.69%.
HORIZONTAL ANALYSIS
Statement of Financial Position
7-Eleven Malaysia Holding Berhad
NOTES:
The intangible asset increases in 2020
by 1,347.74% and in 2021 by 12.56%.
The cash and other bank balances in
2020 increase by 40.30% and in 2021
by 17.61%.
The borrowing shows significant
increase by 1,216.31% in the year
2020 and 67.42% in financial year
2021.
HORIZONTAL ANALYSIS
Statement of Financial Position
myNEWS Holding Berhad
NOTES:
Other investment in 2020 shows a
decrease by -73.15% and in 2021 by
-96.42%.
The cash and bank balances for financial
year 2020 shows an increase for 184.44%.
In 2021, the cash and bank balance show a
decrease by -60.75%.
There is an increase in bank borrowings
for 225.59% meanwhile there is reduction
on 2021 for 7.38%.
FINANCIAL RATIO ANALYSIS
 FINANCIAL STATEMENT ANALYSIS

RATIO ANALYSIS
LEVERAGE RATIO PROFITABILITY RATIO

01 1- Total Debt to 03 1- Net Profit Margin 05

Equity Ratio 2- Total Asset Turnover
2- Times Interest 3- Return on Total
Earned Equity

EFFICIENCY RATIO
LIQUIDITY RATIO VALUATION RATIO
1- Inventory Turnover
1- Current Ratio 02 Ratio
04
1- Earning Per Share
2. Quick Ratio 2- Account Receivable 2- Dividend Per
Turnover Share
3- Average Collection
Period

 FINANCIAL STATEMENT ANALYSIS

01
LIQUIDITY RATIOS CURRENT RATIO

NOTES:

A higher current ratio is always more

favorable than a lower current ratio
because it shows the company can
more easily make current debt
payments.
 FINANCIAL STATEMENT ANALYSIS
01
LIQUIDITY RATIOS QUICK RATIO

NOTES:

- A company with a quick ratio of 1

indicates that quick assets equal
current assets.
- Higher quick ratio shows that the
company could pay off its current
liabilities without selling any long-
term assets.
 FINANCIAL STATEMENT ANALYSIS
02
LEVERAGE RATIOS DEBT RATIO

A lower debt ratio usually

implies a more stable business
with the potential of longevity
because a company with lower
ratio also has lower overall debt.

''THE LOWER THE BETTER''

- The companies shouldn’t have a
problem getting approved for
their loan.
 FINANCIAL STATEMENT ANALYSIS
02
LEVERAGE RATIOS TIMES INTEREST EARNED

The ratio indicates how many

times a company could pay the
interest with its before tax
income

HIGHER TIME INTEREST

EARNED IS BETTER ???

creditors would favor a company with

a much higher times interest ratio
because it shows the company can
afford to pay its interest payments
when they come due. Higher ratios
are less risky while lower ratios
indicate credit risK
 FINANCIAL STATEMENT ANALYSIS
03
EFFICIENCY RATIO INVENTORY TURNOVER

Inventory Turnover : Shows how effectively inventory is managed by comparing cost of goods sold with
average inventory for a period.

As a recommended for both company is to improve its demand, availability to the customers, marketing,
and better order management in ensuring their products sell fast.
 FINANCIAL STATEMENT ANALYSIS
03 ACCOUNT RECEIVABLE TURNOVER
EFFICIENCY RATIO aVERAGE COLLECTION PERIOD

This ratio shows how efficient a company is at collecting its credit sales from customers.This ratio shows
how efficient a company is at collecting its credit sales from customers.

This indicates that both companies are not efficient in collecting debts from debtors and not liquid in
turning its receivable into cash as it takes more.
 FINANCIAL STATEMENT ANALYSIS
04
PROFITABILITY RATIO NET PROFIT MARGIN

Net profit margin is the net profit to

revenue for a company as it
indicates how much of each RM 1
collected by the company as
revenues translates to profit.

Helps investors to assess the

company’s management in order to
make sure the operating costs and
overhead costs are being contained.

A good margin will vary considerably by

industry, but as a general rule of thumb,
a 10% net profit margin is considered
average, a 20% margin is considered
high (or “good”), and a 5% margin is low.
 FINANCIAL STATEMENT ANALYSIS
04
PROFITABILITY RATIO TOTAL ASSET TURNOVER

Measures how efficiently a firm uses its

assets to generate sales, so a higher ratio
is always more favorable. Higher turnover
ratios mean the company is using its
assets more efficiently.

Lower ratios mean that the company isn’t

using its assets efficiently and most likely
have management or production problems.
 FINANCIAL STATEMENT ANALYSIS
04
PROFITABILITY RATIO RETURN ON TOTAL EQUITY

Return on equity (ROE) is a

measure of financial performance
calculated by dividing net income
by shareholders' equity.

Because shareholders' equity is

equal to a company’s assets minus
its debt, ROE is considered the
return on net assets.

The higher the ROE, the more

efficient a company's
management is at generating
income and growth from its
equity financing.
 FINANCIAL STATEMENT ANALYSIS
05
VALUATION RATIOS EARNING PER SHARE

NOTES:

Sometimes called market value ratios, are

measurements of how appropriately shares
in a company are valued and what type of
return an investor may get.
By calculating the market value a potential
investor can see if the shares are
overvalued, undervalued, or at a fair price.
It also helps determine how much a
potential investor should buy.
 FINANCIAL STATEMENT ANALYSIS
05
VALUATION RATIOS DIVIDEND PER SHARE

Dividend per share (DPS) is the sum of

declared dividends issued by a company
for every ordinary share outstanding.

The figure is calculated by dividing the

total dividends paid out by a business,
including interim dividends, over a
period of time, usually a year, by the
number of outstanding ordinary shares
issued.
 EVALUATION COMPANY’S : STRENGTH

7-ELEVEN vs MYNEWS
Single largest convenience store Largest home-grown
chain in Malaysia and has a strong convenience store and well-
brand portfolio established brand name

7-Eleven overall has over 2,400 outlets MyNews has more than 450,
around Malaysia with the majority of them located
in the urban areas of Peninsular
Malaysia

STRENGTH: 7-Eleven is more well-

established than MyNews
 EVALUATION COMPANY’S : WEAKNESS

7-ELEVEN vs MYNEWS
Lack on product marketing Have a small number of

Unclear unique selling proposition Franchises mostly in Selangor,

that makes them doesn't stand out Kuala Lumpur, Johor, Perak and
among rivals Pulau Pinang

WEAKNESS: Even though 7-Eleven doesnt stand out among rivals, 7-Eleven still
has customers in rural areas. This made People in East Coast areas like Kelantan
and Terengganu not aware of myNEWS existence
 Conclusion
In a nutshell, the financial statement analysis is a way
to calculate the number of ratios on a company’s
income statement to determine how efficiently it
generates profits and shareholder value.

7-Eleven Malaysia Holdings Berhad and MyNews

Holdings Berhad, both of them showed a very strong
financial performance during those three years. Both
companies are strong and powerful in their own way.
Hence, the investors need to know what they expect
to gain from; the company so that they can make the
decision to invest in either company.
 REFERENCES
WEBSITES :-
7-Eleven Malaysia Holding Bhd. (2022). 2019-
2021 7-Eleven Malaysia Holding Bhd. Annual
01 Report. Retrieved from
https://iide.co/case-studies/swot-
https://www.7eleven.com.my/archive-annual-
reports.php 04 analysis-of-7-eleven/#1_Strengths_of_7-
https://www.youtube.com/wat ELEVEN
ch?v=giZrHWjKAUY&t=455s
02
http://www.insage.com.my/ir/cmn/t
05 rps02/ar.aspx?Symbol=5275
Pro, E. (n.d.). [2022] myNEWS SWOT
Analysis / Matrix. Embapro.Com.
03
https://embapro.com/frontpage/sw
otcoanalysis/20426-mynews