UNIVERSITI TEKNOLOGI MARA, SUNGAI PETANI, KEDAH.

FACULTY OF BUSINESS AND MANAGEMENT

PROGRAMME: DIPLOMA IN BANKING (BA119)

GROUP: KBA 119 3A
CODE: FIN242 ( FUNDAMENTALS OF FINANCE)

PREPARED BY:

NAMA NO MATRIC
MOHAMMAD SYAHRIZAN BIN RUBIN 2021108877
MUHAMMAD SYAZWAN BIN HAMDAN 2021123137
AMSYAR HADIF BIN AHMAD 2021107669
MUHAMAD HAZIQ HAIKAL BIN ABDULLAH 2021111851
ALI AL-UZZAM IRFAN ALI AL-IMRAN 2021108667

PREPARED FOR: DR. YANTI ASPHA AMEIRA BINTI MUSTAPHA

DATE OF SUBMISSION: 18 JULY 2022

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 TABLE OF CONTENT

CONTENT PAGES

Company Background 3

Discussion Of Meeting 4&5

Income Statement & Balance Sheet 6&7

Ratio Analysis 8 - 22

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COMPANY BACKGROUND

Saudee Group Berhad was founded in 1985. The Saudee Group's products, sold under
the labels Saudi Gold and Farm's Gold, that contain the highest quality ingredients to satisfy
the most discerning tastebuds. Saudee products address the rising need for simple, high-
quality foods that are quick and easy to make, have strong nutritional content, and are
reasonably priced.

Saudee Group Berhad is a Malaysian investment holding company that manufactures

and sells frozen foods. The company specialises in the production of frozen processed food
items such as burger patties, nuggets, sausages, meat balls, and many more. Saudi Gold and
Farm's Gold, its major brands, have retail stores across Malaysia. Bratwursts, sausages,
nuggets, burger patties, meat balls, fried chicken, minced meat, and pastry are among the
Saudi Gold product lines. Farm's Gold offers frankfurters, nuggets, meat balls, and burgers.
Saudi Cold Storage Sdn. Bhd. is a wholesaler and distributor of fresh and frozen foods, and
Perusahaan Saudee Sdn. Bhd. is a manufacturer and distributor of processed chicken, beef
products, frozen meals, and bakery items. The logo below with the waiter serving on platter
signifies that Saudee only serves consumers the best in quality food.

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DICUSSION OF THE MEETING

This discussion will go through our company plans to apply for a bank loan in order
to invest in our projects. A company obtains a commercial bank loan with the hope of
increasing its profits by using the bank loans. Other than banks, credit unions, public funds,
and private investors can make loans, and small businesses can utilise inventory or accounts
receivable as protection. Borrowing money can be highly expensive depending on where and
how the loan originated, as interest and fees are linked with practically every loan. Before
accepting a loan, businesses may and should determine the amount of interest that will be
paid during the period of the loan.

The first reason our company applied for a loan was to purchase an asset. Growing a
firm and increasing sales frequently involves the purchase of assets such as new machinery or
vehicles. We will seek loans to support the purchase of new assets to enable our firm to
develop if we have enough cash to pay the company's working capital requirements. Asset
financing loans are the best way to spread the cost of acquiring expensive new assets.
Monthly repayments and fixed loan periods from 6 months to 5 years can help us plan our
cash flow in advance so that we can take full advantage of our company’s opportunities to
grow.

Asset purchase loans can be used to purchase different things for our business,
depending on the things we need to meet our expansion plans. The funds can be used for
business vehicles, whether we want to purchase our company’s first vehicle or want to
increase capacity by adding to our company’s existing fleet. In addition, our company will
also use loans to purchase office and IT equipment to ensure our staff have everything they
need to grow the business, or new machinery to allow us to make new products or increase
production while spreading costs instead of paying large sums in front.

Next reason is to get working capital. Adequate working capital is an important aspect
of every company's financial stability. Limited operating capital can have a major influence
on a company's future. Our company decided to seek outside funding in order to generate
enough operating cash to achieve our company's growth goals. Loans can bridge the gap
between customer orders and supplier payments to assist our firm fulfil financial
requirements, or they can cover short-term financing needs while giving the business the
money it needs to grow.

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 Working capital financing can also allow our company to take advantage of new
opportunities that arise, invest in new products or services to enable our company to grow.
Our company will also know our daily operating costs are covered by the loan. Therefore, we
will have funds available to cover any unforeseen costs.

Finally, the Saudee Group will continue to improve operational efficiencies with
effective resource planning, adopting lean concepts for operational workflows as well as
empowering employees especially management to implement ideas for better production cost
control. Going forward, with bank loans and production capacity expansion plans, our
company anticipates an increase in revenue and better performance in the coming year. Our
Company will also continue to strengthen its financial performance to maintain current
momentum with a view to further improving the cash flow it generates.

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RATIO ANALYSIS

LIQUIDITIY RATIOS

 CURRENT RATIO IN 2021

Current Ratio = Current Assets

Current Liabilities

= RM 107,258,299

RM 14,886,465

= 7.205

 CURRENT RATIO IN 2020

Current Ratio = Current Assets

Current Liabilities

= RM 34,952,059

RM 38,422,461

= 0.910

Current ratio for SAUDEE Company in 2021 is 7.205 times better than 2020, 0.910 times.
SAUDEE Company have good ability to pay short term liability in 2021 compared to in
2020.

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  QUICK RATIO IN 2021

Quick Ratio = Current Assets – Inventory – Prepayment

Current Liabilities

= RM 107,258,299 – RM 11,265,548 – RM 1,423,411

RM 14,886,465

= 6.353

 QUICK RATIO IN 2020

Quick Ratio = Current Assets – Inventory – Prepayment

Current Liabilities

= RM 34,952,059 – RM 10,628,129 – RM 2,083,809

RM 38,422,461

= 0.579

Quick ratio for SAUDEE Company in 2021 is 6.448 times better than 2020, 0.6331times. So,
its show in 2021 a SAUDEE Company have ability to pay short term obligation without
relying on inventory and prepaid expenses.

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  NET WORKING CAPITAL IN 2021

Net Working Capital = Current Assets – Current Liabilities

= RM 107,258,299 – RM 14,886,465

= RM 92,371,834

 NET WORKING CAPITAL IN 2020

Net Working Capital = Current Assets – Current Liabilities

= RM 34,952,059 – RM 38,422,461

= RM (3,470,402)

Net working capital for SAUDEE Company in 2021 is RM 92,371,834 better than 2020, RM
(3,470,402). So, it’s that show in 2021 the liquidity of the company is in good condition.

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ACTIVITY RATIO

 INVENTORY TURNOVER RATIO IN 2021

Inventory Turnover = Cost of goods sold

Inventory
= RM (71,419,113)
RM 11,265,548

= (6.34 times)

 INVENTORY TURNOVER RATIO IN 2020

Inventory Turnover = Cost of goods sold

Inventory
= RM (91,007,195)
RM 10,628,129
= (8.56 times)

Inventory turnover for SAUDEE Company in 2021 is (6.34 times) better than total of 2021,
(8.56 times). Its show in 2021 a company effectiveness of inventory to generate sales.

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  AVERAGE COLLECTION PERIOD IN 2021

Average collection period = Account receivable(360)

Sales
= RM 12,778,543 (360)
RM 80,778,690
= 57 days

 AVERAGE COLLECTION PERIOD IN 2020

Average collection period = Account receivable(360)

Sales
= RM 14,531,955 (360)
RM 78,511,104
= 67 days

Average collection period for SAUDEE Company in 2021 is 57 days better than 2020, 67
days. Its show the company in 2021 has no problem in collecting debt.

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  FIXED ASSET TURNOVER IN 2021
Fixed Asset Turnover = Sales

Net fixed asset

= RM 80,778,690
RM 550,000
= 146.87 times

 FIXED ASSET TURNOVER IN 2020

Fixed Asset Turnover = Sales

Net fixed asset

= RM 78,511,104
RM 550,000
= 142.75 times

Fixed asset turnover for SAUDEE Company is at 2021, 146.87 times while 2020, 142.75. It
show the company have more revenue that can be generate per ringgit in investment in fixed
asset.

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  TOTAL ASSET TURNOVER IN 2021

Total Asset Turnover = Sales

Total assets
= RM 80,778,690
RM 141,319,044
= 0.57 times

 TOTAL ASSET TURNOVER IN 2020

Total Asset Turnover = Sales

Total assets
= RM 78,511,104
RM 75,528,360

= 1.04 times

Total asset turnover for SAUDEE Company in 2021 is 0.57 times lower than 2020, 1.04
times. It show in 2021 a company has ineffectiveness of total assets to generate sales.

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LEVERANGE RATIO

 DEBT RATIO IN 2021

Debt Ratio = Total Debt

Total Asset

= RM 14,886,465 + RM 1,386,778

RM 141,319,044

= 11.52%

 DEBT RATIO IN 2020

Debt Ratio = Total Debt

Total Asset

= RM 38,422,461+ RM 8,058,278

RM 75,528,360

= 61.54%

Debt ratio for SAUDEE Company in 2021 is 11.52% better than 2020, 61.54%. It show in
2021, SAUDEE Company has less amount of debt in financing assets. Besides that, the
company have ability to pay back is because the debt is lower.

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 DEBT TO EQUITY IN 2021

Debt Ratio = Long Term Debt

Total Equity

= RM 1,386,778

RM 125,045,801

= 0.0111

 DEBT TO EQUITY IN 2020

Debt Ratio = Long Term Debt

Total Equity

= RM 8,058,278

RM 29,047,621

= 0.2774

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  TIME INTEREST EARNED IN 2021

Time Interest Earned = Earnings Before Interest Taxes

Interest

= RM 9,359,577

RM (1,294,117)

= (7.23 times)

 TIME INTEREST EARNED IN 2020

Time Interest Earned = Earnings Before Interest Taxes

Interest

= RM (12,566,091)

RM (1,632,335)

= 7.7 times

Time interest earned for SAUDEE Company in 2021 is (7.23) less than 2020, 7.7 times. It
show in 2021 a company has worst of time interest earned.

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PROFITABILTY RATIO

 GROSS PROFIT MARGIN IN 2021

Gross Profit Margin = Gross Profit

Sales

= RM 9,359,557

RM 80,778,690

= 11.59%

 GROSS PROFIT MARGIN IN 2020

Gross Profit Margin = Gross Profit

Sales

= RM (12,566,091)

RM 78,511,104

= (16.01%)

Gross profit margin for SAUDEE Company in 2021 is 11.59% better than 2020,
(16.01%). It show in 2021 the company has higher in contribution gross profit.

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  OPERATING PROFIT MARGIN IN 2021

Operating Profit Margin = Earnings Before Interest Taxes

Sales

= RM (4,464,911)

RM 80,778,690

= (5.53%)

 OPERATING PROFIT MARGIN IN 2020

Operating Profit Margin = Earnings Before Interest Taxes

Sales

= RM (28,006,553)

RM 78,511,104

= (35.67%)

Operating profit margin for SAUDEE Company in 2021 is (5.53%) better than 2020,
(35.67%). It show in 2021 a company has higher of productivity.

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  NET PROFIT MARGIN IN 2021

Net Profit Margin = Earnings After Taxes

Sales

= RM (4,372,939)

RM 80,778,690

= (5.41%)

 NET PROFIT MARGIN IN 2020

Net Profit Margin = Earnings After Taxes

Sales

= RM (30,611,083)

RM 78,511,104

= (39%)

Net profit margin for SAUDEE Company in 2021 is (5.41%) better than 2021,(39%) It show
in 2021 the company has higher return on shareholder.

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  RETURN ASSET IN 2021

Net Profit Margin = Earnings After Taxes

Total Asset

= RM (4,372,939)

RM 141,319,044

= (3.09%)

 RETURN ASSET IN 2020

Net Profit Margin = Earnings After Taxes

Total Asset

= RM (30,611,083)

RM 75,528,360

= (40.53%)

Return on asset for SAUDEE Company in 2021 is (3.09%) better than 2020, (40.53%). It
show in 2021 a company has higher return on firm’s investment of asset.

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  RETURN ON COMMON EQUITY IN 2021

Net Profit Margin = Earnings After Taxes

Total Equity

= RM (4,372,939)

RM 125,045,801

= (3.50%)

 RETURN ON COMMON EQUITY IN 2020

Net Profit Margin = Earnings After Taxes

Total Equity

= RM (30,611,083)

RM 29,047,621

= (105.38%)

Return on equity for SAUDEE Company in 2021 (3.50%) better than 2020, (105.38%). It
show in 2021 a company has higher return to shareholder.

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