Questions for KFB and DXY:

A) Based on the Balance Sheet & Income Statement of KFB and DXY, please provide ratios analysis of the

Ratios Used To Assess Performance

1) Gross Profit Margin

2) Net Profit Margin
3) Expenses over sales ratio
4) Asset Turnover ratio
5) Return On Assets (ROA)
6) Return On Equity (ROE)

Ratios Used To Assess Operating Efficiency

1) Trade receivables' turnover period

2) Inventorys' turnover period
3) Trade payables' turnover period

Ratios Used To Assess Financial Stability

1) Current ratio
2) Debt to assets ratio
3) Debt to equity ratio

B) Based on the ratios analysis above, answer the following questions:

1. Why did the Gross Profit Margin for both KFB Group and DXY Group increase between 2007 and 2008
2. What factors contributed to the increase in the Net Profit Margin for both companies?
3. Why did the Expenses over Sales Ratio decrease for DXY Group while it increased for KFB Group?
4. What factors could have led to the different trends in Asset Turnover Ratios for both companies?
5. How can the different trends in Return on Assets (ROA) for both companies be explained?
6. What factors contributed to the increase in Return on Equity (ROE) for both companies?
7. How can the differences in the trade receivables, inventory, and trade payables turnover periods betw
8. Why did the Current Ratio decrease for KFB Group while it remained relatively stable for DXY Group?
9. What factors could have contributed to the similar trends in Debt to Assets ratio for both companies?
10. How can the different trends in Debt to Equity ratio for both companies be explained?
provide ratios analysis of the following

ease between 2007 and 2008?

th companies?
ncreased for KFB Group?
tios for both companies?
nies be explained?
oth companies?
ayables turnover periods between the two companies be explained?
atively stable for DXY Group?
ets ratio for both companies?
s be explained?
Analysis on KFB Group Balance Sheet as at 31 March 2008

KFB GRP KFB GRP

FY2008 FY2007
    Property plant and equipment 153,208 114,435
    Investment Properties 73,046 72,751
    Prepaid Land Lease Payments 50,746 51,257
    Goodwill 12,650 10,069
Biological assets 79,815 4,085
    Interest in Associates 34,270 73,498
    Other Investment - 22
    Deferred Tax Assets 1,660 3,470
    Total Non Current Assets 405,395 329,587

Inventories 60,844 53,818

    Trade Receivables 82,889 52,785
    Other Receivables 14,612 20,469
    Cash and Bank Balances 45,430 57,874
    Total Current Assets 203,775 184,946

    Total Assets 609,170 514,533

    SHARE CAPITAL 263,160 263,160

    Reserve 36,238 22,658
    Sub total equity 299,398 285,818
    Minority interests 110,252 78,973
    Total Equity 409,650 364,791

    Long term borrowings 35,880 34,127

    Retirement benefit obligations 3,031 2,626
    Deferred tax liabilities 16,263 18,215
    Total Non Current Liabilities 55,174 54,968

    Borrowing Short Term 55,055 24,341

    Trade Payables 51,126 41,478
    Other Payables 35,601 25,515
    Taxation 2,564 3,440
    Total Current Liabilities 144,346 94,774

    Total Liabilities 199,520 149,742

    Total Equity and Liabilities 609,170 514,533

Analysis on KFB Group Income Statements as at 31 March 2008

KFB GRP KFB GRP

FY2008 FY2007
    Revenue 308,712 294,477
    Cost of Sales (199,013) (194,531)
    Gross Profit 109,699 99,946
GP Margin 36% 34%

    Other Income 5,046 3,609

    Administrave Expenses (39,617) (37,278)
    Selling and Distribution (4,777) (4,955)
    Other Expenses (15,072) (6,407)
    Finance Cost (3,828) (3,469)
    Total Share of Net Profit - Associate 5,411 (57)
    Profit before tax 56,862 51,389
    Taxation (13,588) (10,740)
    Profit for the period 43,274 40,649

Note:
 FORMULA KFB (GRP)
Ratios Used To Assess Performance

1) Gross Profit Margin 36%

2) Net Profit Margin
3) Expenses over sales ratio
4) Asset Turnover ratio
5) Return On Assets (ROA)
6) Return On Equity (ROE)

Ratios Used To Assess Operating Efficiency

1) Trade receivables' turnover period

2) Inventorys' turnover period
3) Trade payables' turnover period

Ratios Used To Assess Financial Stability

1) Current ratio
2) Debt to assets ratio
3) Debt to equity ratio
DXY (GRP)
Analysis on DXY Group Balance Sheet as at 31 March 2008

DXY GRP DXY GRP

FY2008 FY2007
    Property plant and equipment 461,399 455,826
    Investment Properties 67,921 50,980
    Goodwill 12,650 10,069
Biological assets 98,324 67,890
    Interest in Associates 67,890 55,437
    Deferred Tax Assets 8,990 7,654
    Total Non Current Assets 717,174 647,856

Inventories 78,912 67,453

    Trade Receivables 75,432 66,875
    Other Receivables 88,342 90,344
    Cash and Bank Balances 68,987 77,865
    Total Current Assets 311,673 302,537

    Total Assets 1,028,847 950,393

    SHARE CAPITAL 450,680 450,680

    Reserve 56,780 44,890
    Sub total equity 507,460 495,570
    Minority interests 138,920 98,760
    Total Equity 646,380 594,330

    Long term borrowings 88,768 98,650

    Retirement benefit obligations 42,980 39,770
    Deferred tax liabilities 65,230 55,879
    Total Non Current Liabilities 196,978 194,299

    Borrowing Short Term 78,560 68,980

    Trade Payables 43,258 40,560
    Other Payables 55,986 45,678
    Taxation 7,685 6,546
    Total Current Liabilities 185,489 161,764

    Total Liabilities 382,467 356,063

    Total Equity and Liabilities 1,028,847 950,393

Analysis on DXY Group Income Statements as at 31 March 2008

DXY GRP DXY GRP

FY2008 FY2007
    Revenue 867,980 665,987
    Cost of Sales (488,866) (386,789)
    Gross Profit 379,114 279,198

    Other Income 6,789 8,765

    Administrave Expenses (87,678) (77,889)
    Selling and Distribution (15,678) (12,345)
    Other Expenses (34,569) (25,645)
    Finance Cost (7,896) (6,765)
    Total Share of Net Profit - Associate 6,573 4,568
    Profit before tax 246,655 169,887
    Taxation (56,780) (40,987)
    Profit for the period 189,875 128,900

    Minority Interests 12,987 10,989

    Equity holders of the parent 30,287 29,660
43,274 40,649