SCHOOL OF ECONOMICS, FINANCE AND BANKING (SEFB)

UNIVERSITI UTARA MALAYSIA (UUM)

Second Semester; 2020/2021 Academic Session

BWFF2033 Financial Management (Group AB)

Project Paper Report – Part I

Financial Performance for the Years 2015 to 2019 of [Land & General Berhad] Listed on the
[Real Estate] Sector in Malaysia

submitted to:
Dr. Muhammad Airil Syafiq Bin Mohd Khalid

by [274840] [Anjasmara Maulana Rizky Arya] from Project Group [AB02]

 I. Introduction
Land & General Berhad operates as an investment holding company. The company engages in
the renting of the assets, property development, and the cultivation of rubber and oil palm. The
property development project includes double-storey semi-detached houses, townhouses,
condominiums, apartments and commercial properties. The company also owns and leases the
World Trade Centre in Melbourne and the Plaza Putra in KL Land & General Berhad also
operates Sekolah Bestari, a private school in KL and L&G-Twintech Institute of Technology, a
private higher education institution in Kuching. The company was incorporated in 1964 and is
based in Kuala Lumpur (Reuters.com).

II. Ratios
At least 3 ratios dari setiap
a. Profitability (2015-2019):
- Operating profit margin = (operating profit : sales) x 100 (Thakur)

2015 2016 2017 2018 2019

operating profit 186,455 129,119 70,335 93,690 52,808
sales 465,790 342,062 42,650 98,018 134,435
40.0298 37.7472 164.9120 95.5844 39.2814

- Net Profit Margin = (net profit : sales) x 100

2015 2016 2017 2018 2019

net profit 143,414 91,592 51,558 74,906 48,955
sales 465,790 342,062 42,650 98,018 134,435
30.7894 26.7764 120.8862 76.4206 36.4153

- Return on Assets = (Net income : Total Assets) x 100

2015 2016 2017 2018 2019

Net income 143,414 91,592 51,558 74,906 48,955
Total Assets 1,002,715 1,091,069 1,108,455 1,552,913 1,545,902
14.3025 8.3947 4.6513 4.8235 3.1667
Average 7.0677
Changes 2015-2016= 2016-2017= 2017-2018= 2018-2019=
-5.9078 4.6513 4.8235 3.1667

Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets
(Hargrave, 2021). This ratio shows the efficiency of the company using its asset to generate
profit. Based on the above data, Land & General Berhad operates efficiently enough since the
average ROA is 7.07. During the period of 2015-2019, the most efficient operation is in 2015
with ROA of 14.3025% and the most inefficient is 2019 with its 3.17%.

b. Asset efficiency (2015-2019):

- Fixed Asset Turnover = Revenue : Total Fixed Assets (Thakur, Efficiency Ratio
Formula)

2015 2016 2017 2018 2019

Revenue 465,790 342,062 42,650 98,018 134,435
Total Fixed 204,666 212,940 364,497 837,764 908,910
Assets
 2.2758 0.1599 0.1170 0.1169 0.1479

- Asset Turnover Ratio = Revenue : Total Assets

2015 2016 2017 2018 2019

Revenue 465,790 342,062 42,650 98,018 134,435
Total Assets 1,002,715 1,091,069 1,108,455 1,552,913 1,545,902
0.4645 0.3135 0.0384 0.0631 0.0869

- Inventory turnover Ratio = (COGS : Inventory) x 100

2015 2016 2017 2018 2019

COGS 182,345 187,938 219,643 230,798 110,180
Inventory 31,061 46,391 43,483 39,732 302,553
587.0545 405.1173 505.1238 580.8869 36.4167
Average 422.9198
Changes 2015-2016= 2016-2017= 2017-2018= 2018-2019=
-181.9372 505.1238 580.8869 36.4167
Nb: I use Property Develompent expenditure as the COGS (ACCA, 2019), based on the
discussion on ACCA Global website about IAS 2.
Inventory turnover ratio indicates how fast a company sells its inventory (Fernando,
2021). A high inventory turnover ratio indicates that the company either has strong sales or
insufficient inventory. Based on the ITR average above, can be seen that the company may
have insufficient inventory since the ratio is so high which is more than 100%. If this is
continue, it can lead to lost business. Land & General Berhad has good ITR in 2019 with
36.42%.

c. Liquidity (2015-2019) :
- Current Ratio = Current Asset : Current Liability (Thakur, Accounting Liquidity)

2015 2016 2017 2018 2019

Current Asset 798,049 187,938 390,419 705,149 636,992
Current Liability 154,469 249,985 261,552 108,273 176,636
5.1664 0.7517 1.4927 6.5126 3.6062

- Quick Ratio = (Current Assets – inventories) : Current Liabilities

2015 2016 2017 2018 2019

Current Assets 798,049 187,938 390,419 705,149 636,992
Inventories 31,061 46,391 43,483 39,732 302,553
Current Liabilities 154,469 249,985 261,552 108,273 176,636

- Cash Ratio = (Cash + cash Equivalent) : Current Liability

2015 2016 2017 2018 2019

Cash + cash 398,343 525,906 390,419 385,422 218,912
Equivalent
Current Liability 154,469 249,985 261,552 108,273 176,636
2.5787 2.1037 1.4927 3.5597 1.2393
Average 2.19482
Changes 2015-2016= 2016-2017= 2017-2018= 2018-2019=
-0.475 -0.475 -0.475 -0.475
 Cash ratio shows the ability of the company to pay its short-term debt with cash or its
equivalent (Kenton, 2021). From the calculation above Land & General Berhad has more
than 1 cash ratio that indicates the company has enough cash to pay its short-term debt.

d. Financial leverage (2015-2019) :

- Debt Equity Ratio Formula = Total Debt : Total Equity (The FinAnalyst, 2021)

2015 2016 2017 2018 2019

Total Debt 310,860 389,298 435,588 426,417 176,636
Total Equity 691,855 701,771 672,867 1,126,496 1,174,715
0.4493 0.5675 0.6473 0.3785 0.1503

- Debt Capital Ratio Formula = Total Debt : (Total Equity + total debt)

2015 2016 2017 2018 2019

Total Debt 310,860 389,298 435,588 426,417 176,636
Total Equity 691,855 701,771 672,867 1,126,496 1,174,715
3.2256 2.8026 2.5447 3.6417 7.6504

- Debt-Asset Ratio Formula = Total Debt : Total Assets

2015 2016 2017 2018 2019

Total Debt 310,860 389,298 435,588 426,417 176,636
Total Assets 1,002,715 1,091,069 1,108,455 1,552,913 1,545,902
0.3100 0.3568 3.5447 4.64177 9.7519
Average 3.721034
Changes 2015-2016= 2016-2017= 2017-2018= 2018-2019=
0.0468 3.5447 4.64177 9.7519
Debt Asset Ratio indicates the portion of funding for the company’s assets (Hayes,
2021). A greater than 1 Debt Asset Ratio indicates that the company’s asset is highly
funded by the debt whereas the lower than 1 debt asset ratio indicates that a greater portion
of company’s asset is funded by the equity. This company has higher than 1 debt asset ratio
that may indicates that the assets are funded by the debt more than equity.

III. Conclusion
The ratio analysis of Land & General Berhad above telling that the performance of Land &
General Berhad is not really efficient from the low average of Return on Asset ratio. From the
inventory turnover ratio, we can also see that the company may has insufficient inventory to
create products since the ratio average is more than 100% high even in 2019 it has strong sales
which is good for the company. For cash ratio, the company has high cash and cash equivalent to
pay its short-term debt. The company’s assets, funded more by debt, because the debt asset ratio
is more than 1 which could indicates not really good since it need more debt than equity for the
company to have its asset.
IV. References

ACCA. (2019, January). Costing property development inventories. Retrieved from ACCA Global:
https://www.accaglobal.com/in/en/technical-activities/technical-resources-search/2019/january/
costing-property-development-inventories.html

Fernando, J. (2021, April 9). Inventory Turnover. Retrieved from Investopedia:

https://www.investopedia.com/terms/i/inventoryturnover.asp#:~:text=Inventory%20turnover
%20measures%20how%20fast,inventory%2C%20also%20known%20as
%20overstocking.&text=A%20high%20ratio%2C%20on%20the,strong%20sales%20or
%20insufficient%20inventory.

Hargrave, M. (2021, April 8). What is Return on Assets (ROA)? Retrieved from Investopedia:
https://www.investopedia.com/terms/r/returnonassets.asp#:~:text=Return%20on%20assets
%20(ROA)%20is,the%20ROA%20is%2C%20the%20better.

Hayes, A. (2021, April 12). Total-Debt-to-Total-Assets Ratio. Retrieved from Investopedia:

https://www.investopedia.com/terms/t/totaldebttototalassets.asp#:~:text=A%20ratio%20greater
%20than%201,rates%20were%20to%20rise%20suddenly.

Kenton, W. (2021, April 12). Cash Ratio. Retrieved from Investopedia:

https://www.investopedia.com/terms/c/cash-ratio.asp

Land & General Berhad . (2017, March 31). Annual Report 2017. Retrieved from Bursa Malaysia:
https://www.bursamalaysia.com/market_information/announcements/company_announcement/
announcement_details?ann_id=2778698

Land & General Berhad. (2015, March 31). Annual Report 2015. Retrieved from Bursa Malaysia:
https://www.bursamalaysia.com/market_information/announcements/company_announcement/
announcement_details?ann_id=2603621

Land & General Berhad. (2016). Annual Report 2016. Retrieved from Bursa Malaysia:
https://www.bursamalaysia.com/market_information/announcements/company_announcement/
announcement_details?ann_id=2689188

Land & General Berhad. (2018, March 31). Annual Report 2018. Retrieved from Bursa Malaysia:
https://www.bursamalaysia.com/market_information/announcements/company_announcement/
announcement_details?ann_id=2877028
Land & General Berhad. (2019). Annual Report 2019. Retrieved from Bursa Malaysia:
https://www.bursamalaysia.com/market_information/announcements/company_announcement/
announcement_details?ann_id=2974848

Reuters.com. (n.d.). Land & General Berhad. Retrieved from Reuters:

https://www.reuters.com/companies/LAND.KL

Thakur, M. (n.d.). Accounting Liquidity. Retrieved from WallStreetMojo:

https://www.wallstreetmojo.com/accounting-liquidity/

Thakur, M. (n.d.). Efficiency Ratio Formula. Retrieved from EDUCBA:

https://www.educba.com/efficiency-ratio-formula/

Thakur, M. (n.d.). Profitability Ratios Formula. Retrieved from EDUCBA:

https://www.educba.com/profitability-ratios-formula/

The FinAnalyst. (2021, January 27). What is Leverage Ratio? Retrieved from The FinAnalyst:
https://thefinanalyst.com/what-is-the-leverage-ratio/

V. APPENDIX
Figure 1 Income Statement 2015
Figure 2 Statement of Financial Position 2015
Figure 3 Income Statement 2016
Figure 4 Statement of financial Position 2016
Figure 5 Income Statement 2017
Figure 6 Statement of Financial Position 2017
Figure 7 Income Statement 2018
Figure 8 Statement of financial Position 2018
Figure 9 Income Statement 2019
Figure 10 Statement of Financial Position 2019