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]

 SCHOOL OF ECONOMICS, FINANCE AND BANKING (SEFB)
UNIVERSITI UTARA MALAYSIA (UUM)

Land & General Berhad

Land & General Berhad operates as an investment holding company. The company engages in
the renting of the assets. The other activities include 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).

I. Profitability Ratio Analysis of Land & General Berhad

Return on Asset : Net Income/Average Total Asset (D'Angelo, 2020)

Year 2015 2016 2017 2018 2019
Net income 143,414 91,592 51,558 69,056 48,955
Total Asset 1,008,101 1,125,876 1,108,455 1,544,418 1,545,902
ROA 0.142261539 0.081351765 0.04651339 0.044713284 0.031667596
Average
0.069301515        
ROA
Return on Equity : Net Income/Average Stockholde Equity (D'Angelo, 2020)
Year 2015 2016 2017 2018 2019
Net income 143,414 91,592 51,558 69,056 48,955
Total
Stockholder 624,843 701,771 972,867 1,125,551 1,174,715
Equity
ROA 0.229520055 0.13051551 0.052995939 0.061353062 0.041673938
Profit Margin : Net Income/Sales (D'Angelo, 2020)
Year 2015 2016 2017 2018 2019
Net income 143,414 91,592 51,558 69,056 48,955
Sales 465,790 342,062 47,193 92,930 134,435
Profit
0.307894115 0.267764323 1.092492531 0.743096955 0.36415368
Margin
The trend shows that the ratio of Return on Asset is positive until year 2019 and the highest is
 SCHOOL OF ECONOMICS, FINANCE AND BANKING (SEFB)
UNIVERSITI UTARA MALAYSIA (UUM)
in 2015. The company most effectively manages their assets in 2015 and in the following year,
may be the company face various factor that is affected them to achieve the return rate.

II. Asset Efficiency Ratio Analysis

Inventory turnover ratio : COGS/Average Inventory

Year 2015 2016 2017 2018 2019
COGS 257,733 189,673 29,733 62,039 97,843
Average
19,944 38,726 44,937 41,608 271,067
Inventory
Inventory
12.92283394 4.897820586 0.661659657 1.491053296 0.360955041
Turnover Ratio
Average ITR 4.066864503        

Asset Turnover Ratio = Net Sales/Average Total Asset

Year 2015 2016 2017 2018 2019
Net Sales 186,455 129,119 70,335 88,175 52,808
Average Total
872,523 1,046,892 1,117,166 1,330,684 1,545,160
Assets
Asset Turnover
0.213696495 0.123335549 0.062958443 0.066262914 0.034176396
Ratio
         

Days' sales in Inventory = Inventory/COGS

Year 2015 2016 2017 2018 2019
Inventory 31,061 46,391 43,483 239,581 302,553
COGS 257,733 189,673 29,733 62,039 97,843
Days' sales in
0.120516193 0.2445841 1.462449131 3.861780493 3.092229388
Inventory

Days’ sales of inventory ratio used to evaluate how many days the company would take to sell
all of its inventory and it also to determine how many days the current stock will last. Investors
would use this information to evaluate how valuable of this company inventory. Based on the
 SCHOOL OF ECONOMICS, FINANCE AND BANKING (SEFB)
UNIVERSITI UTARA MALAYSIA (UUM)
calculation of Days’ sales in Inventory, the company needs not more than 5 days to sell their
assets (Nickolas, 2019). This means their asset is still efficient since the inventory becomes
finish products and will be sell in not more than a month and the quality will be the same.

III. Leverage Ratio Analysis

Debt to Asset Ratio = Total Debt/Total Asset

Year 2015 2016 2017 2018 2019
Total Debt 310,860 389,298 435,588 426,417 371,187
Total Asset 1,008,101 1,125,876 1,108,455 1,544,418 1,545,902
Debt to Total
0.30836196 0.345773424 0.392968591 0.276102066 0.240110305
Asset Ratio
Average DTA
0.312663269        
Ratio

Debt to Equity Ratio = Total Debt/Total Equity

Year 2015 2016 2017 2018 2019
Total Debt 310,860 389,298 435,588 426,417 371,187
Total Equity 691,855 701,771 174,066 1,125,551 1,174,715
Debt to Equity
0.449313801 0.554736517 2.502430113 0.37885178 0.315980472
Ratio

A high debt / equity ratio generally indicates that the company has been aggressive in financing
its growth with debt. This can result in volatile income as a result of additional interest costs. If
the company's interest expense grows too high, it can increase the chances of default or
bankruptcy. From the above calculation, it can be seen that the highest debt to equity ratio is in
2017 and it can indicates that in that year, the company’s has aggressive financing.

In conclusion, based on the above analysis, the company has perform well by effectively
manages their assets, able to sell their inventory in reasonable period, and mostly not showing
an aggressive accounting and financing.

References
 SCHOOL OF ECONOMICS, FINANCE AND BANKING (SEFB)
UNIVERSITI UTARA MALAYSIA (UUM)
D'Angelo, M. (2020, Jan 9). Accounting Ratios and Formulas: The Basics You Need to Know.
Retrieved from Business News Daily: https://www.businessnewsdaily.com/2665-
accounting-formulas.html#:~:text=by%20cash%20flow.-,Profitability%20ratios,make
%20compared%20to%20their%20assets.

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

Land & General Berhad. (2019). Annual Report 2019. Retrieved from Bursa Malaysia:
https://www.bursamalaysia.com/market_information/announcements/company_announc
ement/announcement_details?ann_id=2974848

Nickolas, S. (2019, August 15). What Do Efficiency Ratios Measure? Retrieved from
Investopedia: https://www.investopedia.com/ask/answers/040715/what-do-efficiency-
ratios-measure.asp#:~:text=Efficiency%20ratios%20measure%20a%20company's,or
%20in%20the%20short%2Dterm.&text=These%20ratios%20measure%20how
%20efficiently,ability%20to%20manage%20those%20ass

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

https://www.reuters.com/companies/LAND.KL
 SCHOOL OF ECONOMICS, FINANCE AND BANKING (SEFB)
UNIVERSITI UTARA MALAYSIA (UUM)

APPENDIX

Figure 1 Five-Year Performance Highlight of Land & General Berhad (Land & General
Berhad, 2019)
 SCHOOL OF ECONOMICS, FINANCE AND BANKING (SEFB)
UNIVERSITI UTARA MALAYSIA (UUM)

Figure 2 Statement of Financial Position of Land and General Berhad 2016 (Land &
General Berhad, 2016)