Biscuit Companies Financial Analysis

TABLE OF CONTENT

1.0        EXECUTIVE SUMMARY                                                                3

2.0        COMPANY BACKGROUND                                                                4

        2.1        HUP SENG INDUSTRIES BERHAD

2.2        LANDON BISCUITS BERHAD

2.3        HWA TAI INDUSTRIES BERHAD

2.4        COCOALAND HOLDINGS BERHAD

2.5        APOLLO HOLDINGS BERHAD 

3.0        FINANCIAL ANALYSIS                                                                 6

        3.1        LIQUIDITY RATIOS

        3.2        PROFITABILITY RATIOS

        3.3        ACTIVITY RATIOS

        3.4        LEVERAGE RATIOS

        3.5        MARKET RATIOS

4.0        FOUR factors leading to the company’s current financial status                        19

5.0        THREE RECOMMENDATION to revitalize the company                                21

EXECUTIVE SUMMARY

This report provide an analysis and evaluation of the current and prospective profitability, short and long-term solvency, asset management or turnover and market value of Hup Seng Industries Berhad. Fundamental analysis of financial position included current and quick ration for short-term solvency or liquidity measure; debt ratio and time-interest-earned ratio to address Hung Seng’s long-run ability to meet its obligation; while net profit margin, operating profit margin and return of equity to evaluate its profitability. Other calculation included inventory turnover ratio, day-sales outstanding, fixed asset turnover ratio to look for the efficiency with which Hup Seng uses its assets and price-per-earnings ratio and market-to-book ratio to determine its market value. Result of data analysed indicate that almost all of the ratios are above industries average.

The report finds the prospects of Hup Seng in its current position are positive. The company has certain area of strengths particularly on its net profitability and ability to meet its short and long-term obligations. Furthermore, Hup Seng has a very high ratio on the return of equity (ROE), indicating that it generated a high profit with the least money shareholders have invested. Undoubtedly, investors will be very keen to invest into a company with a high ROE and PE ratio like Hup Seng. However, there’s an area for improvement such as inventory turnover. Perhaps, they should figure out some effectively ways to clear out its inventory. Otherwise, it may have substantial portion of its liquidity tied up in slow moving inventory.