Analysis Of Dutch Lady Milk Industries Berhad Finance Essay

Analysis Of Dutch chick draw Industries Berhad Finance EssayDutch maam is a union that emphasis on the resultion of the daily growth such as sweetener, yogurt, fresh milk and milk powder. Dutch lady had been starting line their rail line in Malaysia since 1950s. The history of Dutch wench Corpo dimensionn in Malaysia begins after World War II, Dutch lady was among the several brands that imports the angelic condensed milk from its parents company in Holland via local importers and wholesalers.In 1954, Atrading company Friesland (Malaya) Pte. Ltd. based in Singapore was formed to market the odoriferous condenses milk imported from Holland in Malaya and Singapore. Dutch lady had joined the particular company with the brand name Dutch Baby.In 1963, Pacific Milk Industries (Malaya) Sendirian Berhad was incorporated in Malaysia with the commissioning of a sweetened milk factory in Petaling Jaya. This factory was the first oversea outturn factory of the parent company. The con federation has begun their operation in the late 1965 and started to manufacture sweetened condensed milk with the licenses from the parent company.In yr 1968, Pacific Milk industries (Malaya) were converted into a public company and became the very first daily production company that listed in the Stock of Exchange of Kuala Lumpur and Singapore.The name of the company was changed from Pacific Milk Industries Berhad to Dutch Baby Milk Industries (Malaya) Berhad in the hope to avoid the confusion in the trade and marketplace surrounding the name of the company. The company had emphasis on the production of the Dutch Baby Sweetened Condensed Milk. In line with the Companys diversification programmed, the Company commissioned and built an Ultra Heat Treated Milk Plant. Locally packed Dutch Baby Modified Baby Food was also introduced in the same course.Dutch Baby Milk Industries (Malaya) Berhad had sought for diversification in their product by introduces the radical fruit juice drin k product on a lower floor the JOY brand name in year 1979. Dutch Baby Milk Industries (Malaya) Berhad also concern the safety of their product by introducing the sterilized milk in plastic bottles in the 1983.In year 1984, Dutch Baby Milk Industries (Malaya) Berhad once once more(prenominal) change their name to Dutch doll for product positioning reason. In late 1985, a 3 storey building was build to house the Milk Powder packing plant as their occupation grew. During 1987, the Company underwent an equity restructuring exercise to comply with the Governments New Economic Policy. The share capital was enlarged to RM16.0 million. In the same year Dutch gentlewoman had the production of pasteurized milk in their production. Dutch doll had introduced the yogurt and growing up milk in the late 1988 as the strategy to compete with their competitors. Dutch lady Milk Industries had delisted from the Stock Exchange of Singapore in 1989, In complaisance with the Governments national p olicy to pro mote the Kuala Lumpur Stock Exchange.In 1994, Dutch Lady Milk industries nurture their new milestone in the Dairy Product production. A new warehouse was built to accommodate the companys growing business. charitable capital started to expand in line with organizational needs. It is very grateful that Dutch Lady Milk Industries has obtained certification under the ISO 9001 standards.In 1999, Dutch Lady received the Readers condense super Brands Gold Award for macrocosm voted the preferred brand of milk products in Malaysia. In the same year The Dutch Lady UHT Plant also received HACCP (Hazard Analysis Critical Control Point) certification from the Ministry of Health.In year 2000, Dutch Lady received its second Readers Digest passing Brands Gold Award for being voted the preferred brand of milk products in Malaysia. The Company changed its name from Dutch Baby Milk Industries (Malaya) Berhad to Dutch Lady Milk Industries Berhad, to be in line with its main brand Du tch Lady with a new commitment Goodness for Life.In year 2001, Dutch Lady received its third Readers Digest Super Brands Gold Award for being voted the preferred brand of milk products in Malaysia and in year 2002 Dutch Lady won the Brand Equity award for liquid milk. In the same year Dutch Lady Sterilized Milk Plant once again received HACCP (Hazard Analysis Control Point) certification from the Ministry of Health. By the way Dutch Lady received its fourth Readers Digest Super Brands Gold Award for being voted the preferred brand of milk products in MalaysiaThe Companys share capital was add-ond from RM16.0 million to RM64.0 million via a 3 for 1 bonus issue, in compliance with the then Kuala Lumpur Stock Exchange ruling. In 2003, Dutch Lady upgraded the ISO 90011994 certification to ISO 90012000 standard. Dutch Lady launches a range of DHA-enhanced milk products for infants and young children. Again, The Dutch Lady Powder Plant received HACCP (Hazard Analysis Critical Control Poin t) certification from the Ministry of Health.In 2003 also Dutch Lady received its fifth Readers Digest Super Brands Gold Award for being voted the preferred brand of milk products in Malaysia. Nutrition for Vitality Dutch Lady revamped its brand image and packaging with the new corporate tagline Get Ready For Life to profile vitality through healthy lifestyles and activities.In 2004 Dutch Lady received its sixth consecutive Readers Digest Super Brand Gold Award for being voted the preferred brand of milk products in Malaysia. Dutch Lady Corporation did not forget their affable responsibilities to the society in 2006 Dutch Lady donated RM70000 worth of products to Deputy .Prime Minister for the Johor flood victims. In the year of 2004 also Dutch Lady Milk Industries Berhad had won the Award given by National Productivity Corporation (NPC). The objectives of the award are to recognize the companys outstanding productivity management, enhancement and the importance of productivity ad vantage towards economic development in MalaysiaAmong the product that produce by Dutch Lady Milk Industries includes for the growing children Dutch Lady had produce the following productDL YesDL Langkah 1DL Langkah 2DL 123Growing up MilkDL 456Growing up MilkFrisolac Gold 1Frisolac Gold 2Friso Gold 3Friso Gold 4For the familyDL Low Fat YoghurtDL UHT MilkDL Sterilized MilkDL pasteurise MilkDL Milk PowderDL CreamersJoy JuiceFor the young adultsDL ShineDL iced Latte2.0 METHODOLOGYOur group had utilize the secondary resources, Internet to accomplish the assignment given. We had refer to these website to obtain ours information and the financial statement of the company.http//www.dutchlady.com.my/en/home.asphttp//www.icongrouponline.com/pr/Dutch_Lady_Milk_Industries_Berhad_MY/PR.htmlhttp//www.dutchlady.com.my/en/home.asp?page=financialsubpage=annualhttp//www.dutchlady.com.my/sharedfiles/financial/files/DL_QuarterlyReport_Dec06.pdfhttp//www.dutchlady.com.my/sharedfiles/financial/files/ DL_QuarterlyReport_Dec07.pdfhttp//www.dutchlady.com.my/sharedfiles/financial/files/DL_QuarterlyReport_Dec08.pdfWe also refer to the handout that given by the lecturer to solve the ratio in order to finish our financial analysis for the company. We had use several formula to solve the calculation in the handout and we also refer to our textbook for the difficulties that faces by us. Financial ratio analysis includes liquidity ratio, asset management ratio, profitability ratio and leverage ratio. Below are the lists of the formula that we use for this assignment.Current Ratiohigher(prenominal) figure means the business financial condition is give way as it has enough liquid assets for its operation.Quick RatioHigher figure shows the business has enough quick assets to cover its short debt immediately.Average Collection PeriodComparison of this ratio with credit period will measure the efficiency of the firm to collect its debt.Inventory TurnoverHigher figure shows that the firms i nventory moves more quickly, meaning that inventory will be sold and replaced more frequently.Total Asset TurnoverThis ratio will destine how much of sales can be generated from every dollar of the firms asset. Higher result shows that the firm manages its asset effectively.Debt RatioLower ratio is better. It means more coverage earn by creditors if the firm goes bankrupt.Time Interest Earn RatioThe ratio indicates firms ability in paying worry. Higher ratio shows better ability in meeting elicit payment.Net Profit MarginHigher ratio is better because it shows the reducing in expenses or cost in producing sales.Return on EquityHigher ratio is better because it shows that the firm can generate better return to the owner of the firm.4.0 CONCLUSIONIn conclusion, Dutch Lady Milk Industries Berhad Malaysias liquidity has becomes better from the year 2006 to 2008. Although the current ratio has falloff from 2006 to 2007 which is from 1.773 generation to 1.414 times but the ratio enl arges from year 2007 to 2008 which is from 1.414 times in year 2007 raise to 1.737 times in year 2008. It shows that the business financial condition is becoming better where it has enough liquid asset of its operation in year 2008.Based on the quick ratio, the firms liquidity is not stable from the year 2006 until 2008, which it has diminutions from 1.148 times to 0.702 times. The decreased ratio shows that the business might not have enough quick assets in year 2007 to pay its short term debt immediately equalise to year 2006. However the ratio appends to 1.134 times in year 2008 and this mean the company have enough quick assets to pay their short term debts.The Dutch Lady Milk Industries Berhad had become less efficient in collecting its account receivable from year 2006 to 2008 which the average collection period has increases from 45.6 days to 59.39 days. These figures show that the business need to take longer time in year 2008 compare to year 2006 to collect its debt.Base d on the total assets turnover, the company has manages its assets more efficiency in year 2006 compare to year 2007 and 2008 which is decrease from 2.43 times to 2.067 times and increase back to 2.41 times in 2008. This means that more sales have been generated from every Ringgit Malaysia of the company assets in year 2006 compare to 2007 and 2008The fixed assets turnover has also increased from 9.321 times in year 2006 to 10.11 times in year 2007 and 10.62 times in 2008. The increasing in this ratio shows that the company has been more effective in produces the business sales from its fixed assets.Profitability Ratios is measures that indicate how well a firm is performing in terms of its ability to generate profit.Return on assets (ROA) is use to indicate how profitable a company is relative to its total assets. Base from the calculation, it was show that the return on assets is decrease from 20.4% (year 2006)to 16.04% (year 2007) and 14.4% (year 2008), more higher value (%) is calculated that means higher return on assets, so the return on total assets is evidently decrease 6% from year 2006 until year 2008.Net profit margin is use to measures howmuch outof every ringgit Malaysiaof sales a company actually keeps in earning. Base from the calculation, it was show that the net profit margin is decrease from 8.4% (year 2006) to 7.8% (year 2007) and 6% (year 2008), so that means the Dutch Lady Milk Industries Berhad has a net income of RM0.084 for for each one ringgit Malaysia of sales in year 2006, but it was decrease to RM0.078 for each ringgit Malaysia of sales in year 2007 and RM0.06 in year 2008.Return on equity (ROE) is measures a corporations profitabilityby revealing how muchprofit a company generateswith the money shareholders have invested.Base from the calculation, it was show that the return on equity is increase from35.6% to 37.13% (year 2007) but decrease to 26.4% (year 2008). Higher value (%) is calculated that means the common stockholders of the firm will receive more return on their equity investment, so the return on equity was indicate the accounting return on the common stockholders investment was evidently increase 1.5% from 2006 to 2007 and decrease 10.73% from year 2007 until year 2008. In a conclusion, the calculated was indicating the Profitability Ratios of Dutch Lady Milk Industries Berhad at year 2006 is better than year 2008.The debt ratio of Dutch Lady Milk Industries Berhad increase from 42.8% to 56.8% from year 2006 to 2007 and decrease from 56.82% (year 2007) to 45.3% (year 2008).Although the company need adequate short term borrowing in year 2007 to cover their operation but in year 2008 the companys short term borrowing shows the obvious decline. This shows that in the year 2007 the company total debt is higher than the year of 2008, and this prove that the company manage to decrease their debt and fashioning their total asset increase throughout the year before to the next year. This also shows tha t the company has the ability to pay up their liabilities and due to this its shows that this company has a low financial risk where the percentage of debt ratios is decreasing after the coming year. Apart from that, this show that the firms assets that financed by debt is used effectively where the ratio is lower than in the year 2007 because less debt in financing results in shows less financial risk.The time relate earned of Dutch Lady Milk Industries Berhad is increase from 126.98 times to 264.33 times from 2006 to 2007 and decrease from 264.33 times (year 2007) to 196.47 times (year 2008). This is because the revenue for company has increase from 2006 to 2007 and decrease along two years which are 2007 and 2008. At the same time, the interest expenses for company have increase along three years. This is because maybe the company not able to generate sufficient revenue so that they need to increase their loan. As a result, it leads to increase and decrease in time interest earn ed. Through this, the company shows that they need to improve their ability in meeting interest payment. This ratio used to measure the number of times the firm has gained to pay interest expenses. The higher the ratio is better because it shows the ability in meeting interest payment.