Assess the Business and Financial Performance of City Developments Limited

Topics: Financial ratios, Financial ratio, Corporate finance Pages: 33 (6843 words) Published: November 22, 2011

BSc (Hons) in Applied Accounting

Research and Analysis Report

Assess the business and financial performance of City Developments Limited (CDL) from 2007 – 2009 for the suitability of investment.

March 2011


a)Introduction 1

b)Background of City Developments Limited (CDL)1 - 2

c)Background of Industry2 - 3


a)Sources of information 4

b)Method use 4


a)Overall review of the group performance 5

b)Profitability 5 - 7

c)Efficiency 8 - 9

d) Gearing 10 - 11

e)Liquidity 12 - 13

e)Investor 14 - 15



a)Consolidated Income Statement 17

b)Statements of Financial Position 18

c)Ratio Analysis 19



a. Introduction
i) Topic chosen
I have selected Topic 8 is to analyse the business and financial position of the company.

The purpose to conduct this research and analysis is to assess the business and financial performance of City Developments Limited (CDL) from FY2007 to FY2009 so to provide useful information to investors for their economic decision making. It is crucial for investors to be aware of the risk of their investment, profitability and future growth of CDL before investing in the company.

To achieve this, I will review and analyse CDL’s performance for the past three years and gathering all relevant information. I will also perform detailed finding and ratios calculation in order to ensure CDL’s investment is suitable and feasible from the viewpoint as investors.

CDL’s analysis is excluding financial year FY2010 due to it’s audited Annual Report 2010 is not yet available at the time of doing this research and analysis project.

iii)Reason for choosing the topic
Topic 8 is an interesting topic for me to learn how to analyse the company’s business and financial performances before considering invest in the company. Besides, the information required are easily accessible through internet website (e.g. Annual Reports). This is an added advantage for me to conduct the research.

By selecting the topic, I am able to refresh my mind and apply what I have learnt from my past ACCA syllabus. I am also able to review the company’s financial statement and calculate the financial ratios more accurately in a more realistic method as it is involved part of my working experiences.

b.Background of the CDL
CDL was incorporated on 1 September 1963 in Singapore, is a Singapore listed company held by the Hong Leong Group. The company currently holds 5 companies listed on stock exchange in New Zealand, Hong Kong, London and Philippines. It has more than 300 subsidiaries and associates running the group operations. The company’s financial year end on 31 December.

CDL’s core business activities are involvement in residential developer, commercial landlord, hotel owner and operations and provide hospitality solution services.

As the Singapore’s property pioneer over the years, CDL has contributed numerous quality and luxurious homes to Singapore residential and housing market. The launched of high-end residential such as One Shenton at Marina Bay area, Botannia, St. Regis Residences, The Oceanfront at Sentosa Cove and others are among the prestigious, excellence, good quality and well response development projects from the group. The One Shenton and The Oceanfront @ Sentosa Cove located at Singapore heartland have won the title of Best High Rise Development and Best Development respectively.

Properties development is the main profit contributor to the group for the FY 2007 to 2009.

b.Background of the CDL (cont’d)...
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