Financial Performance Analysis of Old Chang Kee Ltd
Summary
This report provides a comprehensive analysis of the key ratios for accessing the financial performance and position of Old Chang Kee over the past 3 financial years, as well as a critical appraisal of the accounting policies used by Old Chang Kee. Stock performance and market perception are also discussed in the report.
Old Chang Kee has a lower profitability in 2010, the key drivers were a huge reduction in government grants and higher cost of raw material. However Old Chang Kee maintained well at a lower gearing level and improved its efficiency in production. Old Chang Kee also had more sufficient liquid resources available to meet current obligations. With a higher P/E ratio, investors believe a better future prospect of the firm. Old Chang Kee faces high competitiveness due to more go-to snack shops opened. However the consistent quality of foods and its branding made Old Chang Kee becomes an over performer in the market. As more international events to be held in Singapore, this will boost the tourism industry, market performance of Old Chang Kee may also push upward.
Change in accounting Policies by Old Chang Kee
Old Chang Kee adopted new and revised Financial Reporting Standards (“FRS”) for both annual financial reporting in FY2009 and FY2010. The standards issued by the Singapore Accounting Standards Council (ASC), which are based on the International Financial Reporting Standards (IFRS). The mandate of ASC is to develop, review, amend and approve accounting standard, which will track closely the introduction of new IFRS for possible application in Singapore. It will take into account the Singapore’s local economic and business circumstances and the entity which the accounting standards would apply to. The FRS only gives rise to additional disclosure to accounting policies and not to have any effect on the company financial performance.
Financial Analysis
• Profitability
Gross Profit Margin increased slightly from 59.61%
This report provides a comprehensive analysis of the key ratios for accessing the financial performance and position of Old Chang Kee over the past 3 financial years, as well as a critical appraisal of the accounting policies used by Old Chang Kee. Stock performance and market perception are also discussed in the report.
Old Chang Kee has a lower profitability in 2010, the key drivers were a huge reduction in government grants and higher cost of raw material. However Old Chang Kee maintained well at a lower gearing level and improved its efficiency in production. Old Chang Kee also had more sufficient liquid resources available to meet current obligations. With a higher P/E ratio, investors believe a better future prospect of the firm. Old Chang Kee faces high competitiveness due to more go-to snack shops opened. However the consistent quality of foods and its branding made Old Chang Kee becomes an over performer in the market. As more international events to be held in Singapore, this will boost the tourism industry, market performance of Old Chang Kee may also push upward.
Change in accounting Policies by Old Chang Kee
Old Chang Kee adopted new and revised Financial Reporting Standards (“FRS”) for both annual financial reporting in FY2009 and FY2010. The standards issued by the Singapore Accounting Standards Council (ASC), which are based on the International Financial Reporting Standards (IFRS). The mandate of ASC is to develop, review, amend and approve accounting standard, which will track closely the introduction of new IFRS for possible application in Singapore. It will take into account the Singapore’s local economic and business circumstances and the entity which the accounting standards would apply to. The FRS only gives rise to additional disclosure to accounting policies and not to have any effect on the company financial performance.
Financial Analysis
• Profitability
Gross Profit Margin increased slightly from 59.61%