The report is regarding to the knowledge of analyzing the accounting data of a listed company, using the various accounting information that provided to identify and examine the competitiveness and efficiency of the listed company. Besides, in order to examine the reliability of the data provided, analysis of the balance sheet and income statement is required. The financial information can be obtained from the annual reports of Harbour-Link Group Berhad. In addition, the report is required to include the top-down approach which consists of Economic analysis, Industry analysis and Fundamental analysis to analyze the listed company in the point of view for investors.
Table of Content
2. Analysis of the statement of financial position, the statement of financial performance and cash flow statement.
1. Financial Analysis ratio:
Asset efficiency ratio
Capital Structure ratio
3. Economic Analysis
4. Industry Analysis
In this report, Harbour-Link Group Berhad is chosen among the listed companies. Harbour-Link Group Berhad is an investment holding company which provides shipping, forwarding and transportation, plant and machinery hiring, and engineering contract services primarily in Malaysia and Singapore. Harbour-Link Group Berhad was founded in the year of 1975 and it is based in Bintulu, Sarawak, Malaysia. It was officially listed on Bursa Malaysia Securities Berhad in the year of 2004. Today, Harbour-Link Group’s success lies in its strong foundation of expertise in the industry and its ability to established the company as a reputable brand-name within the shipping, sea freight forwarding and transportation industries.
1. To identify the sources of funds, Balance Sheet and profit or loss of the Harbour-Link Group Berhad.
2. To analyze accounting data of Harbour-Link Group Berhad to examine its financial performance using Financial Performance Indicators (ratio analysis)
3. To analyze the economy status, competitors within the same industries and evaluate the operating efficiencies of the listed company.
4. To examine the competitiveness and efficiency of the listed company by using the various accounting information provided.
Financial analysis ratios are used to examine the financial performance of a company in which it will be reflected in the ratios calculated. (Giles et al, 1994, p.371)
Asset efficiency Ratios
Asset turnover ratio
From the data calculated, the asset turnover ratio for the financial year of 2008, 2009 and 2010 are 109.19%, 92.12% and 79.65%. This indicates that the Harbour-Link Group Berhad is not doing well in the sales of the products or services because the asset turnover ratio is decreasing from year to year.
Debtor turnover (in days)
Debtor turnover is the debtor collection period of a company. Harbour-Link Group Berhad had a debtor turnover of 73 days in the year of 2008. In the year of 2009, the debtor turnover is 77 days. However, its debtor turnover is decreased to 71 days. This reflects that the possibility of default risk for the debtors is decreasing. In fact, this is a good thing in a company.
Inventory turnover measures how many times the company can sell through its inventory for each year. In the year of 2008, Harbour-Link Group has an inventory turnover of 163 times. The turnover increased to 212 times in the financial year of 2009 but the inventory turnover decreased to 127 times in the year of 2010. This reflects that the company can sell better in the year of 2009 but it dropped tremendously in the year of 2010.
Capital structure Ratio
Debt to equity ratio
The debt to equity ratio of...