Net Tangible Asset of Sp Setia

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Net Tangible Asset
Net tangible asset is the underlying value of a company. It is also known as “net asset value” or “book value”. For instance, land, equipment, cash, accounts receivable, machinery, plant and property are the most common example for the tangible assets. The value of all of these assets except for land will be depreciated. However, net tangible asset is not the value that can be dictated by the supply and demand of shares or its market capitalization. Moreover, net tangible asset that has long term physical existence is the assets that are owned by the company and not for sale to the customers but it is acquired for use in the operation of business. Therefore, to obtain net tangible asset, the total assets of the company need to minus any intangible assets such as goodwill, patents and trademarks and also less all liabilities. S P Setia Berhad is Malaysia is a leading property developer and is well known for its innovation driven and standard-setting projects that include townships, eco sanctuaries, luxury enclaves, high-rise residences and commercial developments. S P Setia Berhad is not only well established in the three key economic centers of Malaysia, namely Klang Valley, Johor Bahru and Penang, but there is also overseas expansion such as Melbourne, China, Singapore and also Vietnam. From year 2007 to 2011, the net tangible assets of the Group are gradually increasing with different margin. During year 2011, the net tangible assets achieve the highest discrepancy from the previous year while during year 2009; it is the other way round.

The following table and graph shows the summary of the total net tangible assets from year 2007 to 2011.

Year Ended 31 October (RM’000)| Total Net Tangible Assets| Difference| 2007| 1,839,993| 134,469
61,889
152,062
1,251,073
|
2008| 1,974,462| |
2009| 2,036,351| |
2010| 2,188,413| |
2011| 3,429,486| |
Table 1: The total net tangible assets from year 2007 to 2011 and the difference of the total net tangible assets between years.

Graph 1: The variation of the total net tangible assets from year 2007 to 2011.

During the first three quarters of 2008, there was a runway inflation that was made worse by the spike in fuel and energy prices. Many industries were suffered in this tragedy includes construction sector. Therefore, 2008 was a year of uncertainties and challenges to most of the industries. The new petrol and diesel prices were effective at 5th of June 2008. The following table shows the new prices of petrol effective from midnight of 4th of June 2008. The price of petrol and diesel is increased | New Price| Old Price|

RON 97 Petrol| RM 2.704 / liter| RM 1.920 / liter|
RON 92 Petrol| RM 2.620 / liter| RM 1.880 / liter|
Diesel| RM 2.581 / liter| RM 1.580 / liter|
Table 2: The new and the old price of petrol and diesel.
by RM 0.842 which is considered a big amount. According to Prime Minister Tun Abdullah bin Haji Ahmad Badawi, the new price of RON 97 Petrol which is RM 2.704 per liter is already included the 30 sen government subsidiary. For your information, the 30 sen subsidy will be a fixed amount of subsidy that wills subsidies the market rate which is RM3.00 per liter. As a result, there was a slowdown and disruption in work progress in the whole construction sector since the price of the building materials hit an all time high. Follow by this, the operating costs of the construction work will also be definitely increased.

Besides, the country went through a period of political upheaval. On 10th July 2008, Prime Minister Tun Abdullah bin Haji Ahmad Badawi announced that he would step down as UMNO President and Prime Minister in June 2009. Tun Abdullah bin Haji Ahmad Badawi handed his resignation letter to the Yang di-Pertuan Agong on 2nd April 2009. During his administration, he was portrayed as sluggish and listless. His administration became restrained in controversies and scandals and he...
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