ACC 6201 – Individual Assignment|
Ting, Tai Siong (Student ID: I 12000998)|
Course Intake : May 2012 / MBA
Lecturer Name : Mr. Madhavan Kpoduval
Table of Contents
A)Financial Ratio Limitation5
B)PARKSON Financial Ratio Analysis6
C)COMPETITOR Financial Ratio Analysis12
3)Why invest in Parkson?16
A)Financial Ratio Analysis Summary28
B)Financial Ration Computation28
1) Executive Summary
Parkson Holdings Berhad (Parkson), a board line retailer is based in Kuala Lumpur, Malaysia, a subsidiary of the Lions Group based in Malaysia. The company was formerly known as Amalgamated Containers Berhad and changed its name to Parkson Holdings Berhad in September 2007.
Parkson Holdings Berhad's after-tax profit for the Financial years ended June 30, 2011 increase 12 per cent to RM606,622,000 from RM533,598,000 in year 2010. However, its revenue increased 7 per cent to RM2,925,082,000 from RM2,722,256,000. Financial years ended 2011 ranked 3rd as compare to Financial year ended 2009 which ranked 1st in its 5 years financial performance from 2007 – 2011.
Parkson’s Retail operation in Malaysia posted a favorable set of results with gross sales proceeds rising 9 per cent to RM 766 million over the same period in 2010.
The Chairman highly alerted on global economy was abruptly affected by the US credit rating downgrade and the debt burden in Europe. As such, Chairman see strong domestic demand in Malaysia is the key to continue to deliver strong revenue and earnings to improve financial performance year ended 30 June 2012.
Besides, it also continued to source for good locations in anticipation of new stores opening, having opened to further strengthen the group's network and operations in the respective retail markets. News sources indicate there is a plan to open another 18 stores in Malaysia by 2020. Existing 37 stores will continue to serve strong domestic demand. Parkson’s Retail operation in Malaysia is the second large income contributor to the group after China.
Parkson will continue to reinvent and upgrade its existing stores and make changes when necessary to further enhance their image with updated fashion brands along with premium and niche international brands being introduced to the burgeoning middle and middle-upper class it served. This also help to improve its market share in all the markets it operates in. Nevertheless, more innovative sales and promotion activities are introduce to continuously deliver positive expansion in gross sales revenue. Knowingly and recognize stiff competition from AEON(JUSCO), METROJAYA, SOGO, ROBINSON & Co., ISETAN.
In line with the improving macroeconomic outlook, Parkson will seek to improve its existing operations and implement its expansion strategies to strengthen regional presence in Asia. Last year 2011, the expansion activity in Indonesia is a proven success and there will be additional 5 stores opening in year 2013 on the same country, announced recently.
2) Financial Analysis
Financial Ratio analysis is used to quantify financial statement information and produce insight on revenue trends, company’s business profitability, growth, margins and returns, financial liquidity and debt positioning, in organized fashion which allow potential investor to make CRITICAL decision making. Nevertheless, this assignment is also look into company strategies, competitor and the external factors that will influence Parkson in the future.
Ratio analysis produces data and compute against value printed in financial statement it does not build any relationship model like a database. Usually, an experience financial analyst has the ability to interpret effectively by considering given economic factor, competitor analysis and industry expert data.
A) Financial Ratio Limitation
1) Quality and reliability of...