review

Topics: Balance sheet, Inventory, Cash flow Pages: 7 (2538 words) Published: January 26, 2014
This research paper will use intra-entity basis (within the company) and industry (differences between entities within the industrial product industry) analyses to examine the competitiveness of Choo Bee Metal Industries Berhad (CB). Ann Joo Resources Berhad (AJ) will be used for comparative studies. It begins with the external environment analysis, followed by industry attractiveness (Porter’s Five Forces) and SWOT analysis. The main focus is evaluating CB from the accounting management perspective. It includes horizontal analysis, vertical analysis and ratio analysis. The horizontal and vertical analyses cover income statement, statement of financial position and cash flow. The ratio analysis will examine liquidity, solvency and profitability of the company. In addition, the research will cover non-financial perspective which is Balanced Score Card. Finally, the research will provide recommendations to improve and enhance the company’s overall operating efficiency and effectiveness. This research paper will use intra-entity basis (within the company) and industry (differences between entities within the industrial product industry) analyses to examine the competitiveness of Choo Bee Metal Industries Berhad (CB). Ann Joo Resources Berhad (AJ) will be used for comparative studies. It begins with the external environment analysis, followed by industry attractiveness (Porter’s Five Forces) and SWOT analysis. The main focus is evaluating CB from the accounting management perspective. It includes horizontal analysis, vertical analysis and ratio analysis. The horizontal and vertical analyses cover income statement, statement of financial position and cash flow. The ratio analysis will examine liquidity, solvency and profitability of the company. In addition, the research will cover non-financial perspective which is Balanced Score Card. Finally, the research will provide recommendations to improve and enhance the company’s overall operating efficiency and effectiveness. Choo Bee Metal Industries Berhad (CB) was established in 1971, together with its 3 subsidiaries operated in 10 locations (CB Annual Report, 2012). CB engages in the processing of steel coils into steel products, fabrication of steel products and trading of hardware products in the country as well as selected Asian markets. The products are sold into 2 segments, steel products usually selling directly to end customers whereas hardware products selling through dealers across the country. CB is a subsidiary of Soon Lian Huat Holding SB. Its head office is in Ipoh. Although the ruling party is not dominant the majority parliament seat of 2/3, the political environment is considered stable in the country after the 13th election in 5th May 2013. The new cabinet is not implementing any policy that causes major restriction impact to the steel industry. The local steel industry is facing challenges with higher raw material cost, lower price finished products imported from China and delay in major infrastructure projects. Malaysian economy is expected to remain on steady growth of 5.1% (World Bank, 2013). Urbanization has created demand on residential estate in recent decade. Although the residential estate price has been overvalued, we are foreseeing the residential demand still able to sustain the growth of the steel products in this segment in short term at least. The industry is going through technology transformation and mostly large companies are investing into supply chain software and cutting edge technology in the steel manufacturing processes such as equipment that is able to process steel coil in almost full automation. The recent 2014 budget on certain constraints like impose higher tax from profit gain on selling residential houses may impact slowdown in residential estate transactions but yet to see the impact at this moment. 5.1Income Statement

Gross profit decreased by RM 59,968,968 (2010) to RM 47,842,000 (20.2%) in 2012. Since revenue...
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