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International College
Assignment of Business Accounting
Mavlonbek SOLIEV 0086MWMW0612 Bachelor of Arts /HONS/ Business studies Business Accounting The First Semester Submission on 20th of August Lecturer is Mr. Francis Asirvatham
Contents
1.0 Introduction ............................................................................................................................... 4 1.1 Company Background ........................................................................................................... 4 1.2 Board of directors in Lafarge ................................................................................................ 5 1.3 Vision and Mission of the company...................................................................................... 6 2.0 The Business Environment ....................................................................................................... 6 2.1 The General Environment ......................................................................................................... 6 2.1.1 Political Factors .............................................................................................................. 7 2.1.2 Social Factors ................................................................................................................. 7 2.2 The Specific Environment ..................................................................................................... 7 2.2.1 Competitors .................................................................................................................... 7 2.2.2 Customers ....................................................................................................................... 8 3.0 Ratio analysis of LMB .............................................................................................................. 8 3.1Profitability........................................................................................................................... 10 3.1.1 Net profit Margin .......................................................................................................... 10 3.1.2 Return on Capital employed Ratio ............................................................................... 11 3.2 Liquidity .............................................................................................................................. 11 3.2.1 Current Ratio ................................................................................................................ 11
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3.2.2 Quick Ratio ................................................................................................................... 12 3.3 Efficiency ............................................................................................................................ 12 3.3.1 Fixed Asset Turnover Ratio .......................................................................................... 12 3.4 Capital Structure.................................................................................................................. 13 3.4.1 Capital Gearing Ratio ................................................................................................... 13 3.4.2 Interest Cover ............................................................................................................... 13 3.5 Investors Ratio..................................................................................................................... 14 4.0 Discussion on Limitation of the Ratio Analysis ..................................................................... 14 5.0 Conclusion .............................................................................................................................. 14 6.0 Bibliography .......................................................................................................................... 15
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1.0 Introduction
Since down of civilization, people have been achieved to make their life easier. They build high story buildings, streets and alleys, better cities under the housing programs that are accessible for everyone. There are many of companies that contribute to improve cities, offer more housing, more beautiful, and more tolerant also better connected. It is the fact that Lafarge Malaysia Berhad which also known as Lafarge Malayan Cement Berhad one of the leader construction materials company today in Malaysian industry. Company is engaged in the manufacturing cement, ready mixed concrete and other building materials. This assignment will give specific facts and information about Lafarge Cement Companys management team, key environmental factors, ratio analysis of this business.
The responsibilities and main role of the directors is to exemplify stockholders and to encourage and care for the interests of the Company. The directors Board is so responsible to the shareholders for the routine of the company. Currently, the board includes 9 member encompassing, 3 non-executive directors, 4 independent directors, 2 executive directors. The Board is controlled by Chairman who is Y.T.T Sri Imran Ibni Tuanku Jaafar and executive management of the Lafarge is being led by CEO, Mr. B Mulroney.
Independent Non-Executive Director & Chairman Age 66, Malaysian, He has been appointed as NonExecutive Director 34 years before in 1979 and as a chairman in 2003. He holds a degree Bachelors of Law from University of Nottingham in 1970. Five years after graduating he worked in several positions in Perbadan National Berhad and Haw Par Sdn Bhd.
Chief Executive Officer & President Age 51, British, He joined the company on July 2009 as an Executive Director of LMB. After three years on first January 2012 he has been introduced as a president and CEO. He holds a degree from the University of London, Great Britain, in 1985. He made a start career
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in Redland PLC, UK from graduating year. Until 1999 he worked as a General Manager and several positions in PLC. In 1999 he has served in Lafarge Aggregates and Concrete, UK, that in Regional Director position.
MissionAt LMB mission is carrying on handling the leadership in Malaysian industry for Helping its consumers to find a value in own business Giving a chance to employee to support themselves Making a value for its stockholders. (Lafarge Malaysian Berhad, 2012) VisionAt company vision was created for... Helping the human being Regardless of income Reaching better quality housing at a price the everyone can give. (Lafarge Malaysian Berhad, 2012)
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2.2.1 Competitors
The Lafarge Malaysian Berhad is the Malaysians top cement manufacturer at present occupies more than 40% share of the market. It competes against several competitors are YTL Cement and Cement Industries of Malaysia / CIMA/, this two company intended capacity developments.
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New entrant Hume Industries, which has built a new 1.6 M plants joined competition in the local market, too. In order to develop the competition, several construction manufacturers have taken to providing returns to defense market share even later rising price last year in August. CEO expects prices to step by step coming back to a better stable condition. For the year ended last year, Lafarge reported a 10% growth, which is as expected, according to net profit when income raised 7 per cent to MYR 2.75bn. (CN cement, 01 April 2013)
2.2.2 Customers
There are largely effects of the customer needs on the operational planning of the Lafarge Malayan Berhad. Consumers always demand safer, quality construction materials that company produces cement, concrete, aggregate at cheaper prices, which pushes the Lafarge to find lower price of production containing outsourcing parts of its productions.
Profitability
2011
2012
Liquidity
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Efficiency
5.0
Debtor collection=
days
days
times
times
Capital Structure
7.0
Gearing=
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Investor Ratio
=17,3% =16,2%
10.
=1036,7pence
=919,8pence
3.1Profitability
Profitability is that able to get great revenue reconfirms organizations to give investors and security pouches will go on to offer funding for the benefit of the company is also thoroughly concomitant to shortage of liquidity, since takings in the long term functioning cash flows. In order to be agree with this reason, this is the important to appraisal the takings for the stockholders and moneylenders. In business profitability is called that it is the one of the main areas of business. Profitability in business for the its success or to survive the business, profit must be earned. (Research and Markets , 2013)
all measures, containing taxes and interest cost, depreciation and calculation: (Ready Ratios, 2011) Net profit margin = two supporters of the cash from the returns
declaration. Lafarge Malayan Berhad PLC: Public Limited Company has had a ratio of 99.2 % and 98, 9 % from the year 2011 to 2012 individually. But it does not mean company has had a much of profit on each dollar of sales. Net profit margin declined because in 2011 year the expenses of the firm increased and the spillover effect affected ROCE. However, In order to develop the firms profitability the Lafarge must control its expenses
3.2 Liquidity
Ability of the firms in order to pay on time and to meet unpredicted needs for cash is called Liquidity. All associates connected to liquidity and functioning center or share of the functioning capital debt. Liquidity is thoroughly linked to cash flow, too. (Sangster, 2002)
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Current ratio means whether the company has sufficient cash to run the business day to day basis. Normally, division amount should be 2:1. Whether, the division is more than the usual level means which assets is not enough being used by the firms, whether it is less than the level there is not sufficient cash to drive the business, the company will be face on problems of liquidity. Current assets ratio is calculated according to this following formula
The Current ratio of Lafarge Malayan Berhad has ratio of 0, 89 and 1, 17 from 2011 to 2012 singly. The business of the Lafarge M B has been run better than 2011, but now also company has had sufficient cash to control the business in that both two years. (Lafarge Malaysian Berhad, 2012)
3.3 Efficiency
Trade Debtor Collection Period Ratio
Using this ratio to define how long firms credit cash to the company belongs to the customers. This shortens the exploration of accounts receivable that might not constantly be the same credit terms, what firms has done for consumers. In association with the terms of firms loan, they can evaluate the "quality" of the gathering of accounts receivable obligation. Dated "attitude," that means that ideas to the effectiveness. Effectiveness and recital associated, corporate productivity, tend to be more commercial. This ratio is deliberated with following formula = (Bloomberg Businessweek, 2013)
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This is the how assets is being used by the firms, whether the failure, turnover, is higher the exploitation of assets is better. The formula = The Assets Turnover of LMB has had a ratio of 3, 3 and 3, 4 from 2011 to 2012 individually. The Assets turnover of LMB has had improved by 0.1, which is respectable for the company.
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5.0 Conclusion
There are none firm can be shown containing LMB international can check whether is it making a benefit or loss, this is a so public for the business called liquidity ratios. Liquidity ratios are used in each business institutions. After all calculations will be done and companies might know where are they in the business environment or where their position is? Only the way of the improving economic situation of the firm is checking its results. No doubt, they aware how
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assets are being used, how money are being collected from the debtors and paying credits. Return on investments may be known by the directors, that means cash from the marketing stocks. How efficiently productivity is being used, which cash to drive the industry. Also stockholders are interested in the ratios such as receiving each share. Whether the arrival is huge the connection among consumers and firm will improve advance. All that above, which are the ways how to analyse the industry actions for creating benefit.
6.0 Bibliography
Bloomberg Businessweek, 2013. LMC kuala lumpur. [Online] (1.15) Available at: http://investing.businessweek.com/research/stocks/financials/ratios.asp?ticker=LMC:MK [Accessed 06 august 2013]. CN cement, 01 April 2013. Lafarge Malayan Cement mulls expansion. [Online] (1.15) Available at: http://www.cemnet.com/News/story/151873/lafarge-malayan-cement-mulls-expansion.html [Accessed 31 July 2013]. Finace Formulas, 2012. Quck Ratio. [Online] (1.15) Available at: http://www.financeformulas.net/Quick_Ratio.html [Accessed 10 august 2013]. Lafarge Malaysian Berhad, 2012. annual report. pdf. petaling jaya: P.O. Lafarge Malaysian Berhad, 2013. About us. [Online] (1.15) Available at: http://www.lafarge.com.my/wps/portal/my/1-About_us [Accessed 21 july 2013].
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Ready Ratios, 2011. Net Profit Margin. [Online] (1.5) Available at: http://www.readyratios.com/reference/profitability/net_profit_margin.html [Accessed 05 august 2013]. Research and Markets , 2013. Lafarge Malayan Cement. [Online] (1.15) Available at: http://www.researchandmarkets.com/ [Accessed 05 august 2013]. Sangster, F.W.&.A., 2002. Business Accounting. ninth edition ed. Edinburgh: Pearson education limited. Stephen P Robins, M.C., 2003. Environment. 3rd ed. Australia: Pearson Education Centre. The Star, 2013. The Business News. The Star, (12).
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