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BFW2140 Corporate Finance : Statements of Bonia Corporation

You are required to choose a company (any company of your choice as long as data is/are available) and perform a thorough financial statement analysis using at least four (4) audited financial year data.

The analysis should cover the close competitors and industry-related issue and standards.

The assignments mist describe the financial condition of the business, the efficiency of its activities, its profitability, and the perception of investors as expressed by their behavior in current condition and any expected future trends.

  • Identify and analyze trends in financial statements
  • Carry out ratio analysis to analyse the performance of the company e.g. asse management, debt management, profitability, liquidity & valuation.
  • Evaluate off-balance sheet and other relevant information for more meaningful financial analysis
  • Provide a conclusion and recommendations wherever applicable

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[Accessed 30/09/2022].

Urgent Homework . ''(Urgent Homework ,2022) https://www.urgenthomework.com/sample-homework/bfw2140-corporate-finance-statements-of-bonia-corporation accessed 30/09/2022.

Answer:

Introduction:

The current assignment aims to evaluate the trends in the financial statements of Bonia Corporation Berhad, which has been selected as the organisation. The organisation is one of the leading retailers in Malaysia and Amtek Holdings Berhad has been chosen as its competitor. Thus, the financial performance of the organisation has been evaluated by considering the data of the past four years with that of the competitor. In addition, the off-balance sheet and other pertinent information related to Bonia Corporation Berhad have bee


n briefly illustrated.

Trend analysis in financial statements of Bonia Corporation Berhad:

In order to conduct the trend analysis of the financial statements of Bonia Corporation Borhad, the percentage change in each year has been conducted (Refer to Appendices, Appendix 1, Appendix 2 and Appendix 3).

Trend in income statement:

From the evaluation of the income statement, it has been observed that the revenue margin of the organisation has declined sharply, while the cost of sales has increased largely in 2016. As a result, the net income of Bonia Corporation Berhad has declined largely in 2016.

Trend in balance sheet statement:

According to the balance sheet statement of the organisation, the overall asset base of the organisation has not increased in comparison to the overall liability base of the organisation (Bonia.com 2017). This depicts that the organisation has not been able to generate sufficient returns from assets and as a result, the debt burden of the organisation has increased further in the Malaysian market (Ramezanalivaloujerdi, Rasiah and Narayanasamy 2015).

Trend in cash flow statement:

According to the cash flow statement, the net cash generated from operating activities has increased largely. The net cash from financing and investment activities have increased as well; however, the realisation from operating activities has been higher in 2016. As a result, it has increased the cash balance of Bonia Corporation Borhad in 2016.

Performance of the organisation through various ratios:

Particulars

 

Bonia Corporation Berhad

Amtek Holdings Berhad

Details

2013

2014

2015

2016

2013

2014

2015

2016

Revenue

A

632

692

695

665

47

39

40

32

Cost of revenue

B

247

269

285

299

26

19

22

18

Gross profit

C

386

422

411

366

21

20

18

14

Net Profit

D

41

55

45

25

-1

0

-4

-3

Inventory

E

110

145

154

149

20

22

25

15

Non-current liabilities

F

78

131

131

154

0

4

3

3

Equity

G

302

346

388

406

25

25

24

21

Current assets

H

292

327

370

371

46

45

44

36

Current liabilities

I

113

135

146

149

26

26

24

21

Market value per share

J

5

5

3

1.5

3

1

1

0.5

Earnings per share

K

0.05

0.07

0.06

0.03

-0.01

0

-0.07

-0.05

Inventory turnover

365/(B/E)

162.55

196.75

197.23

181.89

280.77

422.63

414.77

304.17

Debt-to-equity

F/G

0.26

0.38

0.34

0.38

0.00

0.16

0.13

0.14

Gross margin

C/A

61.08%

60.98%

59.14%

55.04%

44.68%

51.28%

45.00%

43.75%

Net margin

D/A

6.49%

7.95%

6.47%

3.76%

-2.13%

0.00%

-10.00%

-9.38%

Current ratio

H/I

2.58

2.42

2.53

2.49

1.77

1.73

1.83

1.71

Quick ratio

(H-E)/I

1.61

1.35

1.48

1.49

1.00

0.88

0.79

1.00

Price/earnings ratio

J/K

100

71.4286

50

50

-300

0

-14.286

-10


According to the above table, the inventory turnover of Bonia has been much lower in contrast to Amtek, it could be stated that the former has higher market demand. Both the organisations are keeping their debt burden under control, as majority of the funds are generated through equity (Frino, Hill and Chen 2015). In terms of profitability, Bonia has the upper hand over Amtek, as the former has higher amount of sales due to better quality products and services. However, it has been maintaining high level of inventory compared to market demand. Hence, the liquidity position of Bonia is not effective. Finally, Bonia is a better alternative for the investors due to its probability of higher return in future.

Off-balance sheet and other relevant information:

  • Decline in the growth rate of Malaysian economy resulting in weak external environment
  • Continual decline in net exports has lowered down the value of stocks of Bonia in the Malaysian market (Haron 2014)
  • Closure of Bonia outlets that have not performed efficiently and weakened consumer sentiments

Conclusion

From the above discussion, it has been evaluated that despite Bonia has been maintaining competitive edge over Amtek in the Malaysian fashion industry, the former is struggling to maintain adequate financial position in the market. The reasons identified behind such trend include the slow progress of the Malaysian economy and faking customer demand. Therefore, Bonia is suggested to come up with new and innovative products for increasing its overall sales. In addition, reducing the amount of inventory level and recovering amount from the debtors within shorter timeframe would help the organisation to maintain its liquidity position adequately in the market.

References:

Bonia.com. (2017). BONIA Official Website | Shop Online BONIA. [online] Available at: https://www.bonia.com/ [Accessed 7 Apr. 2017].

Frino, A., Hill, A. and Chen, Z., 2015. Introduction to corporate finance. Pearson Higher Education AU. 

Haron, R., 2014. Capital structure inconclusiveness: evidence from Malaysia, Thailand and Singapore. International Journal of Managerial Finance, 10(1), pp.23-38. 

Ramezanalivaloujerdi, R., Rasiah, D. and Narayanasamy, K., 2015. Corporate Capital Structure and Performance of Listed Construction Companies in Malaysia from 2005-2009. International Business Management, 9(3), pp.191-199. 

This problem has been solved.


Please send an Email to help@urgenthomework.com with the Payment ID and the link to the document to collect by email


Cite This work.

To export a reference to this article please select a referencing stye below.

Urgent Homework (2022) . Retrive from https://www.urgenthomework.com/sample-homework/bfw2140-corporate-finance-statements-of-bonia-corporation

"." Urgent Homework ,2022, https://www.urgenthomework.com/sample-homework/bfw2140-corporate-finance-statements-of-bonia-corporation

Urgent Homework (2022) . Available from: https://www.urgenthomework.com/sample-homework/bfw2140-corporate-finance-statements-of-bonia-corporation

[Accessed 30/09/2022].

Urgent Homework . ''(Urgent Homework ,2022) https://www.urgenthomework.com/sample-homework/bfw2140-corporate-finance-statements-of-bonia-corporation accessed 30/09/2022.

Answer:

Introduction:

The current assignment aims to evaluate the trends in the financial statements of Bonia Corporation Berhad, which has been selected as the organisation. The organisation is one of the leading retailers in Malaysia and Amtek Holdings Berhad has been chosen as its competitor. Thus, the financial performance of the organisation has been evaluated by considering the data of the past four years with that of the competitor. In addition, the off-balance sheet and other pertinent information related to Bonia Corporation Berhad have been briefly illustrated.

Trend analysis in financial statements of Bonia Corporation Berhad:

In order to conduct the trend analysis of the financial statements of Bonia Corporation Borhad, the percentage change in each year has been conducted (Refer to Appendices, Appendix 1, Appendix 2 and Appendix 3).

Trend in income statement:

From the evaluation of the income statement, it has been observed that the revenue margin of the organisation has declined sharply, while the cost of sales has increased largely in 2016. As a result, the net income of Bonia Corporation Berhad has declined largely in 2016.

Trend in balance sheet statement:

According to the balance sheet statement of the organisation, the overall asset base of the organisation has not increased in comparison to the overall liability base of the organisation (Bonia.com 2017). This depicts that the organisation has not been able to generate sufficient returns from assets and as a result, the debt burden of the organisation has increased further in the Malaysian market (Ramezanalivaloujerdi, Rasiah and Narayanasamy 2015).

Trend in cash flow statement:

According to the cash flow statement, the net cash generated from operating activities has increased largely. The net cash from financing and investment activities have increased as well; however, the realisation from operating activities has been higher in 2016. As a result, it has increased the cash balance of Bonia Corporation Borhad in 2016.

Performance of the organisation through various ratios:

Particulars

 

Bonia Corporation Berhad

Amtek Holdings Berhad

Details

2013

2014

2015

2016

2013

2014

2015

2016

Revenue

A

632

692

695

665

47

39

40

32

Cost of revenue

B

247

269

285

299

26

19

22

18

Gross profit

C

386

422

411

366

21

20

18

14

Net Profit

D

41

55

45

25

-1

0

-4

-3

Inventory

E

110

145

154

149

20

22

25

15

Non-current liabilities

F

78

131

131

154

0

4

3

3

Equity

G

302

346

388

406

25

25

24

21

Current assets

H

292

327

370

371

46

45

44

36

Current liabilities

I

113

135

146

149

26

26

24

21

Market value per share

J

5

5

3

1.5

3

1

1

0.5

Earnings per share

K

0.05

0.07

0.06

0.03

-0.01

0

-0.07

-0.05

Inventory turnover

365/(B/E)

162.55

196.75

197.23

181.89

280.77

422.63

414.77

304.17

Debt-to-equity

F/G

0.26

0.38

0.34

0.38

0.00

0.16

0.13

0.14

Gross margin

C/A

61.08%

60.98%

59.14%

55.04%

44.68%

51.28%

45.00%

43.75%

Net margin

D/A

6.49%

7.95%

6.47%

3.76%

-2.13%

0.00%

-10.00%

-9.38%

Current ratio

H/I

2.58

2.42

2.53

2.49

1.77

1.73

1.83

1.71

Quick ratio

(H-E)/I

1.61

1.35

1.48

1.49

1.00

0.88

0.79

1.00

Price/earnings ratio

J/K

100

71.4286

50

50

-300

0

-14.286

-10


According to the above table, the inventory turnover of Bonia has been much lower in contrast to Amtek, it could be stated that the former has higher market demand. Both the organisations are keeping their debt burden under control, as majority of the funds are generated through equity (Frino, Hill and Chen 2015). In terms of profitability, Bonia has the upper hand over Amtek, as the former has higher amount of sales due to better quality products and services. However, it has been maintaining high level of inventory compared to market demand. Hence, the liquidity position of Bonia is not effective. Finally, Bonia is a better alternative for the investors due to its probability of higher return in future.

Off-balance sheet and other relevant information:

  • Decline in the growth rate of Malaysian economy resulting in weak external environment
  • Continual decline in net exports has lowered down the value of stocks of Bonia in the Malaysian market (Haron 2014)
  • Closure of Bonia outlets that have not performed efficiently and weakened consumer sentiments

Conclusion

From the above discussion, it has been evaluated that despite Bonia has been maintaining competitive edge over Amtek in the Malaysian fashion industry, the former is struggling to maintain adequate financial position in the market. The reasons identified behind such trend include the slow progress of the Malaysian economy and faking customer demand. Therefore, Bonia is suggested to come up with new and innovative products for increasing its overall sales. In addition, reducing the amount of inventory level and recovering amount from the debtors within shorter timeframe would help the organisation to maintain its liquidity position adequately in the market.

References:

Bonia.com. (2017). BONIA Official Website | Shop Online BONIA. [online] Available at: https://www.bonia.com/ [Accessed 7 Apr. 2017].

Frino, A., Hill, A. and Chen, Z., 2015. Introduction to corporate finance. Pearson Higher Education AU. 

Haron, R., 2014. Capital structure inconclusiveness: evidence from Malaysia, Thailand and Singapore. International Journal of Managerial Finance, 10(1), pp.23-38. 

Ramezanalivaloujerdi, R., Rasiah, D. and Narayanasamy, K., 2015. Corporate Capital Structure and Performance of Listed Construction Companies in Malaysia from 2005-2009. International Business Management, 9(3), pp.191-199. 

This problem has been solved.


Please send an Email to help@urgenthomework.com with the Payment ID and the link to the document to collect by email


Cite This work.

To export a reference to this article please select a referencing stye below.

Urgent Homework (2022) . Retrive from https://www.urgenthomework.com/sample-homework/bfw2140-corporate-finance-statements-of-bonia-corporation

"." Urgent Homework ,2022, https://www.urgenthomework.com/sample-homework/bfw2140-corporate-finance-statements-of-bonia-corporation

Urgent Homework (2022) . Available from: https://www.urgenthomework.com/sample-homework/bfw2140-corporate-finance-statements-of-bonia-corporation

[Accessed 30/09/2022].

Urgent Homework . ''(Urgent Homework ,2022) https://www.urgenthomework.com/sample-homework/bfw2140-corporate-finance-statements-of-bonia-corporation accessed 30/09/2022.


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