EVALUATION OF FINANCIAL PERFORMANCE

COMPANYS NAME : DUTCH LADY

1) LIQUIDITY RATIOS

a) Current Ratio :

Current Asset
Current Liabilities

2013

2012

RM 337,728
RM 322,768

RM 329,199
RM 182,475

= 1.52 times (UF)

= 1.80 times (F)

From the above calculation, we can conclude that the company's current ratio of
1.52 times which in 2013 is lower than the previous year current ratio of 1.80
times in year 2012. This is meant by in 2012 the current ratio is better than 2013
because it has more current assets to cover its current liabilities.

b) Acid -test ratio : Current Asset - Inventory - Prepaid Expenses

Current Liabilities

2013

2012

RM 337,728 - RM 113,208 - RM 583

RM 222,768

RM 329,199 - RM86,781 - RM 709

RM 182,475

= 1.01 Times

= 1.32 times

This ratio indicates whether a firm has enough current assets to cover its current
liabilities without selling inventory. As for Dutch Lady, we can conclude that in
the year 2012 has no problem to pay its current liabilities which is 1.32 times
compared to the year of 2013 that is 1.01 times.

2) EFFICIENCY RATIO

a) Inventory Turnover Ratio : Cost of Goods Sold

Average / Closing stock

2013
RM 608,738
RM 113,208

2012
RM 535,475
RM 86,781

= 5.04 Times

= 6.17 Times

The company shows that their stock is high sold and replaced in the year 2012
with the ratio of 6.17 times while in 2013 with the ratio of 5.04 times for every
RM 1.00.

b) Average Collection Period : Account Receivable

Annual credit sales/ 360 day

2013
RM 35,482
RM 982,686 / 360

2012
RM36,865
RM 882,179 / 360

= 1.0 day

= 1.16 day

*In our illustration, this company not taking too much time to collect its
receivables in 2013 which is 1.0 day only as compared to 2012 that is 1.16 days.
In this case, its indicates that the company is able to collect its account receivables
much better in 2013 than the average collection period in 2012.

c) Fixed Asset Turnover :

Sales
Net Fixed Assets

2013
RM 982,686
RM 78,733

2012
RM 882,179
RM 74,264

= 12.48 times

= 11.88 times

From the above figure, we can conclude that the firm is utilizing its assets
efficiently in the year 2013 with the ratio of 12.48 times, meanwhile with only
11.88 times in the previous year for every RM 1.00.

d) Total Assets Turnover : Sales

Total Assets

2013
RM 982,686
RM 416,461

2012
RM 882,179
RM 403,463

= 2.36 times

= 2.19 times

The ratio above shows that in 2013 is 0.17 times higher than in 2012 which is 2.36
times compared to 2012, 2.19 times. This ratio indicates that in 2013, Dutch Lady
is generating higher volume sales with the given amount of assets. A lower ratio
means that the company need to increase its sales.

3) LEVERAGE RATIO / GEARING RATIO

a) Debt Ratio :

Total Debt
Total Assets

2013
RM 5,695 + RM 222,768
RM 416,461

2012
RM 4,854 + RM 182,475
RM 403,463

= 54.86% (UF)

= 46.43% (F)

In 2012, Dutch Lady has lower borrowings whereas the ratio states 46.43% as
compared to 2013 (54.86%).Approximately, with a raise of 8% of its assets are
financed by debt, while the remainder are financed using shareholder's equity.

b) Debt To Equity Ratio : Total Debt

Total Equity

2013
RM 228,463
RM 187,998

2012
RM 187,329
RM 216,134

= 121.52% (UF)

= 86.67% (F)

The Debt to Equity Ratio measure the percentage of borrowing used compared
with total equity. For the ratio above, in 2012 (86.67%) Dutch Lady used more
equity and less borrowings as the source of financing. While in 2013, Dutch Lady
used less equity and it shows that 2012 is better than 2013.

c) Times Interest Earned: Earnings before interest & tax

Interest Expenses

2013
RM 186,674
RM 5,788

2012
RM 165,801
RM 6,056

= 32.25 times (F)

= 27.38 times (UF)

Times Interest earned measures the company's ability to cover its interest charges
out of its operating profits. In 2013, the interest earned is much more higher and
this is meant by the company ability to fulfil interest obligations compared to
2012 (27.38)

PROFITABILITY RATIO

a) Gross Profit Margin:

Gross Profit
Sales

2013
RM 373,948
RM 982,686

2012
RM 346,704
RM 882,179

= 38.05% (UF)

= 39.30% (F)

The differences of gross profit margin between the years 2012 to 2013 is 1.25%. It
shows the efficiency of the company in controlling its cost of goods sold is better
in 2012 compared to 2013. A ratio of 39.30% means that the company is making
RM0.3903 gross profit for every RM1 of sale made.

b) Operating Profit Margin: Earnings before interest and tax

Sales

2013
RM 184,202
RM 982,686

2012
RM 162,607
RM 882,179

= 18.74%

= 18.43%

In this case, Dutch Lady is making lower operating profits in the year 2012 which
is 18.43% than in the year 2013 whereas the percentage is 18.74%. It indicates
that in 2013 is slightly higher than the previous year and means that 2013 is better
in order to gain the operating profit.

c) Net Profit Margin: Net Profit after Tax - Dividend Preference Share

x100

Sales

2013
RM 138,264
RM 982,686

2012
RM 123,380
RM 882,179

= 14.07%

= 13.99%

Since the year 2012 has a lower firm's leverage that 2013, its low net profit margin
is basically due to higher operating expenses.

d) Return on Assets:

Net Profit After Tax - Dividend Preference Share

x100

Total Sales

2013
RM 138,264
RM 416,461

2012
RM 123,380
RM 403,463

= 94.40%

= 30.58%

It indicates the management's ability to make profits from the firm investments in
assets. In 2013, Dutch Lady shows a slightly higher than in 2012.

e) Return on Equity: Net Profit after Tax - Dividend Preference Share

x100

Common Equity

2013
RM 138,264
RM 187,998

2012
RM 123,380
RM 216,134

= 73.55%

= 57.08%

Return on equity is used to measure the profit earned by the common stockholders
from their investments in the company. In this case, in 2013 the company has a
higher return on profit with 73.55% compared to 2012 with on 57.08%.