Its all about Carlsberg,

1. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis
Foundation in Natural and Built Environments
Basic Accounting [ACC 30205]
Financial Ratio Analysis
Carlsberg Brewery Malaysia Berhad
Group Members:
Pang Khai Shuen 0318423
Hor Weng Lim 0319441
Aaron Ngu Nguok Soon 0319396

2. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis
A Brief History of Carlsberg
Carlsberg was founded by J. C. Jacobsen in 1847. The first brewery was built at
Copenhagen, Denmark. In 1868, Carlsberg exported its first beer to Edinburgh, England.
When J. C. Jacobsen died in 1887, the company was taken over by Gamle Carlsberg, In
1939, 55% of beers imported into the United Kingdom was Carlsberg. Carlsberg beer was
brewed for the first time outside Denmark in 1966. The first brewery built outside
Denmark was in Blantyre, Malawi in 1968. Carlsberg also bought Tuborg in 1970, and
merged with Tetley in 1992. In 2008, Carlsberg Group, together with Heineken, bought
the largest brewer in UK - Scottish & Newcastle - for US$ 15.3 billion.
The Carlsberg Group divide their operation into 3 regions, namely Northern & Western
Europe, Eastern Europe, and Asia. According to its annual report in 2013, the operating
profit generated from these regions are: 5.3 billion in Western Europe, 4.1 billion in
Eastern Europe, and 1.9 billion in Asia.

3. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis
Carlsberg Brewery Malaysia Berhad was incorporated in December 1969. After being
listed in Bursa Malaysia in 1971 under the consumer products sector, the group began
brewing Carlsberg Green Label beer locally in 1972. Today, the group has approximately
42% of the Malaysian beer and stout market (2012). Carlsberg Green label beer is the
best selling brand in the country and “accounts for the bulk of the group’s beer sales.”
(2012).
The group has investments in Sri Lanka and Singapore. It’s subsidaries and associates
include Carlsberg Singapore, Carlsberg Marketing, Luen Heng F&B, Carls Distributors
Taiwan Ltd and Lion Brew (Ceylon).
Since 2007, Carlsberg has expanded its brand portfolio by introducing more brands. For
instance, Carlsberg Gold, Hoegaarden and Asahi Super Dry.
In 2009, the Group purchased Carlsberg Singapore Pte. Ltd. From Carlsberg Breweries
A/S for 370M in cash (2012).

4. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis
PROFITABILITY RATIOS
Profitability
Ratios 2012 2013
Return on
Equity (ROE)
Net Profit
Average O/E
Profit of the year 2012
Average O/E
193753
298115
= 64.99%
Net Profit
Average O/E
Profit of the year 2013
Average O/E
186620
295557
= 63.14%
Net Profit
Margin
(NPM)
Net Profit
Net Sales
Profit of the year 2012
Revenue
193753
1584780
= 12.22%
Net Profit
Net Sales
Profit of the tear 2013
Revenue
186620
1555149
= 12%
Gross Profit
Margin
(GPM)
Gross Profit
Net Sales
Gross Profit
Revenue
579548
1584780
= 36.57%
Gross Profit
Net Sales
Gross Profit
Revenue
570766
1555149
= 36.7%
Selling
Expenses
Ratio (SER)
Total Selling Expenses
Net Sales
Sales & Distribution Exp.
Revenue
295795
1584780
= 18.66%
Total Selling Expenses
Net Sales
Sales & Distribution Exp.
Revenue
289070
1555149
= 18.59%
General
Expenses
Ratio (GER)
Total General Expenses
Net Sales
Administrative & Other Exp.
Revenue
42256+2980
1584780
= 2.85%
Total General Expenses
Net Sales
Administrative & Other Exp.
Revenue
44920+3563
1555149
= 3.12%
Financial
Expenses
Ratio (GER)
Total Financial Expenses
Net Sales
Finance Cost
Revenue
4971
1584780
= 0.31%
Total Financial Expenses
Net Sales
Finance Cost
Revenue
5318
1555149
= 0.34%
x 100%
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x 100% x 100%

5. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis
PROFITABILITY RATIOS INTERPRETATION
Return on Equity (ROE)
During the year 2012-2013 period, the business Return of Equity (ROE) has decreased
from 64.99% to 63.14%. This means that Carlsberg is getting slightly less return from the
capital than last year.
Net Profit Margin (NPM)
During the year 2012-2013 period, the business Net Profit Margin (NPM) has decreased
from 12.22% to 12%. This means that the business of is getting worse at controlling its
overall expenses.
Gross Profit Margin (GPM)
During the year 2012-2013 period, the business Gross Profit Margin (GPM) has increased
from 36.57% to 36.7%. This means that the business is getting better at controlling its
Cost of Goods Sold expenses.
Selling Expenses Ratio (SER)
During the year 2012-2013 period, the business Selling Expenses Ratio (SER) has
decreased from 18.66% to 18.59%. This means that the business is getting better at
controlling its selling expenses.

6. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis
General Expenses Ratio (GER)
During the year 2012-2013 period, the business General Expenses Ratio (GER) has
increased from 2.85% to 3.12%. This means that the business is getting worse at
controlling its general expenses.
Financial Expenses Ratio (FER)
During the year 2012-2013 period, the business Financial Expenses Ratio (FER) has
increased from 0.31% to 0.34%. This means that the business is getting worse at
controlling its financial expenses.

7. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis
FINANCE STABILITY RATIOS
Financial
Stability
Ratios
2012 2013
Working
Capital Ratio
(WCR)
Total Current Assets
Total Current Liabilities
365436
241644
= 1.51 : 1
Total Current Assets
Total Current Liabilities
381810
295687
= 1.29 : 1
Total Debt
Ratio (TDR)
Total Liabilities
Total Assets
262284
569150
= 46.08%
Total Liabilities
Total Assets
312763
597011
= 52.39%
Stock
Turnover
Ratio (STR)
Cost of Goods Sold
Average Inventory
Cost of Sales
Inventory 2011-2012
1005232
54689
= 19.9 Days
Cost of Goods Sold
Average Inventory
Cost of Sales
Inventory 2012-2013
984383
48273.5
= 17.9 Days
Debtor
Turnover
Ratio (DTR)
Credit Sales
Average Debts
Trade Receivable
Average Trade Payable
215469
148760
= 252 Days
Credit Sales
Average Debts
Trade Receivable
Average Trade Payable
222113
156216.5
= 256.71 Days
Interest
Coverage
Ratio (ICR)
Interest Expenses + Net Profit
Interest Expenses
Finance Cost + Profit of year 2012
Finance Cost
4971 + 193753
4971
= 39.98 Times
Interest Expenses + Net Profit
Interest Expenses
Finance Cost + Profit of year 2013
Finance Cost
5318 + 186620
5318
= 36.1 Times
365 Days ÷
365 Days ÷
365 Days ÷
365 Days ÷
365 Days ÷
365 Days ÷
365 Days ÷
365 Days ÷
365 Days ÷
365 Days ÷
365 Days ÷
365 Days ÷
x 100% x 100%

8. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis
FINANCIAL STABILITY RATIOS INTERPRETATION
Working Capital Ratio (WCR)
During the year 2012-2013 period, the business Working Capital Ratio (WCR) has
decreased from 1.51 : 1 to 1.29 : 1. This means that the business ability to pay its current
liabilities is getting worse. In addition, it does not satisfied the minimum requirement of
2 : 1.
Total Debt Ratio (TDR)
During the year 2012-2013 period, the business Total Debt Ratio (TDR) has increased
from 46.08% to 52.39%. This means that the business total debt has increased. In addition,
it has gone over the maximum limit 50%.
Stock Turnover Ratio (STR)
During the year 2012-2013 period, the business Stock Turnover Ratio (STR) has
decreased from 19.9 days to 17.9 days. This means that the business is getting faster at
selling their goods.
Debtor Turnover Ratio (DTR)
During the year 2012-2013 period, the business Debtor Turnover ratio (DTR) has
increased from 252 days to 256.71 days. This means that the business is getting slower in
collecting its debts.

9. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis
Interest Coverage Ratio (ICR)
During the year 2012-2013 period, the business Interest Coverage Ratio (ICR) has
decreased from 39.98 times to 36.1 times. This means that the business ability to pay its
interest has become better. In addition, it satisfied the minimum requirement of 5 times.
PRICE/EARNINGS RATIO
Current share price
Earnings per share
= RM 12.02
RM 0.60
= 20.03 Years
This means that shareholders have to wait 20 years to claim back the money they
invested.

10. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis
INVESTMENT RECOMMENDATION
Overall, the financial ratios of Carlsberg Brewery Malaysia Berhad is satisfying. Its
Profitability Ratios are more or less stable, and any negative changes are minute.
For the Financial Stability Ratios, other than the Working Capital Ratio that has
decreased, other ratios remain stable. Moreover, it’s Interest Coverage Ratio is very
satisfying, scoring at 36 times compared to the minimum or 5 times.
However, the P/E Ratio of Carlsberg Brewery Malaysia Berhad is about 20 years, which
is not a very good figure for shareholders.
Based on the overall aspects, we do not recommend to invest into Carlsberg Brewery
Malaysia Berhad, because even though the majority of aspects in Profitability Ratio and
Financial Stability Ratio are stable, its P/E Ratio is 20 years, which is a very long time to
wait in order for a share buyer to earn profit.

11. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis
APPENDIX:

12. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis

13. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis

14. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis

15. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis

16. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis

17. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis

18. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis

19. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis
Price Per Share - Yahoo Finance (Retreived 12th
January 2015)

20. Taylor’s University | FNBE April 2014 | Basic Accounting (ACC 30205) | Financial Ratio Analysis
References:
1) Stock Performance Guide Malaysia. (2012). Malaysia: Dynaquest Sdn. Bhd.
2) Carlsberg A/S Annual Report 2013. (n.d). Retrieved December 30, 2014 from
http://www.carlsberggroup.com/investor/downloadcentre/Documents/Annual%20Report/
Carlsberg%20Group%20Annual%20Report%202013.pdf
3) Carlsberg Group. (n.d). Heritage. [online] Available at:
<http://www.carlsberggroup.com/Company/heritage/Pages/default.aspx> [Accessed 31
December 2014]
4) Carlsberg Malaysia. 2012. Carlsberg Malaysia. [online] Available at:
<http://carlsbergmalaysia.com.my/web/company/cm_carlsbergmsia.aspx> [Accessed 31
December 2014]
5) Wikipedia. 2014. Carlsberg Group. [online] (Updated 5 December 2014) Available at:
<en.wikipedia.org/wiki/Carlsberg_Group> [Accessed 29 December 2014]
6) Annual Report 2012. (n.d). Carlsberg Malaysia. Retreived 26 December 2014 from
http://carlsbergmalaysia.com.my/web/investor/in_annualreport2012.aspx
7) Annual Report 2013. (n.d). Carlsberg Malaysia. Retreived 26 December 2014 from
http://carlsbergmalaysia.com.my/web/investor/in_annualreport2013.aspx
8) Yahoo Finance. 2014. Carlsberg Brewery Malaysia Bhd. [online] Available at:
<chttp://finance.yahoo.com/q?uhb=uh3_finance_vert_gs_ctrl2&fr=&type=2button&s=28
36.KL%2C> [Accessed 12 January 2015]