FNBE MARCH 2015

1. 1
BASIC ACCOUNTING
ASSIGNMENT:
FINANCIAL RATIO REPORT
Lecturer: Ms. Tay Shir Men
Group Members:
Kimberley Fay Bernard Lo (0324237)
Kok Ka Shing (0323553)
Pui Chun Shian (0323470)
Adam Wong (0322520)

2. 2
Contents
No. Content PageNo
1. History of LBS Berhad 3
2. Recent Development 4-5
3. Profitability Ratio 6-7
4. Financial Stability Ratio 8-9
5. Price Earning Ratio 10
6. Report 11-12
7. Investment Recommendation 13
8. Appendix 14-21
9. Reference 22

3. 3
Brief history of LBS
LBS Bina Group Berhad is a Malaysian based company that specialises in construction and
property development. The company was founded in 29th June 2000 by Dato’ Seri Lim Bock
Seng. The company made its debut on the Main Board of the Kuala Lumpur Stock Exchange
(KLSE) also known as Bursa Malaysia on 30th January 2002. Its headquarters is located in
Petaling Jaya, Malaysia. LBS operates in a few segments, most notable in property
development, management & investment, trading & others, construction, and racing
circuit. The Construction segment undertakes in the building, project planning and
implementation contracting activities. The management & investment part handles
investment holding and provision of management services. Trading & others focuses on
trading building materials and the selling of membership and covering insurance products.
Tan Seri Lim Bock Seng Company’s motto:
- Chairman of LBS Bina Group - BELIEVE
- BECOME
- BEHOLD

4. 4
Most Recent Developments
D’ Island Residence – Corallia
The company’s most recent development. 3968 sq.ft with a lofty 14-feet ceiling. Consists of 5
bedrooms, 1 utility and 6 bathrooms. Currently has 86 units.
High Rise – Bandar Saujana Putra
A lifestyle-focused development with over 70 amazing facilities. Still currently in development
phase by Utuh Sejagat Sdn. Bhd with an area of 21.14 acres. Expected date of completion is
within 4 years.

5. 5
Rumah Selangorku BSP Bayuan Mas
LBS launched this project mainly to help lower and middle income earners to own houses at
reasonable prices. This project was in line with the state government’s commitment to build
more affordable homes in Selangor.
D’ Island Residence – SkyVilla
It is a 17 storey building with 2 blocks and a total of 352 units only. Built up in a range from
1026-1218 square ft. Has a spacious living environment equipped with panoramic view of
township and waterfront.

6. 6
ProfitabilityRatio
Profitability Ratio 2012 2013 Interpretation
Return on Equity
(ROE)
39003430
516690656
X100%
=7.5%
397323654
699735858
X100%
= 56.78%
Higher ROE in the
year 2013 compared
to 2012 shows that
the business, LBS is
earning higher
returns of capital in
2013.
Net Profit Margin
(NPM)
39003430
509644355
X100%
= 7.65%
397323654
533532722
X100%
= 74.47%
An increase in NPM
for the year 2013 is
a positive sign and it
indicates that LBS
kept its expenses
lower compared to
the year 2012. Thus,
this gives the
business more profit
for 2013. Other than
that, this shows that
LBS controlled their
overall expenses
better in 2013.
Gross Profit Margin
(GPM)
146227906
509644355
X100%
= 28.69%
168577154
533532722
X100%
= 31.59%
This shows LBS’
ability to control
their COGS
expenses. A higher
GPM means that the
expenses is better
managed. The COGS
expenses are well
managed in 2013
resulting in a higher
GPM.
General Expenses
Ratio (GER)
67470147
509644355
85596945
533532722
The year 2013 shows
that the GER is
higher compared to
2012. A higher

7. 7
X100%
= 13.24%
X100%
= 16%
general expense
would result a lower
NPM.
Financial Expenses
Ratio (FER)
18457247
509644355
X100%
= 3.62%
15170850
533532722
X100%
= 2.84%
FER in the year 2013
is lower than 2012.
This indicates that
the financial expense
in 2013 is lesser than
2012. As such, this
leads to a higher
NPM in 2013
because the financial
expense is lower.

8. 8
Financial StabilityRatio
Stability Ratio 2012 2013 Interpretation
Working Capital
Ratio (WCR)
927829389
520720661
= 1.8 : 1
925492766
609599483
= 1.5 : 1
For every RM1 of
current liability in
the year 2013, the
business, LBS has 1.5
of current assets to
pay for it. It has a
lower ratio than
2012. However, a
business should
preferably have a
minimum of 2:1 of
current assets to
current liability to
ensure that the
business does not
face difficulties.
Total Debt Ratio
(TDR)
908176834
1435008317
X100%
=63.29%
1137172437
2009812670
X100%
=56.58%
For 2013, the TDR is
lower than 2012,
having a TDR of
56.58% and 63.29%
respectively. As the
TDR is lower in 2013,
this results in a
higher amount of
owner’s equity. It is
strongly advised that
a business’ TDR does
not exceed more
than 50% as it would
have a higher risk of
bankruptcy.
Inventory Turnover
Ratio (ITR)
365 ÷
363416449
15721777
365÷
364955568
18084313
It takes 18 days for
the business in 2013
to sell one batch of
goods. The business
in 2013 cannot sell
goods rapidly,

9. 9
=15 days = 18 days generating more
cash quickly to pay
off its liabilities.
Interest Coverage
Ratio (ICR)
57460677
18457247
=3.1 times
412494504
15170850
=27 times
LBS’ ICR is higher in
2013 than in 2012.
This means that the
business’ ability to
pay off its interest
expense in higher
than 2012. In the
year 2013, LBS has
enough profit to pay
its interest expenses
27 times. To avoid
bankruptcy, a
business’ interest
coverage should not
fall below 5 times.

10. 10
Price EarningRatio (P/E Ratio)
2012
Basic earnings per share: 0.097
Current share price: 0.84
(0.84/0.097) = 8.6 times
2013
Basic earnings per share: 0.96
Current share price: 1.56
(1.56/0.96) = 1.62 times
The P/E ratio measures how expensive a share is. In the year 2012, the P/E ratio is 8.6 while
in the year 2013 the P/E ratio is 1.62. This means that the share in 2012 is less expensive
compared to the share in the year 2013. A P/E ratio of 8.6 indicates that an investor will
need to wait for 8.6 years to recoup his investment.

11. 11
Report
The graph above represents the share price of LBS Bina Group for 1st January 2015 to 31st
December 2015 and the index for FTSE Bursa Malaysia (KLCI). Both of the graphs were taken
from the website Yahoo Finance. The highest point in LBS Bina Group’s shares was on the
19th May 2015 at 1.68 and the lowest point was on 1st September 2015 at 1.28. The highest
point in the index for FTSE Bursa Malaysia (KLCI) was on 21st April 2015 at 1862.80 points
and the lowest point was on 24th August 2015 at 1532.14 points.

12. 12
Before we determine whether we should invest in LBS Bina Group’s shares, we should look
into both the company and the overall market shares of KLCI to see if it is worth investing in
the company’s shares. Hence, we have picked 3 points in time from both the graph will be
viewed to determine to performance of the company.
The first point in LBS Bina Group’s shares is in 1st April 2015 is 1.50 and the index for FTSE
Bursa Malaysia (KLCI) is 1826.31 points. At 5th May 2015 the share price raised to 1.56 for
and the index also rose to 1827.42 points. The increase in share price is (1.56-
1.50)/1.50=0.0400%, while the index change is (1827.42-1826.31)/1826.31=0.0006%. This
means that the company is outperforming the index at this point of time.
The second point in LBS Bina Group's shares is in 3rd August 2015 is 1.49, while the index for
FTSE Bursa Malaysia (KLCI) is 1744.19 points. At 1st September 2015 the company’s share
price dropped to 1.28, whereas the index also fell to 1609.21 points. The decrease in share
price is (1.28-1.49)/1.49=-0.1409% and the index change is (1609.21-1744.19)/1744.19=-
0.0774%. This means even though the company’s share price fell, it is still performing better
than the index.
The third and last point in LBS Bina Group’s shares is in 2nd November 2015 is 1.44 and the
index for FTSE Bursa Malaysia (KLCI) is at 1664.07. At 1st December 2015 the company’s
share price dropped to 1.37, whereas the index rose to 1682.37 points. The decrease in
share price is (1.37-1.44)/1.44=-0.0486% and the index change is (1682.37-
1664.07)/1664.07=0.0109%. This shows that the company is doing badly when the index is
performing well.
In conclusion, by comparing the company’s performance against the overall index, investing
in the shares of LBS Bina Group in the year 2015 is recommended but there is a slight risk in
investing in the company’s shares as the graph is sometimes unstable. Even though it
fluctuates sometimes, it will be better after a certain amount of time.

13. 13
Investment Recommendation
According to LBS’s profitability ratio, the return on equity (ROE), net profit margin
(NPM), gross profit margin (GPM) and General Expenses ratio (GER) has improved and
showed positive signs for the business. Even though Financial expenses ratio (FER) increase
from the year 2012 to the year 2013, the overall profit has indicated that the business is
doing fairly well. LBS’s ability to pay off its current liabilities had slightly decreased from
1.8:1 to 1:5:1 but it still did not satisfy the 2:1 ratio of staying within the borderline of
borrowing. Besides that, LBS’s total debt ratio (TDR) showed that its total debt has
decreased by 6.71%, making it 56.58% in 2013. Having the TDR above 50% is making the
business at a higher risk of bankruptcy which isn’t a good sign at all. Their stock turnover has
taken a longer period of time so they are taking a longer time to generate cash, slowing
down the business from paying off its liabilities. Moreover, LBS’s interest coverage ratio
(ICR) has also shown an improvement in the business’ ability to pay its interest expense.
LBS earned more profit in 2013 compared to 2012. In other words, the company has
demonstrated a decent profitability and financial stability and its shares are available at a
cheap price (P/E Ratio < 15) to warrant an investment. An investor will only need to wait for
a short period of time that is 1.62 years (19.44 months) as of 2013 to recoup his investment.
The company has shown good promise in terms of their growth in revenue. As such, LBS has
proven to be a stable company. So, LBS’s share is worth to invest back then.
In 2014 to 2015, the graph from LBS the business is earning profit. However, it isn’t
earning as much profit as it had earned in 2013. Even with that, LBS is still recommended to
invest in now based on the graph from 2014 to 2015.

14. 14
Appendix
Consolidated of Financial Statement (2012)

15. 15

16. 16

17. 17

18. 18
Consolidated Statement of Comprehensive Income (2012)

19. 19
Consolidated of Financial Statement (2013)

20. 20

21. 21
Consolidated Statement of Comprehensive Income (2012)

22. 22
Reference
1. LBS: 2012 Reports. (n.d.). Retrieved February 03, 2016, from
http://www.lbs.com.my/investor-relations/financial-reports/2012/
2. LBS: 2013 Reports. (n.d.). Retrieved February 03, 2016, from
http://www.lbs.com.my/investor-relations/financial-reports/2013/
3. LBS: About Us. (n.d.). Retrieved February 03, 2016, from
http://www.lbs.com.my/about-us/
4. LBS: Latest Launches. (n.d.). Retrieved February 03, 2016, from
http://www.lbs.com.my/property-collections/latest-launches/
5. ^KLSE Interactive Stock Chart | Yahoo! Inc. Stock - Yahoo! Finance. (n.d.). Retrieved
February 03, 2016, from http://finance.yahoo.com/echarts?s=^KLSE
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