This document provides an analysis of the financial ratios and performance of Spritzer Berhad, a bottled water producer in Malaysia, for the years 2013-2014. Key ratios calculated include return on equity, net profit margin, gross profit margin, selling expenses ratio, general expenses ratio, financial expenses ratio, working capital ratio, total debt ratio, stock turnover, debtor turnover, and interest coverage. Overall, the analysis found that Spritzer's profitability increased from 2013-2014 as seen by higher return on equity and gross profit margin, while expenses were generally better controlled. However, net profit margin declined slightly. The document also examines Spritzer's share price to earnings ratio and provides an investment recommendation.

1. TAYLOR’S UNIVERSITY | SABD | FNBE | BASIC ACCOUNTING
SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN
Foundation in Natural & Built Environment (FNBE)
TOPIC: FINANCIAL RATIO ANALYSIS
Group Members: 1. Nabila Hanim binti Salleh@Man (0321368)
2. Nadhirah binti Mohd Zain (0321366)
3. Nur Azreen binti Samiu (0321370)
Subject :Basic Accounting (FNBE0145)
Lecturer : Mr. Chang Jau Ho
Submission Date: 4th
June 2015

2. TAYLOR’S UNIVERSITY | SABD | FNBE | BASIC ACCOUNTING
Table Of Content
Content Page
Company Background 2
Accounting Report Data 3
Ratio Analysis : Calculation 5
Ratio Analysis : Interpretation 9
P/E ratio 11
Investment Recommendation 12
Appendix 13
Reference 21

3. TAYLOR’S UNIVERSITY | SABD | FNBE | BASIC ACCOUNTING
Company Background
Spritzer is the largest bottled water producer in Malaysia. Spritzer Berhad was founded
by Datuk Lim Kok Boon in 1989. He started to bottle mineral water in a small set-up in Taiping,
Perak. On 26 May 1993, Spritzer was incorporated as a private limited company as Spritzer
Sdn Bhd before the Company was converted into a public limited company on 11 July 1994 as
Spritzer Bhd. Spritzer Bhd was listed on the 2nd Board of the Kuala Lumpur Stock Exchange. It
is also an investment holding company and on 1 September 2000, Spritzer was listed on Bursa
Malaysia.
Spritzer Bhd Group also consists of six wholly-owned subsidiary companies which are
Chuan Sin Sdn Bhd, Golden PET Industries Sdn Bhd, Chuan Sin Cactus Sdn Bhd, PET Master
Sdn Bhd, Angenet Sdn Bhd and Hidro Dinamik Sdn Bhd as at 31 May 2014. The Company
involved in the manufacturing and distribution of natural mineral water, sparkling natural
mineral water, distilled drinking water, carbonated fruit-flavored drinks, non-carbonated
fruit-flavored drinks, functional drinks, toothbrushes, preforms and packaging bottles. On the
other hand, Spritzer Bhd Group also bottled drinking water under the brand name ‘Summer’ as
their defensive business strategy.
The company runs in three sections which is manufacturing. This section involved in the
production of natural mineral water, carbonated flavored water, distilled water, drinking water
and polyethylene terephthalene (PET) bottles. The second section covers trading business
such as sales of bottled water and other consumer products. While the another section covers
investment and properties holding.
The Spritzer Group is a member of Asia Middle East Bottled Water Association (ABWA)
and an international affiliate member of The American Beverages Association. Since its
incorporation in 1993, it has received many awards and certifications. Spritzer was recently
recognized at the World Branding Awards with a Brand of the Year 2015 National Award in the
Water category. Also, one of its subsidiaries company, Chuan Sin Sdn. Bhd., is the first
company in Asia to have held certification by NSF International, recognized by the US FDA,
WHO, FAO and Health Canada.

4. TAYLOR’S UNIVERSITY | SABD | FNBE | BASIC ACCOUNTING
ACCOUNTING REPORT DATA
Balance sheet of Spritzer Berhad for year 2013 and 2014.

5. TAYLOR’S UNIVERSITY | SABD | FNBE | BASIC ACCOUNTING
P&L Statement of Spritzer Berhad for year 2013 and 2014
Additional information :
1) Total owner equity for the year 2012 is RM 150,207,000.
2) Inventory balance for 2012 is RM 20,980,000; debtors balance for 2012: RM 51,211,000.
3) Interest expenses for the years 2013 and 2014 are RM 3, 733,000 and RM 3,135,000

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ii) 2014
Gross profit
=238,750,000-105,442,000-102,000+368,000
= 133,574,000
GPM = 133,574,000
238,750,000
= 55.9 %
ii) 2014
= 21,566,000
238,750,000
= 9%
X 100%
X 100%
ii) 2014
= 21,566,000
(187,792,000+167,018,000)
2
= 21,566,000
177,405,000
= 12.2%
X 100%
X 100%
X 100%X 100%
X 100%
X 100%
Ratio Analysis : Calculation
a) Profitability Ratios
1) Return on equity (ROE)
i) 2013
= 19,233,000
(167,018,000+150,207,000)
2
= 19,233,000
158,612,500
=12.1%
2) Net Profit Margin (NPM)
i) 2013
= 19,233,000
201,935,000
= 9.5%
3) Gross Profit Margin (GPM)
i) 2013
Gross profit
= 201,935,000-89,811,000-146,000+342,000
=112,320,000
GPM = 112,320,000
201,935,000
= 55.6 %
Formula : (Net profit ÷ Average O/E) x 100%
Formula : (Net profit ÷ Net sales) x 100%
Formula : (Gross profit ÷ Net sales) x 100%

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ii) 2014
= 28,531,000
238,750,000
= 12%
X 100% X 100%
X 100%
201,935,000
X 100%
201,935,000
ii) 2014
= 3,503,000
238,750,000
=1.5%
X 100% X 100%
4) Selling expenses ratio (SER)
i) 2013
= 22,085,000
201,935,000
= 10.9%
5) General expenses ratio (GER)
i) 2013
= (10,587,000 + 53,974,000)
= 64,561,000
= 32%
6) Financial expenses ratio (FER)
i) 2013
= 4,079,000
201,935,000
= 2%
Formula : (Selling Exp ÷ Net sales) x 100%
ii) 2014
=(11,304,000+62,997,000)
238,750,000
= 74,301,000
238,750,000
= 31.1%
X 100%
X 100%
Formula : (Financial Exp ÷ Net sales) x 100%
Formula : (General Exp ÷ Net sales) x 100%Formula : (General Exp ÷ Net sales) x 100%

8. TAYLOR’S UNIVERSITY | SABD | FNBE | BASIC ACCOUNTING
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X 100%
b) Stability Ratios
1) Working capital
i) 2013
= 97,727,000
80,724,000
= 1.21 : 1
2) Total debt
i) 2013
= 117,107,000
284,125,000
= 41.2%
3) Stock turnover
i) 2013
= 365 Days ÷ (89,811,000+146,000-342,000)
[(25,190,000+20,980,000) ÷ 2]
=365 Days ÷ 89,615,000
23,085,000
= 94 days.
Formula : Total current assets ÷ Total current liabilities
Formula : 365 Days ÷ (COGS ÷ Average Inventory)
Formula : (Total liabilities ÷ Total assets) x 100%
ii) 2014
= 106,200,000
85,917,000
= 1.24 : 1
ii) 2014
= 119,830,000
307,622,000
= 39%
X 100%
ii) 2014
=365 days÷ (105,442,000+102,000-368,000)
[(27,419,000+25,190,000)÷2]
=365 days÷ 105,176,000
26,304,500
=91.3 Days

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4) Debtor turnover
i) 2013
= 365 days ÷ (½ × 201,935,000)
[(60,207,000+51,211,000) ÷2]
= 365 days ÷ 100,967,000
55,709,000
= 201.4 Days
5) Interest coverage
i) 2013
= (3,733,000+19,233,000)
3,733,000
= 22,966,000
3,733,000
= 6.2 times
Formula : (Interest Exp + Net profit) ÷ Interest Exp
ii) 2014
= (3,135,000+21,566,000)
3,135,000
= 24,701,000
3,135,000
= 7.9 times
Formula : 365 Days ÷ (Credit sales ÷ Average Debtor)
ii) 2014
=365 days ÷ (½ × 238,750,000)
[(66,033,000+60,207,000)÷2]
=365 Days ÷ 119,375,000
63,120,000
=193 days

10. TAYLOR’S UNIVERSITY | SABD | FNBE | BASIC ACCOUNTING
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Ratio Analysis: Interpretation
a) Profitability Ratios
The table below shows the interpretation of the trends from year 2013 to 2014 periods.
Profitability
Ratios
2013 2014 Interpretation
Return on
Equity (ROE)
12.1% 12.2% From year 2013 to 2014, percentage of ROE increased from
12.1% to 12.2%. The owner getting more return from his
capital compare to last year.
Net Profit
Margin (NPM)
9.5% 9% The percentage of NPM during 2013 to 2014 period has
decreased from 9.5% to 9%. This mean that the business is
getting worse at controlling its overall expenses.
Gross Profit
Margin (GPM)
55.6% 55.9% During the period 2013 to 2014, percentage of GPM
increased from 55.6% to 55.9%. The business ability to
control COGS expenses is getting better.
Selling Exp.
Ratio (SER)
10.9% 12% From the year 2013 to 2014, the percentage of SER increased
from 10.9% to 12%. This mean that the business ability to
control it selling expenses is getting worst.
General Exp.
Ratio (GER)
32% 31.1% The percentage of GER during 2013 to 2014 period has
decreased from 32% to 31.1%. This mean that the business
ability is getting better at controlling general expenses.
Financial Exp.
Ratio (FER)
2% 1.5% During the period 2013 to 2014, percentage of FER decreased
from 2% to 1.5%. This mean that the business ability to control its
financial expenses is getting better .

11. TAYLOR’S UNIVERSITY | SABD | FNBE | BASIC ACCOUNTING
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b) Stability Ratios
The table below shows the interpretation of the trends from 2013-2014 periods.
Stability
Ratios
2013 2014 Interpretation
Working
Capital
(WCR)
1.21 : 1 1.24 : 1 During the period 2013 to 2014, the business working capital
has increased from 1.21:1 to 1.24:1. This mean, the business
ability to pay off current liabilities getting better. In addition, it
does not satisfy the minimum 2:1 ratio.
Total Debt
(TDR)
41.2% 39% From the year 2013 to 2014, the business total debt ratio
decreased from 41.2% to 39%. This mean that the business
total debt has reduced. Moreover, it does not exceed 50%
maximum limit.
Stock
Turnover
(STR)
94
days
91.3
days
During 2013 to 2014 period, the days of stock turnover has
decreased from 94 days to 91.3 days. This means the
business is selling its products at a faster rate than last year.
Debtor
Turnover
(DTR)
201.4
days
193
days
During the period 2013 to 2014, the days of debtor turnover
has decreased from 201.4 days to 193 days. This mean that
the business is taking less time to collect its debt compare to
last year.
Interest
Coverage
(ICR)
6.2
times
7.9
times
During the period 2013 to 2014, the business interest
coverage has increased from 6.2 times to 7.9 times. This
means the business ability to pay the interest is getting better.
Furthermore, it satisfy minimum requirement of 5 times.

12. TAYLOR’S UNIVERSITY | SABD | FNBE | BASIC ACCOUNTING
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P/E Ratio
Spritzer Berhad’s current share price is RM1.89 per share and its earnings per share is
RM0.163
P/E ratio = RM1.890
RM0.1630
= 11.6
Interpretation: The calculation above shows the P/E ratio for Spritzer Berhad is 11.6. This
means that an investor will need to wait for 11.6 years to claim back his original principal.
Formula : Current share price/Earning per share

13. TAYLOR’S UNIVERSITY | SABD | FNBE | BASIC ACCOUNTING
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Investment Recommendation
a) PROFITABILITY
As the gathered data show, the net profit is increasing from 2013 to 2014 and it is more than
12% which is a big grow during a year. Based on the ratios calculated, the Company’s return on
equity shows more return in capital and its ability to control its COGS expenses is getting better
in 2014 than 2013. However, the net profit margin show that the company getting worse at
controlling its overall expenses, which is bad. Even though selling expenses ratio show the
company ability to control selling expenses is getting worse, the general expenses ratio and
financial expenses ratio show a lot of improvement for the last two years. Thus, it helps to cover
up the loss caused by selling expenses.
b) STABILITY
Spritzer Bhd is doing incredibly good in stability from the period 2013 to 2014. The total debt,
stock turnover, debtor turnover and interest coverage are showing improvements respectively.
The business total debt has reduced, it is selling products at a faster rate compared to the
previous year, taking less time to collect debt and its ability to pay off interest is getting better.
Working capital which is the ability to pay off current liabilities is getting better too however it still
does not satisfy the 2:1 minimum requirement.
c) SHARE PRICE
Based on the P/E ratio which is 11.6 times, it is considered cheap as it is still below 15.
Spritzer Bhd has a moderate profitability and a high stability therefore I strongly suggest the
investors to invest in this company. If an investor was to buy a share in the company, he would
just have to wait for about 11 years to claim back his original principal and this definitely would
not be a problem since Spritzer Bhd is fairly profitable and strongly stable in financial.

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Appendix

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Reference
Annual report 2013 (2013). Retrieved 27 May 2015, from
http://www.spritzer.com.my/wp-content/uploads/2014/05/SPRITZER_AR_2013.pdf
Annual report 2014 (2014). Retrieved 27 May 2015, from
http://www.spritzer.com.my/wp-content/uploads/2014/05/SPRITZER_AR_2014.pdf
Spritzer bhd (sptz.kl) (n.d.). Retrieved 31 May 2015, from
http://www.reuters.com/finance/stocks/companyProfile?symbol=SPTZ.KL
Share Price Movement. (n.d.). Retrieved June 3, 2015, from
http://www.malaysiastock.biz/Corporate-Infomation.aspx?type=A&value=S&securityCode=710
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Khoo, D. (2013, February 16). Spritzer’s competitive edge. The Star. Retrieved June 4, 2015,
from
http://www.thestar.com.my/Business-News/2013/02/16/Spritzers-competitive-edge/?style=biz