LBS Bina Group is a property development and investment holding company in Malaysia. An analysis of the company's financial ratios from 2012-2013 showed improving profitability, with returns on equity and net profit margins increasing significantly. However, stability ratios indicated some risks, with the working capital ratio declining and total debt ratio remaining above 50%, posing a bankruptcy risk. A comparison of LBS Bina's share price performance to the FTSE Bursa Malaysia Index from July to September 2015 found the company's shares generally declined more sharply than the overall market. Based on the financial analysis, the company was not recommended for investment in 2013 due to instability issues around debt levels and liquidity, despite gains in profitability.

1. 1
SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN
FOUNDATION IN NATURAL AND BUILT ENVIRONMENT
BASIC ACCOUNTING (ACC30205)
FINANCIAL RATIO ANALYSIS
COMPANY : LBS BINA GROUP BHD
LECTURER : MS. TAY SHIR MEN
GROUP MEMBERS : YAP CHOE HOONG (0323161)
YEONG POH LING (0323590)
NG JI YANN (0323713)
TEO CHIANG LOONG (0323762)

2. 2
TABLE OF CONTENT
NO. CONTENT PAGE
1 History of LBS BINA GROUP BERHAD 3
2 Recent Development 4
3 Profitability Ratio 5
4 Stability Ratio 7
5 Price Earning Ratio 9
6 InvestmentRecommendation 16
7 Appendix 18
8 References 22

3. 3
BRIEF BACKGROUND HISTORY of LBS BINA GROUP BERHAD
LBS Bina Group Bhd. is a management and investment holding company, which engages
in the property development business. It operates through the following segments:
Property Development, Management & Investment, Trading & Others, Construction,
and Racing Circuit. The Property Development segment develops residential, industrial
and commercial properties.
LBS Bina Group Bhd. have been around for more than 20 years, LBS Bina has built a
strong reputation for developing high quality properties all over Malaysia and
abroad.The history behind LBS Bina actually dates back longer than that when Datuk Lim
Bock Seng started a construction business in Petaling Jaya which would later grow to
become one of the most significant property developers in Malaysia.
LBS would then expand further in 1992 when it ventured into the property development
sector through the Jelapang Maju Light Industrial Park in Perak. That would be the
springboard to more projects as LBS continued to grow exponentially. Soon after, the
company was undertaking several large projects including its flagship projects like the
Taman Perindustrian Bukit Serdang Seksyen 14, Taman Pinggiran Putra and the very
popular Bandar Saujana Putra, which was a mega project.
Since then, LBS has continued to expand and grow where it is among the primary
players in the Malaysian market while it is expanding further outside the country into
China, seen as one of the most challenging markets in the world.

4. 4
RECENT DEVELOPMENT
Property developer LBS Bina Bhd is targeting to achieve sales worth RM1bil from 12
projects with a gross development value of RM1.7bil to be launched in 2015. These are
mainly residential properties, priced at below RM500,000 a unit, located in in the Klang
Valley, Pahang and Johor.
LBS Bina managing director Datuk Sri Lim Hock San is very confident that they can
achieve RM1bil sales as Klang Valley project itself is expected to contribute revenue of
RM700mil, whereas the remainder projects in Batu Pahat and Cameron Highlands could
both contribute over RM300 mil at a media briefing.
For the current year, Lim pointed out that the properties to launch would comprise of
both residential and commercial properties of 81% and 19% respectively, adding that
more than half of the residential properties would be priced below RM500,000.
Moreover, Lim noted that the company would be launching projects with a GDV of RM6
bil in the next three year in Selangor, Pahang and Johor comprising of both residential
and commercial projects.
Moving forward, with relations to the recurring income for LBS Bina, Lim said the
company’s plan to transform Zhuhai International Circuit in China into a tourism hub will
start construction by 2016.
Concerning ML Global Bhd LBS Bina’s associate, Lim said the company’s restructuring
plan aims to cut down wastages to increase profitability and is currently looking for
more construction jobs.

5. 5
PROFITABILITY RATIO
The following table below shows the profitability ratio calculation and
interpretation for LBS from the year of 2012 to 2013.
Profitability
Ratios
2012 2013 Interpretation
Return on
Owner’sEquity
Ratio
(ROE)
39,003,430
(506,549,830 + 526,831,483) ÷ 2
= 7.5 %
397,323,654
(526,831,483 + 872,640,233) ÷ 2
= 56.8%
Duringthe year of 2012 to
2013, ROE has increased
from7.5% to 56.8% which
meansthat LBS isgetting
more returnfrom the capital
than lastyear.
NetProfit
Margin Ratio
(NPM)
39,003,430
509,644,355
× 100%
= 7.7%
397,323,654
533,532,722
× 100%
= 74.5%
Duringthe year of 2012 to
2013, NPM hasincreased
from7.7% to 74.5% which
meansthat LBS isgetting
betterat controlling
expenses.
GrossProfit
Margin Ratio
(GPM)
146,227,906
509,644,355
× 100%
= 28.7%
168,577,154
533,532,722
× 100%
=31.6%
From 2012 to 2013, the
GMP forthe companyof
LBS has increasedfrom
28.7% to 31.6%, which
meansthat LBS isgetting
betterformanagingtheir
cost of goods sold.

6. 6
General
ExpensesRatio
(GER)
67,470,147
509,644,355
× 100%
= 13.2%
85,596,945
533,532,722
× 100%
=16%
Duringthe year of 2012 to
2013, GER has increases
from13.2% to 16%, which
meansthat the companyof
LBS is notgettingbetterto
manage theirgeneral
expenses.
Financial
ExpensesRatio
(FER)
18,457,247
509,644,355
× 100%
= 3.6%
15,170,850
533,532,722
× 100%
= 2.8%
Duringthe year of 2012 to
2013, FER has decreased
from3.6% to 2.8%, which
meansthat the companyof
LBS is gettingbetterto
manage theirfinancial
expenses.

7. 7
STABILITY RATIO
The following table below shows the stability ratio calculation and interpretation
for LBS fromthe year of 2012 to 2013.
Stability
Ratios
2012 2013 Interpretation
Working
Capital Ratio
(WCR)
927,829,389
520,720,661
= 1.782
= 1.78 : 1
925,492,766
609,599,483
= 1.518
= 1.52 : 1
For everyRM1 of
currentliabilityinthe
year2013 ,the
business,LBS Bina
has 1.52 of current
assetsto payfor it . It
has a lowerratio
than 2012. However,
a businessshould
have a minimumof
2:1 of currentassets
to currentliabilityto
ensure thatthe
businesswillnot
experience difficulty
inrepayingits
currentliabilities.
Total Debt
Ratio
(TDR)
908,176,834
1,435,008,317
× 100%
= 63.3%
1,137,172,437
2,009,812,670
× 100%
= 56.6 %
For 2013, the total
debtratiois lower
than 2012, havinga
total debtratio of
56.6% and 63.3%
respectively.Asthe
total debtratio is
lowerthanin2013,
thisresultsina
higheramountof
owner’sequity.A
businesswithtotal
debtratiothat
exceeds50%would

8. 8
be consideredas
havinghigherriskof
goingbankrupt.
Inventory
Turnover
Ratio
(ITR)
365 days÷
363,416,449
(17,850,045+ 13,593,510)÷2
= 16 days
365 days÷
364,955,568
(13,593,510+ 22,575,116)÷2
= 18 days
LBS Bina take 18 days
in2013 to sell one
batch of goods more
than 16 daysin 2012
whichmeansthat
LBS Bina in2013
cannot generate
more cash quicklyto
pay off itsliabilities.
Interest
Coverage
Ratio
(ICR)
39,003,430 + 34,929,440
34,929,440
= 2.1 times
397,323,654 + 27,216,791
27,216,791
= 15.6 times
Interestcoverage
ratiofor LBS Bina is
higherin2013 ,15.6
timesthan2012 ,2.1
timeswhichmeans
that LBS businesshas
enoughprofitstopay
itsinterestexpenses
15.6 times.
Therefore,tobe
safe , a business
interestcoverage
ratioshouldnever
fall below5times.

9. 9
PRICE EARNING RATIO ( P/E RATIO )
2012 ($)
𝐶𝑈𝑅𝑅𝐸𝑁𝑇 𝑆𝐻𝐴𝑅𝐸 𝑃𝑅𝐼𝐶𝐸
𝐸𝐴𝑅𝑁𝐼𝑁𝐺 𝑃𝐸𝑅 𝑆𝐻𝐴𝑅𝐸
=
0.84
0.097
= 8.7 times
2013 ($)
𝐶𝑈𝑅𝑅𝐸𝑁𝑇 𝑆𝐻𝐴𝑅𝐸 𝑃𝑅𝐼𝐶𝐸
𝐸𝐴𝑅𝑁𝐼𝑁𝐺 𝑃𝐸𝑅 𝑆𝐻𝐴𝑅𝐸
=
1.56
0.9609
= 1.6 times
The price earning ratio measures how expensive a shareis. The higher the price
earning ratio, the more expensive a shareis. Based on the calculation, in the year
2012 of price earning ratio is 8.7 while in the year 2013 of price earning ratio is
1.6. This means that the sharein 2013 is less expensivecompared to the sharein
the year of 2012. As a conclusion, the price earning ratio is 1.6 indicates that the
investor has to wait for 1.6 years to recoup his investment.

10. 10
INDEX FOR FTSE BURSA MALAYSIA ON 7 JULY 2015 & 13 JULY 2015
SHARED PRICE FOR LBS BINA GROUP ON 7 JULY 2015 & 13 JULY 2015

11. 11
INDEX FOR FTSE BURSA MALAYSIA ON 6 AUGUST 2015 & 1 SEPTEMBER 2015
SHARED PRICE FOR LBS BINA GROUP ON 6 AUGUST 2015 & 1 SEPTEMBER 2015

12. 12
INDEX FOR FTSE BURSA MALAYSIA ON 2 SEPTEMBER 2015 &17 SEPTEMBER 2015
SHARED PRICE FOR LBS BINA GROUP ON 2 SEPTEMBER 2015 & 17 SEPTEMBER 2015

13. 13
7 July 15 - 13 July 15 Initial Final Change Percentage
change/%
Shared Price 1.60 1.51 - 0.09 - 5.63
Index 1712.30 1716.11 3.81 0.22
6 Aug 15 - 1 Sept 15 Initial Final Change Percentage
change/%
Shared Price 1.48 1.28 - 0.20 - 13.5
Index 1694.64 1609.21 - 85.43 - 5.04
2 Sept 15 - 17 Sept 15 Initial Final Change Percentage
change/%
Shared Price 1.34 1.50 0.16 11.9
Index 1590.19 1681.54 91.35 5.74
*change = final - initial
*( change/initial ) x 100% = % change

14. 14
Graphs of shared price for LBS Bina Group and index for FTSE Bursa
Malaysia KLCI are shown and compared on the sameday. Performanceof LBS and
KLCI arethen compared again with respect of 1 month time. This is to determine
whether to investin that particular company or in an overallsharemarket by
sorting out which has a higher percentage of performance. The performanceof
both was put into comparison within a period of a year with 3 different points of
time.
Based on the first few points chosen which are on the 7th July 15 and 13th July,
the shared price for LBS shows a decrease of 0.09, with a percentage decrease of 5.63%.
For the index, it shows an increase of 3.81, with a percentage increase of 0.22%. Hence,
the performance of the company for these points are worse than the share market.
Based on the second few points chosen which are on the 6th August 15 and 1st
September 15, the shared price for LBS shows a decrease of 0.2, with a percentage
decrease of 13.5%. For the index, it shows a decrease of 85.43, with a percentage
decrease of 5.04%. Hence, the performance of the company for these points are still
worse than the share market.
Based on the third and last few points chosen which are on the2nd September 15
and 17th September 15, the shared price for LBS shows an increase of 0.16, with a
percentage increase of 11.9%. For the index, it shows an increase of 91.35, with a
percentage increase of 5.74. Hence, the performance of the company for these points
are improved and better than the share market.

15. 15
By viewing the comparison of LBS and KLCI, LBS is showing a more consistent
drop pattern in an overall overview. At times, the drops are very drastic. Due to the
more negative value of change in LBS compared to KLCI (in the calculation), LBS is not
recommended to be invested in.

16. 16
INVESTMENT RECOMMENDATION
With reference to LBS Bina Group’s profitability ratios from year 2012 to 2013,
the Return on Equity Ratio (ROE) and Net Profit Margin Ratio (NPM) have increased
significantly. Besides that, the Gross Profit Margin Ratio has also improved and all these
are showing a positive sign as the group is making more money. However, General
Expenses Ratio (GER) and Financial Expenses Ratio (FER) should also be considered. For
LBS Bina Group, the GER shows a small increment which means a small increment in
expenses but FER has a slight decrease which means decreased expenses. All these are
an indication of positive overall profit for the business.
Moving on to stability ratios from year 2012 to 2013, the Working Capital Ratio
(WCR) is not showing a very good positive sign where it decreased from 1.78 : 1 to 1.52 :
1 and also not satisfying 2:1 ratio, meaning that is has lower current assets to pay off its
current liabilities in year 2013. The Total Debt Ratio has decreased from 63.3% to 56.6%
but it has exceeded 50% and it has a risk of facing bankruptcy.
Other than that, the Inventory Turnover Ratio (ITR) has increased to a short 2
days from 16 days to 18 days to generate the cash but the Interest Coverage Ratio (ICR)
has shown a great improvement in gaining profits to cover the interest, which should
not fall below 5 times.
As for Price Earning Ratio, it has improved dramatically from 8.7 times to 1.6
times in year 2013, meaning that it is less expensive to purchase a share and takes a
shorter period of time of 1.6 years to recoup the investment instead of 8.7 years. Any
P/E Ratio lesser than 15 is considered cheap.
In terms of profitability, LBS Bina Group has improved in gaining revenue and
profit. However, the company has a mild difficulty to pay off its current liabilities with its
current assets and there is a risk that the company might face bankruptcy but also, the

17. 17
Total Debt Ratio has shown a promising decrease. I would not recommend investing in
that year, 2013, as the company has the tendency to go bankrupt and still facing
difficulty in paying off its current liabilities which means it is not financially stable even
though it is showing gains in profit.
Based on the graphs in recent year 2015, LBS Bina Group’s performance is
progressively deteriorating and is worse than KLCI. At some points, the performance of
LBS drops when KLCI climbs. Hence, LBS is not recommended to be invested in based on
the graph in year 2015.

18. 18
APPENDIXE
Statements of Financial Position (2012)

19. 19
Statements of Comprehensive Income (2012)

20. 20
Statements of Financial Position (2013)

21. 21
Statements of Comprehensive Income (2013)

22. 22
References
LBS Bina Group Berhad Annual Report (2012) .Retrieved from 28th January 2016 ,from
http://www.lbs.com.my/investor-relations/financial-reports/2012/
LBS Bina Group Berhad Annual Report (2013). Retrieved from 28th January 2016 ,from
http://www.lbs.com.my/investor-relations/financial-reports/2013/
LBS Bina Group Berhad Website , Accessed 2nd February 2016 ,from
http://www.lbs.com.my/
Brief history of LBS BINA Group Berhad
http://www.home.com.my/article/lbs-bina-group-berhad