Organic Name Reactions for the students and aspirants of Chemistry12th.pptx
Compiled fm assignment (complete)
1. An Assignmentcover sheetneeds to be included with each assignment. Please complete alldetails clearly.
When submitting the printed copy of this assignment, please attach this sheet to the front of your assignment. When submitting the assignment online,
please ensure this cover sheet is included as the first page of your document.
Please check with your subjectlecturer for assignmentsubmission locations.
Names: Student IDs:
1. KevinLee Hee Xian 0315192
2. Goh Jeng Jhieh 0315080
3. Chua Jia Cheng 0315160
4. Muhammad Haziq bin Hj Abd Zariful 0314131
5. KevinHii Ting Kui 0319223
6. Haji Muhammad Syafiq bin Haji Abd Zariful 0314702
Programme: Bachelor ofQuantity Surveying (Honours),SCHOOL OFARCHITECTURE, BUILDING & DESIGN
Email (Group Leader): kevlee3088@gmail.com ContactNo (Group Leader): +60192833089
Subjectcode and title: QSB3413/QSB3414/FIN60203 FINANCIAL MANAGEMENT
Module Lecturer/ Tutor: Lai Chee Kin
Assignmentnumber: Group Written Assignment Due date: 22 November 2016
Assignmenttopic as stated in the guidelines provided: Businessand financial analyses and forecasts ofa company.
Further Information: (e.g.state ifextension wasgranted and attach evidence ofapproval and Revised Submission Date)
I have read and understood the Taylor’s University Regulationson cheating,plagiarism and collusion and state that this piece of work is my own and does
not contain any unacknowledged work from any other sources.
I authorise the Universityto test anyworksubmittedby me,usingtextcomparison software, for instances of plagiarism. I understand this will involve the
University or its contractor copying my work and storing it on a database to be used in future to test work submitted by others.
Note: The attachment ofthisstatementon any electronicallysubmittedassignmentswill be deemed to have the same authority as a signed statement.
Signed: Name: Date:
KevinLee HeeXian
Goh Jeng Jhieh
Chua Jia Cheng
Muhammad Haziq bin Hj Abd Zariful
KevinHii Ting Kui
Haji Muhammad Syafiq bin Haji Abd Zariful
Date received from student: Receivedby:
ASSIGNMENT COVER SHEET
2. A. A feedback form needs to be included with each assignment. Please complete all details clearly.
Student Names and IDs:
Programme: Bachelor ofQuantity Surveying (Honours),SCHOOLOF ARCHITECTURE,BUILDING & DESIGN
Email : ContactNo :
Module code and title: QSB3413/QSB3414/FIN60203 FINANCIAL MANAGEMENT Module Lecturer/ Tutor: Lai Chee Kin
Assignmentnumber: Group Written Assignment Due date: 22 November 2016 Word Count:
Assignmenttopic as stated in the guidelines provided: Business and financial analysesand forecasts ofa company.
B. This section will be completed by the lecturer/tutor assessing your assignment:
CRITERIA %
DISTINCTION
(7.5-10)
CREDIT
(6-7.4)
PASS
(5-5.9)
MARGINAL
FAIL(4-4.9)
FAIL
(0-3.9) SCORE
Executive summary,
introduction,background
and principalactivities, and
strategic plans ofthe
company
5 # Excellent
Well-researched, objective and
clearly written.
# Good # Fair # Poor # Confusing
Shows little or no research, biased or
irrelevant, lacks clarity.
Industry analysis 10 # Excellent
Relevant, up-to-date and well-
researched.
# Good # Fair # Poor # Erroneous
Irrelevant, outdated, little evidence of
research.
Financialanalysis 70 # Excellent
Accurate calculations ofthe latest
financial data over two years,
comparison with industry data, well-
reasoned analyses.
# Good # Fair # Poor # Erroneous
Multiple errors in calculations
showing lackofunderstanding,fails
to evaluate company by comparing
with relevantindustry data, no
reasoned analysis offinancial data.
Financialforecasts 10 # Excellent
Accurate calculationsand
correct conclusions. Excellent
evaluation of theprojectedcash
requirements.
# Good # Fair # Poor # Erroneous
Multipleerrorsin calculations
showing lackof understanding.
Forecasts withoutany basisor
justification. Missing or invalid
conclusionsand analyses.
Structure andpresentation,
language, reference of
sources
5 # Excellent
Excellentheadings/sub-headings,
layout, pagination. Excellent
grammar, spelling.Effective/accurate
use offigures and tables. Excellent
references ofsources.
# Good # Fair # Poor # Erroneous
Inappropriate or no headings, poor
and confusing layout, innappropriate
or no numbering. Weak grammar,
many spelling mistakes,
ineffective/inaccurate use offigures
and tables. Poor or no references of
sources.
Penalty
Total (100%)
Final score (25%)
Any additionalcomments(if there is any):Comments:
Assessed by: Date:
Sample Moderated by (ifany): Date:
ASSIGNMENT FEEDBACK
GRADE/ MARK
3. Marking Criteria for Assignment
% Task details
DISTINCTION
(75-100)
CREDIT
(60-74)
PASS
(50-59)
MARGINAL FAIL
(40-49)
FAIL
(0-39)
Executive
summary,
introduction,
backgroundand
principal
activities, and
strategicplans of
the company
5 Remember that this
should be a report and
should be presented in a
professional report format.
Presentation should
include tables/graphs to
enhance
understandability.
# Excellent
Well-researched, impressive
choice and range of relevant
information, objective and
clearly written.
# Good
Good level of research,
covers all the mainpoints,
objective,
# Fair
Fair level of research,
missing some important
relevant information, some
errors/omissions.
# Poor
Poor effort in research,
missing relevant information
or containswrong/outdated
information.
# Inadequate
Shows little or no research,
biased or irrelevant, lacks
clarity.
Industry analysis 10 You are expected to
research the industry in
which the company
operates to give context to
your financial analysis.
# Excellent
Relevant, up-to-date and
well-researched, outstanding
level of detail.
# Good
Good level of relevant
information, current and
appropriate.
# Fair
Fair level of appropriate
information, some outdated
or errors, somewhat
incomplete.
# Poor
Poor effort in researching
the industry, some irrelevant
or outdated info,
# Inadequate
Irrelevant, outdated, little
evidence of research.
Financial analysis 70 This includes accurate
calculations of relevant
ratios and analyses of
trends in tables/graphs.
Comparison should be
made to competitors
and/or industry averages.
Analyses and evaluations
should be made in the
context of the current
industry climate.
# Excellent
Accurate calculationsof the
latest financial data over 5
years, comparison with
industry data, well-reasoned
analyses. Excellent analysis
of trends.
# Good
Accurate calculation of
relevant ratiosfor 5 years,
good analysesof ratiosand
trends, comparison with
industry data or competitors.
# Fair
Fairly accurate calculation of
relevant ratios, fair
description of trends, lacking
comparison with industry
data or competitors.
Containssome errors or
omissions.
# Poor
Errors in calculations
showing lackof
understanding, weak/limited
analyses.
# Inadequate
Multipleerrorsin
calculationsshowing lackof
understanding, failsto
evaluate company by
comparing withrelevant
industry data, no reasoned
analysisof financial data.
Financial
forecasts
10 Accurate calculations of
forecast income statement
and any required external
funding or surplus cash.
# Excellent
Accurate calculationsand
correct conclusions.
Excellent evaluation of the
projected cash
requirements.
# Good
Accurate calculationsand
correct conclusions. Good
evaluation of theprojected
cash requirements.
# Fair
Fairly accurate calculations
with conclusion thatlack
some clarity and analysis.
# Poor
Some major errorsin
calculations, poor or
inaccurate
conclusions/analyses.
# Inadequate
Multipleerrorsin
calculationsshowing lackof
understanding. Forecasts
withoutany basisor justification.
Missing or invalid
conclusionsand analyses.
Structure and
presentation,
language,
reference of
sources
5 Professional writing and
presentation, including
good page layout, use of
headers, pagination,
organisation of sections,
reference of sources,
inclusion of relevant
details in notes and
appendices.
# Excellent
Excellent headings/sub-
headings, layout, pagination.
Excellent grammar, spelling.
Effective/accurate use of
figuresand tables. Excellent
referencesof sources.
# Good
Good use of headings,
layout isclear, good
pagination, some use of
table/graphsto illustrate
trends. Good reference of
sources.
# Fair
Layout that isfairly readable
with appropriatepagination,
some spelling and
grammatical errors, lacking
logical flow in some parts,
effective use tables/graphs
to illustrate main points.
# Poor
Lacking appropriate
headings/subheadings, poor
paragraphing, many spelling
and grammatical errors,
lacking logical flow inmany
parts.
# Inadequate
Inappropriate or no
headings, poor and
confusing layout,
innappropriate or no
numbering. Weakgrammar,
many spellingmistakes,
ineffective/inaccurate use of
figuresand tables. Poor or
no referencesof sources.
4. ASSESSMENT FOR PRESENTATION
Programme : SABD
Semester / Intake : Sem 5, August 2016 Intake Subject Code : QSB3413/QSB3414/FIN60203
Company name : Sycal Ventures Berhad Subject Title : Financial Management
Guidelines to Assessing Presentations
0.75-1 = Superior (A) 0.60-0.74 =Above Average (B) 0.50-0.59 = Average (C) 0.40-0.49 = Below Average (D)
0.00-0.39 = Weak/No Attempt (F)
Quality of Contents : Key points are clearly identified and explained, with clear conclusions. PowerPoint slides or other
presentation aids contain the required subject information and are presented clearly.
Language : English Language; grammatically correct, good vocabulary, proper sentence construction.
Clarity : Smooth speech, voice is clear and loud, flow in the explanation is easy to understand.
Dressing : Formal and professional.
Composure : Calm, composed and not fidgety. Good eye contact.
No. Name / Student ID
Contents of Presentation Oral Skills
Body Language
and Dressing Total
Section / Work Done
(Identify and describe work
completed)
Qualityof
Contents
Language
Clarity
Dressing
Composure
(1) (1) (1) (1) (1) (5)
1. KevinLee HeeXian Questions (a),(i)
2. Goh Jeng Jhieh Questions (c), (h)
3. Chua Jia Cheng Questions (d), (j)
4.
Muhammad Haziq bin Hj Abd
Zariful Questions (b), (g), (k)(i) & (k)(ii)
5. KevinHii Ting Kui Questions (e), (j)
6.
Haji Muhammad Syafiq bin Haji
Abd Zariful Questions (f), (j), (l)
Other Comments
Assessed by: Date:
5. i
TABLE OF CONTENTS
Background of the Company…………………………………………………………………………...1
Principal Activities…………………………………………………………………………………......2
Analysis of Revenue Contributions………………………………………….…………………….....3-4
Evaluation of Current Industry……………………………………………………………………….4-5
Current size of market………………………………………………………………………….4
The Prospect for future growth………………………………………………………………4-5
Challenges faced in the industry……………………………………………………………….5
Strength & Weaknesses………………………………………………………………………………5-6
Strategic Plans………………………………………………………………………………………..6-7
Summary of Opportunities…………………………………………………………………….6
Downstrend towards first half of 2016………………………………………………………6-7
Summary of Plans for Major Challenges………………………………………………………7
Capital Investments & Source of Funding……………………………………………………………8-9
Evaluation of Cash Flows…………………………………………………………………………...9-11
Free Cash Flow……………………………………………..……………………………………...11-12
Evaluation Of Company’s Performance……………………………………………………...……12-14
Liquidity………………………………………………………………………………………12
Activity……………………………………………………………………………………….12
Debt…………………………………………………………………………………………...13
Profitability…………………………………...…………………………………………...13-14
Market Performance………………………….……………………………………………….14
Forecast of Financial Year 2016………………………………………………………………...…15-17
Forecast Income statement of 2016…………………………………………………………..15
Required New funds for forecast 2016……………………………………………………15-17
Conclusion……………………………………………………………………………………….........17
6. ii
LIST OF APPENDICES
Appendices…………………………………………………………………………..…APP/1 – APP/19
Balance Sheet…………………………………………………………………………….APP/1
Income Statement……………………………………………………………………..…APP/2
Statement of Cash Flows……………………………………………………….APP/3 – APP/5
Financial Statement Notes used………………………………………………...APP/6 – APP/8
Other Relevant Annual Report Pages Used……………………………………………...APP/9
Financial Ratio formulas & equations………………………………………...APP/10 – APP/18
Free Cash Flow Formula…………………………………………………………….….APP/18
Required New Funds Formula……………………………………………………….…APP/18
Percent-of-sales method calculations……………………………………………….…..APP/18
References………………………………………………………………………..….…APP/19-APP/20
7. iii
LIST OF TABLES
Table 1: List of Board of Directors members…………………………………………………..………1
Table 2: List of subsidiaries & respective principal activities…………………………..……………...2
Table 3: The Increase / (Decrease)in Revenue between the years 2014 & 2015………………………3
Table 4: Malaysia GDP…………………………………………………..……………………………..4
Table 5: Changes in Property, Plant & equipment in the Balance Sheet……………………………….8
Table 6: Additions to Non-current assets………………………………..……………………………...8
Table 7: Sources of Funding for Plant & Equipment...............................................................................9
Table 8: Net cash inflow / (cash outflow) from 2011 to 2015………………………………………….9
Table 9: Summary of major cash flows of SVB in 2015……………………………………………...10
Table 10: Changes in net cash and cash equivalents of the company in its latest year……………….11
Table 11: Free Cash flow of Sycal Berhad from 2011 to 2015……………………………………….11
Table 12: Financial Ratios for Liquidity……………………………………..…………………….….12
Table 13: Financial Ratios for Activity……………………………………..………..…………….….12
Table 14: Financial Ratios for Debt……………………………………..………………………….…13
Table 15: Financial Ratios for Profitability…………………………………..…………………….…13
Table 16: Financial Ratios for Market Performance..………………………..………………………..13
8. iv
LIST OF FIGURES
Figure 1: Bar chart of the types of revenue in 2015 & 2014…………………………………………...3
Figure 2: The Down trend chart of Sycal Berhad………………………………………………………7
Figure 3: Graph showing trend of cash inflow / (cash outflow) from 2011 to 2015……………….…10
Figure 4: Forecast of Income statement 2016 by percent-of-sales method…………………………...15
9. v
LIST OF ABBREVIATIONS
CAGR Compound Annual Growth Rate
CIDB Construction Industry Development Board
GDP Gross Development Profit
GDV Gross Development Value
GST Government Service Tax
MYR / RM Malaysia Ringgit
PKNP Perbadanan Kemajuan Negeri Perak
RNF Required New Funds
SVB Sycal Ventures Berhad
10. 1
BACKGROUND OF THECOMPANY
Sycal Venture Berhad is a Malaysia based company founded in 1980 on its date of
incorporation. In 1994, the company was formerly known as Cygal Berhad and later in June 2007 the
company changed its name to SVB.
This investment holding company mainly focuses in building construction and civil
engineering works in Malaysia and Hong Kong. The company also operates its business in two other
segments as its subsidiaries, which are property development and manufacturing and trading. The
subsidiaries of the company and its 12 indirect subsidiaries are mentioned under ‘Principal Activities.’
Besides that, there are a total of seven people in the board of directors in this company.
Table 1: List of Board of Directors
The headquarters of this company is located at Kuala Lumpur and its shares are traded on the
Kuala Lumpur Stock Exchange under the stock name of SYCAL, where the total number of
shareholders from the analysis of shareholdings at 31 March 2016 was 3,581 and the total numbers of
shares are 320,249,560. As for the largest shareholder, Kenanga Nominees (Tempatan) Sdn Bhd –
Fantastic Hallmark Sdn Bhd owns a total of 53,364,048 numbers of shares in percentage of 16.66%.
11. 2
PRINCIPAL ACTIVITIES
The Company is principally an investment holding company and is listed on the Main Market of
Bursa Malaysia Securities Berhad.
The principal activities of its subsidiary companies are as follows:
Table 2: List ofsubsidiaries & respective principal activities
12. 3
Figure 1: Bar chart of the types of revenue in 2015 & 2014.
Reffering to Table 3, the total revenue has decreased from RM 407,383,000 to RM312, 717,000.
Some significant changes are shown in Figure 1, where the contract revenue is decreased from RM
291,859,000 to RM 248,251,000. Same goes to property development revenue, it had decreased from
ANALYSIS OF REVENUE CONTRIBUTIONS
REVENUE GROUP Increase /
2015 2014 (Decrease)
Revenue comprises: RM' 000 RM' 000
Contract revenue 248,351 291,859 (43,508)
Consultation and project
management fee 7,311 1,200 6,111
Property development revenue 1,458 51,715 (50,257)
Joint venture development revenue 3,182 - 3,182
Sales of goods and services 61,415 62,609 (1,194)
TOTAL 321,717 407,383 (85,666)
0
50000
100000
150000
200000
250000
300000
Contract
Revenue
Consultation
& Project
Management
Fee
Property
Development
Revenue
Joint Venture
Development
Revenue
Sales of Goods
& Services
2015 248351 7311 1458 3182 61415
2014 291859 1200 51715 0 62609
(RM'000)
REVENUE CONTRIBUTIONS
Table 3: The Increase / (Decrease) in Revenue between the years 2014 & 2015
13. 4
RM 51,715,000 to RM 1,458,000. These 2 revenues are the main factors leading to the overall
decrease of total revenue in 2015.
EVALUATION OF CURRENT INDUSTRY
Current size of the market
A report prepared by the Department of Statistics Malaysia shows the 2016 GDP from construction
in Malaysia has declined to 11,899 MYR million in the second quarter from 12,558 MYR million in
the first quarter. However, the 12,558 MYR million GDP is the highest peak the construction industry
has reached in the last 6 years, with the GDP averaging at 9,439 MYR million from 2010 to 2016,
which shows that the industry is on the rise.
Table 4: Malaysia GDP (obtained from http://www.tradingeconomics.com/malaysia/gdp-from-
construction )
The Prospect for future growth
Chief executive of CIDB, Dr Judin Abdul Karim mentioned that although the country is
experiencing a change in its economic climate, the construction industry would remain healthy.
14. 5
Furthermore, the government has just announced a new plan that will see plenty of big projects being
undertaken in Kuala Lumpur in the next five years.
The 10th Malaysia Plan ended in 2015 with the construction sector charting a firm CAGR of
11% in the five-year period. Moving forward to the RM260 billions of development outflow under the
11th Malaysia Plan (2016-2020) represents a 16% increase from the previous plan, which promises
for the growth of the construction industry.
Challenges facing the industry
IJM Corp Sdn Bhd chief executive officer/managing director Datuk Teh Kean Ming said that
with the dejected oil price and slower GDP growth forecast, this year’s construction growth might
slow down. Eversendai Corp Bhd executive chairman and group managing director Tan Sri AK
Nathan said the sudden plunge in global oil prices had brought about many uncertainties for the
overall economic situation. He also mentions that a substantial reduction in buying power will
result in a challenging environment for Malaysia in 2015.
Payment issues in the construction industry are considered a factor of major concern to all
the parties in the industry. A survey of the payment performance has shown that construction industry,
in particular, is prone to late-payment culture (Johnston, 1999).
STRENGTH & WEAKNESSES
Strength
One of the obvious strengths the company boasts is the wide array of trades that it operates
through three segments, construction, property development & manufacturing and trading. The
RM181.67m revenue is a massive sum the company should be proud of, whereas the 169 numbers of
employees reflects greatly on workforce availability. The company moreover has competitive
advantage over other companies for having a lot of projects that would span 5 to 10 years. Looking at
the ‘Ratio Analyses’ section, the current ratio and quick ratio for the last 5 financial year shows the
strong liquidity of the company, as the ratios are above industry average.
Weakness
According to Appendices – Statement of Cash Flow, the drop in net cash flow by RM5.66m
between financial years 2014 & 2015 proves to be a troubling concern for the company. Additionally,
the company used more cash to support its operation that what it has earned, producing a cash flow
15. 6
loss of RM426k. The declining inventory turnover from the past 5 years could ascertain to be a
harrowing weakness for the company, showing the escalating difficulty in selling off properties &
products. The ratio analysis also expresses that the company takes a long time to pay accounts
payable, which could affect banks’/lenders’ trust on the company when lending future loans.
STRATEGIC PLANS
Summary of Opportunities:
- Repayment of RM 69m from 2014 to 2016, boosting company cash position, and also putting
up chances for a dividend for shareholder.
- Cygal Development Sdn Bhd had a 12 year contract with Pullman Hotel until 2022, which
puts up opportunity for Sycal for more jobs in the coming days when Pullman Hotel starts to
expand for their next spot.
- Looking to see it's properties development activities to snap up significant portion of profit
contribution in the next 5 to 10 years with on going projects from Cheras, Sitiawan, Taiping
and Ipoh
- Progress billing on existing construction book order of RM 500 million, as well as potential
RM 1.2 billion GDV in future township development with PKNP.
Downtrend towards the first half of the year 2016
In Appendix – Balance Sheet indicates that the Group obtains new borrowings and tried to sell off
their assets to reduce it. Essentially however, the company was unable to cover up the total amount of
borrowings.
16. 7
Sycal had broken away from the down trend chart recently after a strong rebound on the floor
price at the range ofRM 0.31.This indicates a newtrend in the making.
Figure 2: The Down trend chart of
SVB.
Source:
http://www.sharetisfy.com/2016/07/syca
l-9717-sycal-point-of-perak.html
Even when Sycal had significant
debts, it’s positive cash flow and
careful management overcomes the
amount of debts.
Summary of Plans for Major
Challenges:
- Maintain flow of strong volume in the trend chart after being hit in the range of RM 0.31.
- Sycal next resistant should sit at RM 0.40.
- Going through the current local currency,effect of GST and strict lending policies.
17. 8
CAPITAL INVESTMENTS & SOURCE OF FUNDING
By referring to the Appendices - Balance sheet, the significant changes or additions that can be seen
from the non-current assets that would be considered as major capital investments are the Property,
Plant & equipment assets.
2015
RM ‘000
2014
RM ‘000
2013
RM ‘000
Property,Plant &
equipment
16,882 15,371 7,245
Differencewith
baseyear (2013)
9,637
(+1,511)
8,126 0
Table 5: Changes in Property, Plant & equipment in Balance Sheet
Between 2013 & 2014, there is a major increase in the non-current asset, with an increase by
RM8,126,000. Between 2014 & 2015, it increases again by RM1,511,000. According to Note 4 of the
Notes for Financial Statements, under Property, Plant & equipment, the breakdown of the additions of
Property, Plant & equipment made by the company is seen as below.
2015
RM ‘000
2014
RM ‘000
2013
RM ‘000
Freeholdofficelots
and buildings
- - -
Plant and machinery 582 7,784 1,900
Motorvehicles 3,895 1,923 1,547
Officeequipment,
furnitureandfittings
173 222 52
ThemePark - - -
TOTAL 4,650 9,929 3,499
Table 6: Additions to Non current assets
Three out of the five categories were invested upon for the three financial years of 2013, 2014 &
2015. The additions breakdown shows that Plant & machinery contributes the largest amount for
capital investments for the financial years of 2013 & 2014. However, in 2015, Motor vehicles were
invested the most as compared to other categories in the breakdown.
18. 9
As for the major sources of funding for these investments, Note 31 of the Notes for Financial
Statements clearly states these sources as seen below on Table 7, with the total sum of these payments
equalling the total additions made in the financial year, the latter seen hereinbefore in Table 6.
2015
RM ‘000
2014
RM ‘000
2013
RM ‘000
- Hirepurchase 3,517 3,081 3,092
- Term loan 86 5,447 -
- Cashpayments 1,047 1,401 407
TOTAL 4,650 9,929 3,499
Table 7: Sources of Funding for Plant & Equipment
The cash payment made in each year is also seen in Appendix 3 under Cash Flow Statement -
Purchase of Plant & equipment. As seen in the table, the company relies more on Bank borrowings for
major capital investments over the last three years compared to cash payments.
EVALUATION OF CASH FLOWS
Table 8: Net cash inflow / (cash outflow) from 2011 to 2015.
19. 10
Figure 3: Graph showing trend of cash inflow / (cash outflow) from 2011 to 2015.
Table 9: Summary of major cash flows of SVB in 2015.
-6000
-4000
-2000
0
2000
4000
6000
8000
10000
2011 2012 2013 2014 2015
Cash Flow (RM'000)
20. 11
According to Figure 3, the trend of cash flow decreased slightly from 2011 to 2012 due to more
financing activities incurred. The cash flow started to increase in a significant rate from 2012 to 2014.
However, the cash flow in 2014 declined rapidly and as a result the company does not have any free
cash flow in 2015. In Table 9, the company’s cash equivalents in its latest year had decreased by RM
4,260,000. As stated in statement of cash flow, SVB’s major cash flow of each activity in 2015 from
operating activities are increase in receivables, increase / decrease in amount due by / to contract
customers and decrease in amount due by related parties. Meanwhile, major cash flow from investing
activities consists of purchase of plant and equipment. Lastly, major cash flow from financing
activities are repayment of hire purchase, net (repayment of) / proceeds from term loans and proceed
from revolving credits.
Table 10: Changes in net cash and cash equivalents ofthe company in its latest year.
FREE CASH FLOW
2015 2014 2013 2012 2011
RM'000 RM'000 RM'000 RM'000 RM'000
Netcash fromoperating
activities = (426) (41,770) (14,148) 21,420 1,436
Cash paymentsplanned
for investmentsinlong-
termassets
= (1,407) (1,401) (407) (40) (908)
Dividends = 0 0 0 0 0
Total free
cash flow = (1,833) (43,171) (14,555) 21,380 528
Table 11: Free cash flow from 2011 to 2015
In year 2011 and 2012, SVB had a positive free cash flow. This means the company is able to make
investments and it is good for the company.
CASH AND CASH EQUIVALENTS
AT
CASH AND CASH EQUIVALENTS
AT
END OF FINANCIAL YEAR 2015
CHANGES
BEGINNING OF FINANCIAL YEAR
2015
RM11,758,000 RM6,096,000 (RM5,662,000)
21. 12
Other than that, in year 2013, 2014 and 2015, SVB had a negative free cash flow. This means the
company will not have enough cash in the end of the year for investments. This will cause SVB to be
in a difficult position and at risk.
EVALUATION OF COMPANY’S FINANCIAL RATIOS
(i) Liquidity
2015 2014 2013 2012 2011 Average
Current Ratio (times) 1.92 1.98 1.55 1.46 1.67 1.72
Quick Ratio (times) 1.80 1.84 1.51 1.37 1.57 1.62
Average Collection
Period (days)
360 291 340 298 503 358
Average Payment Period
(days)
257 200 246 230 263 239
Table 12: Ratios for liquidity
The table shows that the liquidity of the firm in the current 5 years. As shown, the company
achieved maximum liquidity in year 2014. The Quick ratios display a small different with the
current ratio, which shows that the even without inventory, the company has a strong liquidity.
(ii) Activities
2015 2014 2013 2012 2011 Average
Inventory Turnover
(times)
14.07 18.37 39.55 18.25 10.69 20.19
Total Asset Turnover
(times)
0.61 0.80 0.72 0.54 0.34 0.60
Operating Profit Margin
(%)
7.32 9.54 6.5 8.77 10.24 8.47
Table 13: Ratios for activities
As shown, the company’s peak operating profit margin is in the year 2011, but has since slowly
decreased until 2014. This is due to the dawdling market of the construction industry, which has
also caused the low asset and inventory turnover in 2015.
22. 13
(iii) Debt
2015 2014 2013 2012 2011 Average
Debt Ratio (%) 54.18 55.99 53.14 45.34 44.07 50.53
Times Interest Earned
(times)
13.63 26.09 72.23 16.21 4.76 26.58
Fixed Payment Coverage
Ratio (times)
2.22 5.94 3.43 1.68 2.91 3.24
Table 14: Ratios for debt
As indicated, the company’s debt ratio has increased since 2011 until the year 2014. This is due to
the increase in current liabilities and long-term debt, which overcomes the total amount of equity
in the year 2013. Though, the company was able to pay of some of its debts in the year 2015
because of the strong change in times interest earned from the year 2014 to 2015.
(iv) Profitability
2015 2014 2013 2012 2011 Average
Inventory Turnover
(times)
14.07 18.37 39.55 18.25 10.69 20.19
Average Payment Period
(days)
257 200 246 230 263 239
Total Asset Turnover
(times)
0.61 0.80 0.72 0.54 0.34 0.60
Times Interest Earned
(times)
13.63 26.09 72.23 16.21 4.76 26.58
Gross Profit Margin (%) 12.80 10.67 10.86 12.10 19.34 13.15
Operating Profit Margin
(%)
7.32 9.54 6.5 8.77 10.24 8.47
Net Profit Margin (%) 5.38 8.59 5.96 5.26 5.79 6.20
Return on Total Assets
(%)
11.27 17.70 16.28 24.60 11.65 16.3
Table 15: Ratios for Profitability
23. 14
The company achieved maximum efficiency in generating sales using its assets in 2014 and thus
will give positive outcome in years later. According to the inventory turnover, the company sells
its inventory at most in the year 2013 and it has dropped ever since then.
(i) Market Performance
2015 2014 2013 2012 2011 Average
Return on total assets
(%)
3.49 6.99 4.44 2.84 1.78 3.91
Return on common
equity (%)
7.75 16.11 9.58 5.24 3.22 8.38
Earning per share (RM) 0.05 0.11 0.05 0.03 0.02 0.05
Price/earnings (times) 7.59 2.93 5.14 6.45 9.97 6.41
Price/book ratio (times) 0.55 0.48 0.46 0.34 0.31 0.43
Table 16: Ratios for Market Performance
The investment attractiveness of its common stock appears to have gradually increased from year
2011 to 2014 and decrease during the year 2015. Overall, the firm’s market performance is doing
well because the earning power of investment has gradually increased from year 2011 to year
2014 and slightly decreases in 2015.
24. 15
FORECAST OF FINANCIAL YEAR 2016
Forecast Income statement of2016
Figure 4: Forecast of Financial Year 2016 by percent-of-sales method
Required New funds for forecast 2016
*Assuming that all the current assets and current liabilities are variables to the projected sales.
*Dividends paid is RM0 (as seen in Page 24, annual report 2015) & hence the Dividends payout is 0.
Based on the calculation from Apendices – RNF:
26. 17
With the RNF showing a negative number, this would indicate that with the projected sales growth,
the company does not require any additional external funding from its assets and liabilities. As it is,
the projected current assets and current liabilities, as a percent-of-sales,would be enough to fund the
projected sales.
CONCLUSION
Sycal Ventures remains to be one of the leading companies, especially in construction and also
property development segments. The company has a good reputation and is majorly involved in the
upcoming development in Perak with PKNP. A 12-year contract with Pullman Hotel that lasts until
2022 indicates that they have great competitive advantages over companies where the firm has on-
going projects from Cheras, Sitiawan, Taiping and Ipoh, which would see them snap up a significant
portion of profit in the next 5 – 10 years. Although the firm is currently facing a major drop in cash
flow, which is a troubling concern for the company, where the firm takes a long time to pay accounts
payable. Despite the on-goin difficulties, the companu now has to maintain a strong positive cash flow
after having to bounce back from the down trend chart recently (increased from RM0.31 – around
RM0.38) where they would aim to overcome the amount of debts in the next few years.
With the significant opportunities that they have, the company should focus more on the major
challenges that they are facing which is to be more consistent in selling off its inventories and
maintain a positive cash flow.
Required
New Funds (RNF) = 135.13% (19,303) − 70.20% (19,303) − 5.38% (341,020) (1-0%)
= 26,083.71 − 13,550.87 − 18,346.88
= (RM 5,814.04)
Word Count (from ‘Introduction’ to ‘Conclusion’): 2912 words
45. APP/ 19
Free Cash Fow Formula
Free cash flow =
Operating cash flow – Cash payments planned for investment in long-term assets - Dividends
RNF Formula
Required New Funds (RNF) = A (ΔS) − L (ΔS) − PS2 (1−D)
S S
A/S = Percentage of relationship of variable assets to sales
ΔS = Change in sales
L/S = Percentage of relationship of variable liabilities to sales
P = Profit margin
S2 = New sales level
D = Dividend payout ratio
Percent-of-sales method calculations
CALCULATIONS (QUESTIONk)
Revenue in 2016, forecast growth of 6% 321,717 x (1+0.06) = 341,020
Cost of Sales as percent-of-sales : (280,540) / 321,717 = -87.20%
Administration Expenses as percent-of-sales : (10,854) / 321,717 = -3.37%
Other Operating Expenses as percent-of-sales : (13,211) / 321,717 = -4.11%
Finance Costs as percent-of-sales : (1,727) / 321,717 = -0.54%
Taxation as percent-of-sales : (3,359) / 321,717 = -1.04%
2016 pro forma
Cost of Sales : -87.20% x 341,020 = (297,372)
Administration Expenses : -3.37% x 341,020 = (11,505)
Other Operating Expenses : -4.11% x 341,020 = (14,004)
Finance Costs : -0.54% x 341,020 = (1,831)
Taxation : -1.04% x 341,020 = (3,561)
46. APP/ 20
REFERENCES
Bonescythe, (2015). Sycal - Cycling North. [Blog] Bonescythe Stock Watch. Available at:
http://bonescythe.blogspot.com/2015_02_01_archive.html [Accessed 22 Nov. 2016].
Bonescythe, (2015). Sycal - Venture Higher. [Blog] Bonescythe Stock Watch. Available at:
http://bonescythe.blogspot.com/2015/07/sycal-venture-higher.html [Accessed 22 Nov. 2016].
Bonescythe, (2015). SYCAL (9717) - Sycal - Point of Perak. [online] Sharetisfy.com. Available at:
http://www.sharetisfy.com/2016/07/sycal-9717-sycal-point-of-perak.html [Accessed 22 Nov.
2016].
Corporateinformation.com, (2016). Sycal VenturesBerhad (SYCAL) Company Profile -
CorporateInformation.com. [online] Corporateinformation.com. Available at:
http://www.corporateinformation.com/Company-Snapshot.aspx?cusip=C458G7930
[Accessed 22 Nov. 2016].
Investor.com, (2016). SYCAL: Business Background | I3investor. [online] Klse.i3investor.com.
Available at: http://klse.i3investor.com/servlets/stk/bizbg/9717.jsp [Accessed 22 Nov. 2016].
ITE Build&Interiors, (2015). The future of Malaysia's construction industry. [Blog] ITE
Build&Interiors.Available at: http://www.buildingshows.com/market-insights/malaysia/the-
future-of-malaysia-s-construction-industry-/801800611 [Accessed 22 Nov. 2016].
Mohd Danuri, M., Che Munaaim, M., Abdul Rahman, H. and Hanid, M. (n.d.). Late And Non-
Payment Issues In The Malaysian Construction Industry – Contractors’Perspective.Ph.D.
University of Malaya.
Puredecisions.com, (n.d.). Tactical & Strategic Report on Sycal Ventures. [online] Puredecisions.com.
Available at: http://www.puredecisions.com/PureData/Malaysia/sycal-ventures.html
[Accessed 22 Nov. 2016].
Puspadevi, S. (2015). Obstacles to construction growth. The Star Online. [online] Available at:
http://www.thestar.com.my/business/business-news/2015/01/02/obstacles-to-construction-
growth-low-oil-price-tight-fiscal-measures-and-gst-may-limit-the-sectors-e/ [Accessed 22
Nov. 2016].
Ratings, R. (2016). Malaysia's construction sector to keep growing. The Star Online. [online]
Available at: http://www.thestar.com.my/business/business-news/2016/06/13/construction-
sector-to-keep-growing/ [Accessed 22 Nov. 2016].
Tradingeconomics.com, (2016). Malaysia GDP FromConstruction | 2010-2016. [online]
Tradingeconomics.com. Available at: http://www.tradingeconomics.com/malaysia/gdp-from-
construction [Accessed 22 Nov. 2016].
Tradesignum.com, (2016). SYCAL - SYCAL VENTURES BHD | tradeSignum. [online]
Tradesignum.com. Available at: http://www.tradesignum.com/company/sycal [Accessed 22
Nov. 2016].
Sharetisfy.com, (2016). SYCAL (9717) - Sycal - Finally Coming Out Of Its Shadows. [online]
Sharetisfy.com. Available at: http://www.sharetisfy.com/2015/04/sycal-9717-sycal-finally-
coming-out-of.html [Accessed 22 Nov. 2016].
47. APP/ 21
Sycal Berhad, (2016). Sycal Ventures Berhad - Construction & Infrastructure. [online]
Sycalberhad.com. Available at: http://www.sycalberhad.com/sycal-ventures-berhad---
construction---infrastructure.html [Accessed 22 Nov. 2016].
Sycal Berhad, (2016). Sycal Berhad - Overview.[online] Sycalberhad.com. Available at:
http://www.sycalberhad.com/overview.htm [Accessed 22 Nov. 2016].
Worldwide Company Profile. (2016). SYCAL VENTURES BERHAD. [online] Available at:
http://listofcompanies.co.in/2012/03/18/sycal-ventures-berhad/ [Accessed 22 Nov. 2016].
Wall Street Journal, (2016). SYCAL.MY Company Profile & Executives - Sycal Ventures Bhd - Wall
Street Journal. [online] Quotes.wsj.com. Available at:
http://quotes.wsj.com/MY/SYCAL/company-people [Accessed 22 Nov. 2016].
