GROUP ASSIGNMENT INCLUDE BALANCE STATEMENT AND INCOME STATEMENT

1. INTRODUCTION
Sri Canggih Global Sdn.Bhd is a company of garment manufacturing and was
established on 2006. And has been operated for around 10 years started from year 2006
until now. This company is owned by local entrepreneur, Mr.Nasri bin Saud. The Sri Canggih
Global Sdn. Bhd started the business in year 2006, which they starting with Stiching vendor
for KUB textiles. He start up the business from paid up capital with amount RM100,000.
Mr.Nasri started his business by using his own capital. He also borrowed the capital money
from his friends and relatives.He got the support system for his business from friends, banks
and Mara (Majlis Amanah Rakyat). He tried to survive in his business more than 20 years
without any mentor. The activities of that moment is manufacturing (makers and suppliers of
garments).
A year after they starting a stiching vendor for KUB textiles, they got the licensed
from Ministry of Finance (MOF) which is in 2007. He got better oppurtunity from government
to supply uniform for Program Latihan Khidmat Negara (PLKN) for 2008 until 2011 that worth
RM10 million. This is the first government tender that Sri Canggih Global Sdn.Bhd received.
The aim of this company, is to have their own brand and this motivate from overseas brand.
For example, they are motivated from Adidas, Nike, Puma and other brands that produced
garments product. From that, this motivate the company to produce an uniforms for
government and private sectors. For example is school uniforms, sport uniforms and other
private sector uniforms. Because of the demand keep increasing from time to time, Sri
Canggih Global is sturdy until now.
Sri Canggih Global Sdn.Bhd have their own factory located at Kota Bharu, Kelantan.
The marketing office is located at Sungai Buloh, Selangor. The branch market at Kota Bharu
is focus more in supplying garments to east coast of Malaysia. While the branch at Sungai
Buloh, Selangor is focus more in supplying to southern Malaysia. Mr. Nasri had said that this
is the base for him to expand his business in garment and strenghthen it in Malaysia market.
Marketing Office:
Lot 5B, Lorong Elmina 4, Saujana Utama
47000 Sg Buloh, Selangor
Tel/Fax : 03-60382715
Main Office/Factory:
Lot A-3, Kompleks Kilang SME Bank KB 2,
PT5045 Kawasan Perindustrian Pengkalan
Chepa Fasa 2, Kemumin 16100 Kota Bharu,
Kelantan
Tel No : 09-7715391
Fax No: 09-7715392
The Sri Canggih Global Sdn.Bhd address

2. PRODUCT AND SERVICES
Sri Canggih Global Sdn.Bhd supply variety of uniforms, such as corporate, schools
and other uniforms. For example :
Uniforms and Office Wear
Casual and Sport wear items

3. PROBLEMS AND CHALLENGES OF SRI CANGGIH GLOBAL
SDN.BHD
When we start up a business, there will be the problems and challenges occur that we
cannot avoid but we can reduce it, same goes to Sri Canggih Global Sdn.Bhd. There have
few problems and challenges due to operated this business. The problems are:
Orders
 Sri Canggih Global Sdn.Bhd need to find their own tenders for the business. For
example, sometimes there will be an order, and sometimes there is no orders. The
ordering frequency is up and down.
Capital
 Sri Canggih Global Sdn.Bhd need to buy all the machines by credit from supplier
because they didn’t have any cash to buy all things at the same time.
The Sources
 The raw material that needed in business such as fabric, threat and other things also
need to buy on credit.
Overhead Cost
 Maintenance, wages, rental and others.
Rival
 Politic power that used by his rival to stop Mr.Nasri loan application
Credit
 The biggest problem and challenges is he need to pay about RM 5 million to the
supplier because he did not get any claim for his delivery.

4. FINANCIAL RATIO ANALYSIS
SRI CANGGIH GLOBAL SDN.BHD.
Balance Sheet as at 31 December 2010
2010 2009
RM RM
Property, Plant & Equipment
Land - 10,000
Operational Equipment 96,556 113,011
96,556 123,011
Current Assets
Closing Inventories 185,025 87,606
Cash 286,652 102,900
Accounts Receivable 323,483 1,020,318
T-Bills 59,032 24,165
Prepaid Expenses 30,718 24,700
884,910 1,259,689
TOTAL ASSETS 981,466 1,382,700
Liabilities& Stockholders’ Equity
Current Liabilities
Accounts Payable 637,337 1,075,127
Accrued Expenses 167,008 59,758
Taxes Payable 8,235 8,235
Current portion, mortgage payable - 90,000
812,580 1,233,120
Stockholders’ Equity
Capital Stock 100,000 100,000
Retained Earnings 68,886 49,580
168,886 149,580
TOTAL LIABILITIES & STOCKHOLDER’S EQUITY 981,466 1,382,700
SRI CANGGIH GLOBAL SDN.BHD
Condensed Income Statement for the year ended 31 December 2010
Revenue RM 3,683,209
Cost of sales
Depreciation
(2,990,584)
(16,455)
Gross Profit
Additional Income
676,170
4,468
Operation Cost
Operation Income
Interest
(575,898)
104,740
(80,849)
Income before tax 23,891
Income tax (4,585)
Net Income 19,306

5. Financial Ratio for Sri Canggih Global SDN BHD 2010
Industry Average
Current Ratio 1.3 : 1
Quick Ratio 0.9 : 1
Account receivable as percentage of revenue 25%
Account receivable turnover 110 times
Average Collection Period 22 days
Total Assets to Total Liabilities Ratio 2 : 1
Total Liabilities to Total Assets ratio 0.5 : 1
Net Income to revenue ratio 35%
Net Income to assets ratio 55%
Asset turnover ratio 2.2 :1
Current Ratio = Current Assets
Current Liabilities
= 884,910
812,580
= 1.09 : 1
Current Ratio – For every RM 1 short-term obligation, the company has RM 1.09 of cash and other
short term resources to pay for the financial obligations. Compared to industry average, the company
is not efficient in managing its short term resources to pay for its short term debts.
Quick Ratio = Quick assets (Current Assets – Closing Inventories –
Prepaid Expenses)
Current Liabilities
= ( 884,910 – 185,025 – 30,718)
812,580
= 0.82 : 1
Quick Ratio – For every RM 1 in short term obligation, the company has RM 0.82 in quick assets to
pay for its short-term obligations. Comparing to Industry average, the company is not efficient in
managing its quick resources to pay for its short term debts.
Accounts receivable as = Average Ac Receivable
Percentage of Revenue Sales Revenue
= ((323,483 + 1,020,318)/2)
3,683,209
= 0.18 %
Account receivablesas percentage of revenue
From RM1 sales revenue, the company allows 0.18 cents credit sales. It is good practice to have a
small credit transaction. Based on industry average, the company is efficient in managing cash from
its sales revenues

6. Accounts receivable = Sales Revenue
turnover Average Ac Receivable
= 3,683,209
((323,483 + 1,020,318)/2)
= 5 times
Account receivable turnover
Based on the sales revenue, the company has the ability to collect its debt for 5 times. Comparing to
the Industry average, the frequent number of collection of its debt will give them disadvantage in
holding less cash.
Average Collection Period = 365
Receivables turnover
= 365
5
= 73 days
Average collection period
In one year, the company only needs 73 days for collection of its debt. It can be concluded that the
company has worse collection of debt and receive cash for other business purposes as compared to
the industry average.
Total Assets to Total = Total Assets
LiabilitiesRatio Total Liabilities
= 981,466
812,580
= 1.2 : 1
Total Assets to Total Liability ratio
For every RM 1 in financial obligation, the company has RM 1.2 to pay for the financial obligation and
as compared to the industry average; the company’s performance is critical to pay debts with
available resources.
Total Liabilitiesto Total = Total Liabilities
Assets Ratio Total Assets
= 812,580
981,466
= 0.8 : 1
Total liabilitiesto total assets ratio
In every RM 1 resources that the company has, the company needs debt of RM 0.80 to run its
operation. The company does have more cash or resources to run the operation.
Net Income to Revenue = Net Income
Ratio Sales Revenue
= 19,306
3,683,209
= 0.5%
Net Income to revenue ratio
From RM 1 sales revenue, the company can generate 0.50 cents net income. The company generate
not satisfy net income from its sales revenue. As comparing to the Industry average, the company is
not better off in this ratio. It means the company needs to minimize its operational expenditures.

7. Net Income to Assets = Net Income
Ratio Total Average Assets
= 19,306
(981,466 + 1,382,700)/2
= 1.6%
Net Income to assets ratio
From RM1 available resources, the company can generate 1.60 cents net income. Comparing with
industry average, the company is not efficient in utilizing the resources to generate net income.
Assets Turnover Ratio = Sales Revenue
Total Average Assets
= 3,683,209
(981,466 + 1,382,700)/2)
= 3.12 : 1
Asset turnover ratio
From RM 1 investment in assets, the company can generate RM 3.12 sales revenue. The company is
effective in utilizing its resources to generate sales revenue compared to industry average.
CONCLUSION
it can be concluded that the company has a bad financial performance. Most of the ratios recorded
worse performance against the industry average. In addition, investors feel doubt because the
company is at below level compared to the industry player’s performance.

8. SRI CANGGIH GLOBAL SDN BHD
Balance Sheet as at 31 December 2011
2011 2010
RM RM
Property, Plant & Equipment
Operational Equipment 90,666 96,556
90,666 96,556
Current Assets
Closing Inventories 94,080 185,025
Cash 288,365 302,652
Accounts Receivable 272,880 323,483
T-Bills 40,580 59,032
Prepaid Expenses 30,718 30,718
726,623 900,910
TOTAL ASSETS 817,289 997,466
Liabilities& Stockholders’ Equity
Current Liabilities
Accounts Payable 568,226 637,337
Accrued Expenses 40,324 183,008
Taxes Payable 18,236 8,235
626,786 828,580
Stockholders’ Equity
Capital Stock 100,000 100,000
Retained Earnings 90,503 68,886
190,503 168,886
TOTAL LIABILITIES & STOCKHOLDER’S EQUITY 817,289 997,466
SRI CANGGIH GLOBAL SDN BHD
Condensed Income Statement for the year ended 31 December 2011
Revenue RM 2,636,245
Cost of Sales
Depreciate
2,136,353
17,630
Gross profit
Additional Income
482,262
233
Operation Cost
Operation Income
Interest
(402,362)
80,133
(53,837)
Income before tax 26,296
Income tax (4,679)
Net Income 21,617

9. Financial ratio for Sri Canggih Global SDN BHD 2011
Industry Average
Current Ratio 1.3 : 1
Quick Ratio 0.9 : 1
Account receivable as percentage of revenue 25%
Account receivable turnover 110 times
Average Collection Period 22 days
Total Assets to Total Liabilities Ratio 2 : 1
Total Liabilities to Total Assets ratio 0.5 : 1
Net Income to revenue ratio 35%
Net Income to assets ratio 55%
Asset turnover ratio 2.2 :1
Current Ratio = Current Assets
Current Liabilities
= 762,623
626,786
= 1.21 : 1
Current Ratio – For every RM 1 short-term obligation, the company has RM 1.21 of cash and other
short term resources to pay for the financial obligations. As comparing to the industry average, it can
be concluded that the company is not efficient to the most of the industry players.
Quick Ratio = Quick assets (Current Assets – Closing Inventories –
Prepaid Expenses)
Current Liabilities
= (762,623– 94,080– 30,718)
626,786
= 1.02 : 1
Quick Ratio – For every RM 1 in short term obligation, the company has RM 1.02 in quick assets to
pay for its short-term obligations. As comparing to the industry average, it is noted that the company
is efficient in managing its short term transactions
Accounts receivable as = Average Ac Receivable
Percentage of SR Sales Revenue
= ((272,880+ 323,483)/2)
2,636,245
= 0.11%
Account receivablesas percentage of revenue
Of the entire sales revenue, the company only gives small credit sales for every RM 1 in short
obligation, the company has RM 0.11 as compared to the cash sales. It is a good practice to have a
small credit transaction as compared to the cash transactions. By looking at the industry average, the
company is effective in making cash sales.

10. Accounts receivable = Sales Revenue
Turnover Average Ac Receivable
= 2,636,245
((272,880+ 323,483)/2)
= 9 times
Account receivable turnover
Based on the sales revenue, the company has the ability to collect its debt for 9 times. In Account
receivable turnover, the frequent number of collection of its debt will give them disadvantage in
holding less cash. By comparing with the industry average, it shows that the company has worse in
establishing credit sales.
Average Collection Period = 365
Receivables turnover
= 365
9
= 41 days
Average collection period
The company only needs 41 days for collection of its debt. It can be concluded that the company has
worse collection of debt as compared to the industry average.
Total Assets to Total = Total Assets
LiabilitiesRatio Total Liabilities
= 817,289
626,786
= 1.3 : 1
Total Assets to Total Liability ratio
For every RM 1 in financial obligation, the company has RM 1.30 to pay for the financial obligation
and as compared to the industry average; the company’s performance is slightly lacked behind.
Total Liabilitiesto Total = Total Liabilities
Assets Ratio Total Assets
= 626,786
817,289
= 0.77 : 1
Total liabilitiesto total assets ratio
In every RM 1 resources that the company has, the company needs debt of RM 0.77 to run its
operation. It is at the under level with the industry average.
Net Income to Revenue = Net Income
Ratio Sales Revenue
= 21,617
2,636,245
= 0.82 %
Net Income to revenue ratio
From total sales revenue, the company can generate 0.82 cents net income. The company generate
dissatisfactory net income from its sales revenue. As comparing to the Industry average, the company
is better off in this ratio. It means the company needs to minimize its operational expenditures

11. Net Income to Assets = Net Income
Ratio Total Average Assets
= 21,617
(817,289 + 997,466)/2
= 2.38%
Net Income to assets ratio
With the total investment in assets and the short-term resources that the company has, it can
generate 2.38 cents. The company is not efficient in generating returns from the investment and the
comparison with industry average confirms this conclusion.
Assets Turnover Ratio = Sales Revenue
Total Average Assets
= 2,636,245
(817,289 + 997,466)/2
= 2.91 : 1
Asset turnover ratio
For every RM 1 investment in assets, the company can generate RM 2.91 sales revenue. It means
the company can make revenues for the investment or the short term assets that it has invested. The
company performance is better than most of the industry players.
CONCLUSION
It can be concluded that the company has a bad financial performance. Most of the ratios recorded
worse performance against the industry average. In addition, investors feel not confidence because
the company is under level with most of the industry player’s performance.

12. ANALYSIS THE INCOME STATEMENT AND BALANCE SHEET
As comparing to the financial ratio for both years 2010 and 2011, on our observation
in income statement and balance sheet Sri Canggih Global Sdn. Bhd, the company was
facing lost for both years. From calculation in current ratio, both years was under the level
of industry average but the ratio in 2011 is better than 2010 because the total of liabilities of
the company was greater than the total assets. Same goes to quick ratio which is in 2011,
the ratio is 1.02:1 while in 2010 the ratio is 0.82:1 that was showing the company is more
efficient on 2011 in managing their short term transaction. Account receivables as
percentage of revenue in 2011 have a small credit sales that shows the company achieved
to decrease their credit sales compared to 2010 even though the ratio in industry average
much better in their performance. For the collections of its debt, the company has more
advantage in collecting their debt more frequent in order to increase their cash in year
2011. For 2010, average collection period is 73 days while on 2011, its only need 41 days
for collection its debt but the performance of the company has worse collection of debt as
compared to the industry average. Moreover, on total assets to total liabilities ratio for 2011
and 2010 there was slightly different in paying for the financial obligations. In 2011, the
company obtained more cash to run the operation in total liabilities to total assets ratio. The
company generate dissatisfactory net income for both years its sales revenue. As
comparing to the Industry average, the company is better off in 2011. It means the
company needs to minimize its operational expenditures. For net income to assets ratio,
the company is not efficient in generating returns from the investment on year 2010 and the
comparison with industry average confirms this conclusion. Lastly, assets turnover ratio for
2010 is 3 times that shows the company has better performance rather than year 2011
which is only 2 times. It can conclude that the company has bad financial performance.
Most of the ratio recorded loss against the industry average. So, the investor feel in doubt
to invest in this business.

13. CONCLUSION TO THE PERFORMANCE
Based on the performance according to income statement and balance
sheet from year 2010 and year 2011, Sri Canggih Global was in critical situation.
This is because the income statement and balance sheet is not working well.
Based on that study, the Sri Canggih Global Sdn.Bhd should reduce the cost
of production. This is because, the cost of production is too higher, that’s why they
should reduce it to avoid any bad circumstances happened.
Other than that, they also have to manage the cost of administration which is
they must reduce the cost itself. For example, they have to manage the salaries of
workers properly. This is also happen because of the problem occurs when they
didn’t received the modal. Means that, the modal will receiving, but it really takes
time to received. So, Sri Canggih Global Sdn.Bhd buy all the raw materials in credit
because they not have enough money to pay the all material in cash. So that’s why
they buy it in credit.
Now, they should recover all the cost, when the money received from the
customers whether government or private sectors.

14. FUTURE DIRECTIONOF THE COMPANY
Every company have their own target for future direction as well as Sri Canggih
Global Sdn.Bhd. For future direction of Sri Canggih Sdn.Bhd, according to the pioneer of the
company which is Mr. Nasri, the networking for Sri Canggih Global getting larger. So these
are the benefit to Sri Canggih Global itself. So, Mr.Nasri will merge with Uniform Gallery to
be their business partner and open a retail shop of Uniform Gallery.
In future direction from analysis that we get, we predict that 2010 until 2011 Sri
Canggih Global Sdn.Bhd has been faced loss, so to overcome this for the future purposes
the profitability is an important element that helps a business gain market share, giving
corporate managers the means to innovate and produce better goods. As an entrepreneur,
the manager should strategically manage the profit and loss (P&L). A positive P&L plants the
seeds for a stable economic future for Sri Canggih Global Sdn.Bhd.
Next, devise a business strategy, It is never a good sign when a business starts
losing money or when the returns on its investments are low or non-existent. Failure to
generate enough revenue to cover operating expenses means the business will most likely
be saddled with debts. To consistently make money, it’s important for a business to have a
set strategy, whether that’s to become a market leader, be number one in providing excellent
customer service, or be recognized as a top innovator in the industry.
Sri Canggih Global Sdn.Bhd, should make a strategists often break down a master
plan into smaller, more detailed initiatives called tactics. For example, if the company’s
strategy is to be one of the top five players in its sector, write down the tactics and action
plans that can help achieve that goal. They may consider things like reducing costs,
expanding revenue, advertising in select or previously ignored markets, and upgrading the
company technological infrastructure, including computers and servers.

15. REFERENCES
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and-reporting/business-tax-levies/what-to-do-if-your-business-is-operating-at-a-loss
 Anonymous Blogger. Retrieved June 12,2015 from
https://www.smallbusiness.wa.gov.au/business-topics/planning-structures/business-
structures/partnership
 A current. ( 2015). In Encyclopedia Britannica. Retrieved June 10, 2015. From
http://www.businessdictionary.com/definition/financing.html
 Anonymous Blogger. Retrieved June 12,2015 from
http://www.businessbee.com/resources/profitability/accounting/how-to-effectively-
manage-your-companys-profit-and-loss/
 Markgraf,B. (n.d.) How to Evaluate a Company's Performance. Chron Media.
Retrieved June 10,2015, from http://smallbusiness.chron.com/evaluate-companys-
performance-67095.html

16. APPENDICES
Company Licensed