Satani Plantation Berhad Case Study

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1.0 GENERAL BACKGROUND AND BUSINESS LINE SARAWAK PLANTATION BERHAD [S] (5135) Sarawak Plantation Berhad (SPB) is one of the earliest company in the oil palm industry in Sarawak. It was incorporated in Malaysia on 28 October 1997 as a private limited company under the name of Sarawak Plantation Sdn. Bhd. SPB started their business in the same year. SPB was specially incorporated as the vehicle company for the privatisation of Sarawak Land Development Board’s (SLDB) assets. Though the transfer of SLDB’s assets to SPB Group (comprising SPB and its subsidiaries) in 1997, it effect the privatisation of SLDB’s assets including oil palm plantations, milling facilities and related assets. All principal assets of SLDB are owned and managed by SPB …show more content…

Its net profit margin has decreased 0.0056 compared to previous year. A higher ratio for net profit margin has showed that the company has a better ability to cover their operating costs includes indirect costs. Return on assets showed a declined ratio as 0.0477 which is worsen than 2012. This means Sarawak Plantation Berhad does not have the ability to turn their assets into profit compare to 2012. The return on equity ratio of Sarawak Plantation Berhad is decreased 0.0171 compared to 2012. This indicates that the company is using its shareholder’s funds ineffectively and failed to maintain a positive earnings trend. Accounts receivable days is the number of days that a customer invoice is outstanding before it is collected. Sarawak Plantation Berhad has a longer collection period as 21 days in 2013. The company has a bad quality of credit sales and receivables. Sarawak Plantation Berhad is more financially stable with a lower debt to equity ratio compared to 2012. The company is slightly less risky because more shareholders financing is used than creditor financing. The times interest ratio is considered a solvency ratio. Higher ratios are less risky while lower ratios indicate credit risk. Sarawak Plantation Berhad’s income is 33 times greater than its annual interest expense in 2013. The company can afford to pay its interest payments when they come

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