Analysis Of Dutch Lady Milk Industries Berhad Finance Essay

Dutch lady is a company that accent on the production of the day-to-day merchandise such as sweetening, yoghurt, fresh milk and milk pulverization. Dutch lady had been get downing their concern in Malaysia since 1950 ‘s. The history of Dutch Lady Corporation in Malaysia Begins after World War II, Dutch lady was among the several trade names that imports the sweetened condensed milk from it ‘s parents company in Holland via local importers and jobbers.

In 1954, Atrading company Friesland ( Malaya ) Pte. Ltd. based in Singapore was formed to market the sweetened condenses milk imported from Holland in Malaya and Singapore. Dutch lady had joined the peculiar company with the trade name name Dutch Baby.

In 1963, Pacific Milk Industries ( Malaya ) Sendirian Berhad was incorporated in Malaysia with the commissioning of a sweetened milk mill in Petaling Jaya. This mill was the first oversea production mill of the parent company. The Company has begun their operation in the late 1965 and started to fabricate sweetened condensed milk with the licences from the parent company.

In twelvemonth 1968, Pacific Milk industries ( Malaya ) were converted into a public company and became the really first day-to-day production company that listed in the Stock of Exchange of Kuala Lumpur and Singapore.

The name of the company was changed from Pacific Milk Industries Berhad to Dutch Baby Milk Industries ( Malaya ) Berhad in the hope to avoid the confusion in the trade and market place environing the name of the company. The company had accent on the production of the Dutch Baby Sweetened Condensed Milk. In line with the Company ‘s variegation programmed, the Company commissioned and built an Ultra Heat Treated Milk Plant. Locally packed Dutch Baby Modified Baby Food was besides introduced in the same twelvemonth.

Dutch Baby Milk Industries ( Malaya ) Berhad had sought for variegation in their merchandise by introduces the new fruit juice drink merchandise under the JOY trade name name in twelvemonth 1979. Dutch Baby Milk Industries ( Malaya ) Berhad besides concern the safety of their merchandise by presenting the sterilized milk in fictile bottles in the 1983.

In twelvemonth 1984, Dutch Baby Milk Industries ( Malaya ) Berhad one time once more change their name to Dutch Lady for merchandise positioning ground. In late 1985, a 3 floor edifice was build to house the Milk Powder wadding works as their concern grew. During 1987, the Company underwent an equity restructuring exercising to follow with the Government ‘s New Economic Policy. The portion capital was enlarged to RM16.0 million. In the same twelvemonth Dutch Lady had the production of pasteurised milk in their production. Dutch Lady had introduced the yoghurt and turning up milk in the late 1988 as the scheme to vie with their rivals. Dutch lady Milk Industries had delisted from the Stock Exchange of Singapore in 1989, In conformity with the Government ‘s national policy to pro mote the Kuala Lumpur Stock Exchange.

In 1994, Dutch Lady Milk industries have their new milepost in the Dairy Product production. A new warehouse was built to suit the company ‘s turning concern. Human capital started to spread out in line with organisational demands. It is really thankful that Dutch Lady Milk Industries has obtained enfranchisement under the ISO 9001 criterions.

In 1999, Dutch Lady received the Reader ‘s Digest Super Brands Gold Award for being voted the preferable trade name of milk merchandises in Malaysia. In the same twelvemonth The Dutch Lady UHT Plant besides received HACCP ( Hazard Analysis Critical Control Point ) enfranchisement from the Ministry of Health.

In twelvemonth 2000, Dutch Lady received its 2nd Reader ‘s Digest Super Brands Gold Award for being voted the preferable trade name of milk merchandises in Malaysia. The Company changed its name from Dutch Baby Milk Industries ( Malaya ) Berhad to Dutch Lady Milk Industries Berhad, to be in line with its chief trade name Dutch Lady with a new committedness “ Goodness for Life ” .

In twelvemonth 2001, Dutch Lady received its 3rd Reader ‘s Digest Super Brands Gold Award for being voted the preferable trade name of milk merchandises in Malaysia and in twelvemonth 2002 Dutch Lady won the Brand Equity award for liquid milk. In the same twelvemonth Dutch Lady Sterilized Milk Plant one time once more received HACCP ( Hazard Analysis Control Point ) enfranchisement from the Ministry of Health. By the manner Dutch Lady received its 4th Reader ‘s Digest Super Brands Gold Award for being voted the preferable trade name of milk merchandises in Malaya

The Company ‘s portion capital was increased from RM16.0 million to RM64.0 million via a 3 for 1 fillips issue, in conformity with the so Kuala Lumpur Stock Exchange opinion. In 2003, Dutch Lady upgraded the ISO 9001:1994 enfranchisement to ISO 9001:2000 criterion. Dutch Lady launches a scope of DHA-enhanced milk merchandises for babies and immature kids. Again, The Dutch Lady Powder Plant received HACCP ( Hazard Analysis Critical Control Point ) enfranchisement from the Ministry of Health.

In 2003 besides Dutch Lady received its 5th Reader ‘s Digest Super Brands Gold Award for being voted the preferable trade name of milk merchandises in Malaysia. Nutrition for Vitality Dutch Lady revamped its trade name image and packaging with the new corporate tagline “ Get Ready For Life! ” to profile verve through healthy life styles and activities.

In 2004 Dutch Lady received its 6th back-to-back Reader ‘s Digest Super Brand Gold Award for being voted the preferable trade name of milk merchandises in Malaysia. Dutch Lady Corporation did non bury their societal duties to the society in 2006 Dutch Lady donated RM70000 worth of merchandises to Deputy.Prime Minister for the Johor inundation victims. In the twelvemonth of 2004 besides Dutch Lady Milk Industries Berhad had won the Award given by National Productivity Corporation ( NPC ) . The aims of the award are to acknowledge the company ‘s outstanding productiveness direction, sweetening and the importance of productiveness betterment towards economic development in Malaya

Among the merchandise that produce by Dutch Lady Milk Industries includes ; for the turning kids Dutch Lady had produce the undermentioned merchandise:

DL Yes!

DL Langkah 1

DL Langkah 2

Deciliter 123Growing up Milk

Deciliter 456Growing up Milk

Frisolac Gold 1

Frisolac Gold 2

Friso Gold 3

Friso Gold 4

For the household ;

DL Low Fat Yoghurt

DL UHT Milk

DL Sterilized Milk

DL Pasteurized Milk

DL Milk Powder

DL Cream pitchers

Joy Juice

For the immature grownups

DL Shine

DL iced Latte

2.0 METHODOLOGY

Our group had used the secondary resources, Internet to carry through the assignment given. We had refer to these web sites to obtain ours information and the fiscal statement of the company.

hypertext transfer protocol: //www.dutchlady.com.my/en/home.asp

hypertext transfer protocol: //www.icongrouponline.com/pr/Dutch_Lady_Milk_Industries_Berhad_MY/PR.html

hypertext transfer protocol: //www.dutchlady.com.my/en/home.asp? page=financial & A ; subpage=annual

hypertext transfer protocol: //www.dutchlady.com.my/sharedfiles/financial/files/DL_QuarterlyReport_Dec06.pdf

hypertext transfer protocol: //www.dutchlady.com.my/sharedfiles/financial/files/DL_QuarterlyReport_Dec07.pdf

hypertext transfer protocol: //www.dutchlady.com.my/sharedfiles/financial/files/DL_QuarterlyReport_Dec08.pdf

We besides refer to the press release that given by the lector to work out the ratio in order to complete our fiscal analysis for the company. We had use several expression to work out the computation in the press release and we besides refer to our text edition for the troubles that faces by us. Financial ratio analysis includes liquidness ratio, plus direction ratio, profitableness ratio and purchase ratio. Below are the lists of the expression that we use for this assignment.

Current Ratio

Higher figure means the concern fiscal status is better as it has adequate liquid assets for its operation.

Quick Ratio

Higher figure shows the concern has plenty speedy assets to cover its short-run debt instantly.

Average Collection Period

Comparison of this ratio with recognition period will mensurate the efficiency of the house to roll up its debt.

Inventory Employee turnover

Higher figure shows that the house ‘s stock list moves more rapidly, intending that stock list will be sold and replaced more often.

Entire Asset Employee turnover

This ratio will bespeak how much of gross revenues can be generated from every dollar of the house ‘s plus. Higher consequence shows that the house manages its plus efficaciously.

Debt Ratio

Lower ratio is better. It means more coverage earn by creditors if the house goes bankrupt.

Time Interest Earn Ratio

The ratio indicates house ‘s ability in paying involvement. Higher ratio shows better ability in run intoing involvement payment.

Net Net income Margin

Higher ratio is better because it shows the reduction in disbursals or cost in bring forthing gross revenues.

Tax return on Equity

Higher ratio is better because it shows that the house can bring forth better return to the proprietor of the house.

4.0 Decision

In decision, Dutch Lady Milk Industries Berhad Malaysia ‘s liquidness has becomes better from the twelvemonth 2006 to 2008. Although the current ratio has decrease from 2006 to 2007 which is from 1.773 times to 1.414 times but the ratio additions from twelvemonth 2007 to 2008 which is from 1.414 times in twelvemonth 2007 rise to 1.737 times in twelvemonth 2008. It shows that the concern fiscal status is going better where it has adequate liquid plus of its operation in twelvemonth 2008.

Based on the speedy ratio, the house ‘s liquidness is non stable from the twelvemonth 2006 until 2008, which it has lessenings from 1.148 times to 0.702 times. The reduced ratio shows that the concern might non hold plenty speedy assets in twelvemonth 2007 to pay its short term debt instantly compare to twelvemonth 2006. However the ratio increases to 1.134 times in twelvemonth 2008 and this mean the company have plenty speedy assets to pay their short term debts.

The Dutch Lady Milk Industries Berhad had become less efficient in roll uping its history receivable from twelvemonth 2006 to 2008 which the mean aggregation period has additions from 45.6 yearss to 59.39 yearss. These figures show that the concern demand to take longer clip in twelvemonth 2008 comparison to twelvemonth 2006 to roll up its debt.

Based on the entire assets turnover, the company has manages its assets more efficiency in twelvemonth 2006 comparison to twelvemonth 2007 and 2008 which is lessening from 2.43 times to 2.067 times and increase back to 2.41 times in 2008. This means that more gross revenues have been generated from every Ringgit Malaysia of the company assets in twelvemonth 2006 comparison to 2007 and 2008

The fixed assets turnover has besides increased from 9.321 times in twelvemonth 2006 to 10.11 times in twelvemonth 2007 and 10.62 times in 2008. The increasing in this ratio shows that the company has been more effectual in produces the concern gross revenues from its fixed assets.

Profitability Ratios is steps that indicate how good a house is executing in footings of its ability to bring forth net income.

Tax return on assets ( ROA ) is use to bespeak how profitable a company is comparative to its entire assets. Base from the computation, it was show that the return on assets is lessening from 20.4 % ( twelvemonth 2006 ) to 16.04 % ( twelvemonth 2007 ) and 14.4 % ( twelvemonth 2008 ) , more higher value ( % ) is calculated that means higher return on assets, so the return on entire assets is obviously decrease 6 % from twelvemonth 2006 until twelvemonth 2008.

Net net income border is use to steps howA much outA of every ringgit MalaysiaA of gross revenues a company really keeps in gaining. Base from the computation, it was show that the net net income border is decrease from 8.4 % ( twelvemonth 2006 ) to 7.8 % ( twelvemonth 2007 ) and 6 % ( twelvemonth 2008 ) , so that means the Dutch Lady Milk Industries Berhad has a net income of RM0.084 for each ringgit Malaysia of gross revenues in twelvemonth 2006, but it was lessening to RM0.078 for each ringgit Malaysia of gross revenues in twelvemonth 2007 and RM0.06 in twelvemonth 2008.

Tax return on equity ( ROE ) is measures a corporation ‘s profitabilityA by uncovering how muchA net income a company generatesA with the money stockholders have invested.A Base from the computation, it was show that the return on equity is increase from35.6 % to 37.13 % ( twelvemonth 2007 ) but lessening to 26.4 % ( twelvemonth 2008 ) . Higher value ( % ) is calculated that means the common shareholders of the house will have more return on their equity investing, so the return on equity was bespeak the accounting return on the common shareholders ‘ investing was obviously increase 1.5 % from 2006 to 2007 and diminish 10.73 % from twelvemonth 2007 until twelvemonth 2008. In a decision, the calculated was bespeaking the Profitability Ratios of Dutch Lady Milk Industries Berhad at twelvemonth 2006 is better than twelvemonth 2008.

The debt ratio of Dutch Lady Milk Industries Berhad addition from 42.8 % to 56.8 % from twelvemonth 2006 to 2007 and diminish from 56.82 % ( twelvemonth 2007 ) to 45.3 % ( twelvemonth 2008 ) .Although the company need equal short term adoption in twelvemonth 2007 to cover their operation but in twelvemonth 2008 the company ‘s short term adoption shows the obvious diminution. This shows that in the twelvemonth 2007 the company entire debt is higher than the twelvemonth of 2008, and this prove that the company manage to diminish their debt and doing their entire plus addition throughout the twelvemonth before to the following twelvemonth. This besides shows that the company has the ability to pay up their liabilities and due to this its shows that this company has a low fiscal hazard where the per centum of debt ratios is diminishing after the coming twelvemonth. Apart from that, this show that the house ‘s assets that financed by debt is used efficaciously where the ratio is lower than in the twelvemonth 2007 because less debt in funding consequences in shows less fiscal hazard.

The clip involvement earned of Dutch Lady Milk Industries Berhad is addition from 126.98 times to 264.33 times from 2006 to 2007 and diminish from 264.33 times ( twelvemonth 2007 ) to 196.47 times ( twelvemonth 2008 ) . This is because the gross for company has addition from 2006 to 2007 and diminish along two old ages which are 2007 and 2008. At the same clip, the involvement disbursals for company have addition along three old ages. This is because possibly the company non able to bring forth sufficient gross so that they need to increase their loan. As a consequence, it leads to increase and diminish in clip involvement earned. Through this, the company shows that they need to better their ability in run intoing involvement payment. This ratio used to mensurate the figure of times the house has gained to pay involvement disbursals. The higher the ratio is better because it shows the ability in run intoing involvement payment.