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Accounting & Its Regulatory Framework of Scomi Group Bhd

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Introduction

´╗┐KOLEJ LINTON B.A (Hons) Business Studies assignment REPORT Accounting & Its Regulatory Framework of Scomi Group Bhd Prepared by: Student 1: U0959729 (UEL ID) / R486374 (Passport ID) Student 2: U0959731 (UEL ID) / N06273071 (Passport ID) School of Business & Management Linton College 12/November/2010 Table of Contents Acknowledgmentpg.3 Introductionpg.4 Financial Ratio Analysis: Liquidity Ratiospg.5-7 2.1 Cash (working capital) ratio pg.5-6 2.2 Quick asset (acid test) ratio pg.6 2.3 Stock (average inventory) turnover period pg.6 2.4 Average debtors collection period pg.7 2.5 Cash or operating cycle pg.7 Working Capital and Cash Flow Statement pg.8 4. Scomi Group Bhd. annual report pg.9-10 Concepts, Conventions and Regulation of Scomi annual reportpg.9 4.2 Directors? report, the auditor?s report and the chairman?s statementpg.9-10 5. Qualitative & Quantitative point of Scomi Group Bhd.pg.11 Qualitative pointpg.11 5.2 Quantitative point pg.11 6. Conclusionpg.12 7. Appendixpg.13-18 8. Bibliographypg.19 Acknowledgment I would like to thank God for all His blessings. A lot of people have played a very important role in the successful completion of this report. In this section, I would like to express our appreciation for those who help our group directly and indirectly in our work. I would like to thank our group member for the valuable advice and support he has given me in the writing of this report. I would also like to thank my teachers, Mr. Alfred for his encouragement and guidance. My deepest thanks go to my fellow classmates for their understanding and support. ...read more.

Middle

This means that Scomi can get a clear picture to predict when their cash become solvent. Working Capital and Cash Flow Statement According to Calberg (2008), cash refers to the most liquid asset of the company. Many investors are mostly interested with value of cash that company has. By analyzing company cash flow the investor can get the measurement of company management performance that related to company funds. To focus more on the analysis of company funds, investor need to include concept of working capital. ?Working capital refers to the amount of money that a company has tied up in funding its day to day operations? (Pietersz, 2005-2010). This is done by analyzing the Scomi cash and working capital based on their cash flow statement for FYE 2008 and FYE 2009. According to cash flow statement for operating cash flow before working capital changed, in 2008 it was RM230,740 and has decreased to RM207,452 by 2009 (refer appendix 3 and 3.1). However, after working capital changed, the net operating cash flow was RM52,232 in 2008 and increased to RM149,401 in 2009. In summary, by including working capital, it acts as an important measure of company?s financial stability. According to both result in 2008 and 2009, Scomi cash flow statements and Scomi assets have been decreased after included the changes in working capital. From this data, investors can see a more accurate data of Scomi funds for their investment analysis. ...read more.

Conclusion

2009 average stock period: = 78 days 1.4 debtor collection period calculation Average debtors collection period: FYE 2005 average collection period: = 95 days FYE 2006 average collection period: = 93 days FYE 2007 average collection period: = 98 days FYE 2008 average collection period: = 104 days FYE 2009 average collection period: = 108 days 1.5 Cash cycle calculation Cash or operating cycle: average stock period + average collection period FYE 2005 cash cycle: 79 days + 95 days = 174 days FYE 2006 cash cycle: 78 days + 93 days = 171 days FYE 2007 cash cycle: 81 days + 98 days = 179 days FYE 2008 cash cycle: 77 days + 98 days = 175 days FYE 2009 cash cycle: 78 days + 108 days = 186 days Financial ratios for liquidity ratios data, chart and graph: 2. Liquidity ratios table Metric YEAR 2005 2006 2007 2008 2009 Cash (Working Capital) ratio 1.49 1.60 1.56 1.50 1.43 Quick asset (acid test) ratio 1.10 1.22 1.11 1.10 1.14 Stock (average inventory) turnover period 79 78 81 77 78 Average debtors collection period 95 93 98 104 108 Cash or operating cycle 174 171 179 175 186 2.1 Cash ratio Graph 2.2 Quick ratio Graph 2.3 Stock turnover period Graph 2.4 Debtors collection period Graph 2.5 Cash cycle Graph Cash flow statement analysis FYE 2008 and FYE 2009: 3 Cash flow statement 2008 and 2009 Metrix Year 2008 2009 Cash Flow Statements (before working capital changes) 230,740 207,452 Cash Flow Statements (after working capital changes) 52,232 149,401 3. ...read more.

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