The balance sheet and income statement of year 2008 of Mongs Snd Bhd been

used to analyse the financial performance of the company by compare it to year

2007. This interpretation method for this is trend analysis as the financial data
that been used is from current and previous year.
Financial ratio is an analysis tools to interpret and evaluate the companys
performance. First indicator is a liquidity ratio. Liquidity ratios is an indicator to
measure how liquid the company to meet short term obligation. This company
has a better current ratio compare to last year. The company is more liquid than
last year as every 1 ringgit debt the company is able to pay 1.79 times compare
to year before which is only 1.7 times. While for quick ratio, this company is in
satisfactory level as the ratio is not changed from last year which is 1.0 times.
Second indicator to measure financial performance is the activity ratios which we
can measure the efficiency of assets of company. Under activity ratio we only
measure inventory turnover and average collection period. For inventory
turnover Mongs Snd Bhd is in poor level as the ratio is decreasing from 7.0 times
in year 2007 to 5.77 times in 2008 for the inventories to generate sales. The
average collection period for this company is increasing from 40 days in previous
year to 53 days in current year. This indicates the poor in effectiveness for the
company to collect debt from consumer. This can cause the problem for the
company.
Thirdly is the laverage or solvency ratios. The companys debt ratio is better than
last year. The percentage for the amount of debt to finance asset decreasing
from 49% to 46.91%. This shows that the company is able to pay the debt and
the increasing the amount of asset of the company. As for time interest earned
(TIE), it is in poor level. In 2007 the TIE is 12 times while in 2008 it is 7.21 times.
The decreasing of it had shown that the company ability to meet the loan
requirement is decreasing.
The last one indicator to measure the companys performance is the profitability
ratios. The net profit margin current year for this company is decreasing from
previous year from 12% to 8.30%. This shows that the income for shareholders is
decrease from last year. The company net profit also decreases indicates the low
sales performance for the company. As for return on assets, it is also decreasing
from 25% to 17.25%. The return on companys investment is also decrease.
In conclusion, the Mong Snd Bhd financial performance is in good condition as
the company is able to pay the debt although the ability to collect debt from
consumer is decreasing from last year. The amount of debt to assets is
increasing indicates the amount asset of the company is better than previous
year.