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PADINI HOLDINGS

Padini Holdings Berhad is a Malaysia based investment holding company. The


company sells both mens and ladies shoes and accessories, garments,
ancillary products, childrens garment, maternity wear and accessories
through various subsidiaries. Its most prominent brands are Padini and
Vincci. Its goods are exported to mainly The Middle East and Southeast Asian
countries.
Padini its goods are sold in retail flagship stores and concept store. The
Padini Concept Store is a concept which houses all Padini Holdings brands
under one roof or one stop shopping. The first of such outlets was opened in
Johor Bharu, Malaysia in 1999. Padini Holdings Bhd focuses on fast retailing,
where new product come online within weeks.
Padini began operation as Hwayo Garments Manufacturers Company in 1971,
it is was affiliated in garment manufacturing and wholesaling. It entered the
retail industry in 1975 with flagship brand Padini. VINCCI was established to
market ladies shoes, bags, belts and and other accessories in 1986. Many
brands including MIKI, SEED, ROPE, P & Co. and PADINI AUTHENTIC labels
were launched in the following decades.
In 1991, Home Stores Sdn Bhd was launched to hold all the companies
involved in the Group retail, wholesale and manufacturing businesses. It was
subsequently renamed to the present Padini Holding a year later. In 1995,
Padini Holdings Sdn Bhd was converted to a public company limited by
shares and adopted the name, Padini Holdings Berhad and soon listed on the
Second Board of the then Kuala Lumpur Stock Exchange.
The year 2000 witnessed the establishment of Padini Dot Com Sdn Bhd to
provide electronic bussines services and solutions for the group. Padini

Holdings was transferred to the Main Board of the KLCI Bursa Malaysia in
2005.

RATIO OF PADINI HOLDING

1) Profitability ratios

I.
-

Return on capital employed ratio

The return on capital employed ratio (ROCE) shows whether the people
who invested money in the bussines are getting an adequate return on
their investment.

Net profit
100
Capital employed

Return on capital employed (ROCE) =

2013 :
117658
100
390502+316163
2

Return on capital employed (ROCE) =

ROCE =33.30 %
2014 :

125719
100
387664 +372226
2

Return on capital employed (ROCE) =

ROCE =33.09 %

Description : In the year 2013 returns to top edged to capital employed stood
at 33.30 percent and decreased percent in 2014 to as much as 33.09
percent . This caused the company to reduce the return on capital

II.

Gross profit ratio


-

The gross profit percentage shows the amount of gross profit


for every 100 of sales revenue.

Gross profit ratios is a ratio of gross profit to net sales


expressed as percentage. It expenses the relationship directly
between gross and sales and directly between cost of goods
sold and sales.

Gross profit
100
Sales

2013 :
368588
100
789520

= 46.69 %

2014 :
400034
100
866258

=46.18 %

Description : In 2013 the percentage of the gross profit of the company stood
at 46.69 percent and decreased in 2014 to 46.18 percent .

III.

Net profit percentage

The net profit percentage shows the amount of net profit for
every 100 of sales revenue.

Net profit
100
Sales

2013 :
117658
100
789520

=14.90 %

2014 :
125719
100
866258

= 14.51 %

Description : Percentage of net profit in 2013 was as much as 14.90 percent


and decreased in 2014 as a 14.51 percent

2) Liquidity ratios

I.

Current ratio

The current ratio compares assets which will become liquid


within approximately 12 months with liabilities which will be
due for payment in the same period and indicates whether
there are sufficient short term assets to meet the short term

liabilities.
Current ratios measures general liquidity and is widely used to
make the analysis for a short term financial position or
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liquidity of a firm. Current ratios is basically a relationship


between current assets and current liabilities.

Current ratio =

Current assets
Current liabilities

2013 :
Current ratio =

412439
116618

= 3.5

449451
158825

= 2.8

2014 :
Current ratio =

Description : The current ratio in 2013 was 3.5 and its current ratio declined
in 2014 to 2.8.

II.

Acid test ratio

Shows whether the business has sufficient liquid resources to


meet its current liabilities.

Acid test ratio =

Current assetsinventory
6
Current liabilities

2013 :
Acid test ratio =

(412439143838)
116618

= 2.3

(449415222066)
158825

= 1.4

2014 :
Acid test ratio =

Description: The acid test ratio for these companies in 2013 amounted to 2.3
and the ratio dropped to 1.4 in 2014.

3) Efficiency ratios
I.

Inventory turnover ratios


-

Measures how efficient a business is at maintaining an


appropriate level of inventory.

Cost of sales
Average inventory

2013 :
420932
( 192285+143838 )
2

= 2.5

2014 :
466224
( 143838+222066 )
2

= 2.5

Description: The inventory turn over for these companies in 2013 and 2014
are same 2.5.

II.

Account receivable / sales ratio

Measures the length of time a debtor takes to pay their debt.

When calculated in terms of days known as average collection


period or debtors collection period ratio. The average
collection period ratio represent the average number of days
for which a firm has to wait before its debtor are converted
into cash

2013 :
49609 /789520 =
1
= 15.9 365
= 21 days

2014 :
55157 /866258 =
1
= 15.71 365
= 23 days

III.

Accounts payable / purchases

Measures the length of time we take to pay our creditors.

2013 :
88973/789520 =
1
= 8.873 365
= 41 days.

2014 :
113861/866258 =
1
= 7.608 365
= 47 days.

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4) Shareholder ratios

I.

Earning per share ratio


-

Gives the shareholder a chance to compare one years


earnings with another in terms that are easily understood.

Earnings per share is a small variation of return on equity


capital and it is calculated by net profit after tax and
preferences dividend dived the total number of equity shares.

Earnings per share =

Net profit after interest taxpreference dividends


Number of ordinary shares issued

2013 :
Earnings per share =

85393
657910

x 100

= 12.98
2014 :
Earnings per share =

90913
657910

x 100

= 0.138

Description: The earning per share ratio for these companies in 2013
amounted to 12.98 and the ratio dropped to 0.138 in 2014.
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II.

Dividend cover ratio


-

Gives the shareholder some idea as to the proportion that the


ordinary dividends bear to the amount available for
distribution to ordinary shareholders.

Dividend cover =

Net profit after tax preference dividends


Ordinary dividends paid proposed

2013 :
Dividend cover =

85393
65791

= 1.298

90913
65791

= 1.381

2014 :
Dividend cover =

Description: The dividend cover ratio for these companies in 2013 amounted
to 1.298 and the ratio increase to 1.381 in 2014.

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CONCLUSION

In conclusion, the assignment is based on some financial ratios and their


analyses based on a Padini Holdings. This study is on the two years data
(2013 - 2014 ) of the company Padini Holdings, which are collected from their
annual report comparison. So, this assignment is majority dependent on the
company specific data set gathered from the company annual report. This
study covers some major ratios of financial management.
.

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