Final Updated Group 3 FSA Presentation as at 3 DISEMBER

8/10/2019 Final Updated Group 3 FSA Presentation as at 3 DISEMBER

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ACC 703: Analysis and Application

of Accounting DataPREPARED BY:MOHD FADZLEE BIN MALIK

2013438384

KHAIRUL AZRIN BIN MOD RIFAT

2013240544

PREPARED FOR:

ASSOCIATE PROF. DR. NORASHIKIN ISMAIL

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PRESENTATION OUTLINE

Companies Background

Financial Analysis

Quantitative Analysis

Qualitative Analysis

Conclusion

2
http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=bsKHYL3OU2sGBM&tbnid=OGbIztcGR9VheM:&ved=0CAUQjRw&url=http%3A%2F%2Fwww.dreamstime.com%2Fstock-photo-let-s-start-image29574630&ei=TjadUovdAcW-rgf21oHgDQ&bvm=bv.57155469,d.bmk&psig=AFQjCNGl5ipHWJT30EOlJVOB5JlFe8WZpA&ust=1386121064506829http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=bsKHYL3OU2sGBM&tbnid=OGbIztcGR9VheM:&ved=0CAUQjRw&url=http%3A%2F%2Fwww.dreamstime.com%2Fstock-photo-let-s-start-image29574630&ei=TjadUovdAcW-rgf21oHgDQ&bvm=bv.57155469,d.bmk&psig=AFQjCNGl5ipHWJT30EOlJVOB5JlFe8WZpA&ust=1386121064506829


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Industries & Companies Background

3
http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=W2HGQkposYFnyM&tbnid=aYW39Uq_HAaJyM:&ved=&url=http://www.trchadha.com/corporate-consulting&ei=IaecUrXnFMbOrQev4YHQDg&bvm=bv.57155469,d.bmk&psig=AFQjCNFA5T_2e_lYz9eM47vUz7cCCxYnbQ&ust=1386084513722975


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Beverages Industries Background

Promising return to investors

CPI Index up to 31% for(Jan-Sept2012, thus shows foods and non-

alcoholic beverages as a mainindicator of consumer goods andservices purchased by households

IMF has forecast that worldeconomy to grow by 3.5% in 2013whereby Malaysias economy isprojected to sustain a growth ofbetween 4.5% to 5% in 2013.

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Companies Background

The largest bottled water producer in Malaysia with 38% market acquisition.

Incorporated in the late 1980s in Taiping, Perak,. The Spritzer Group ofCompanies today comprises of five subsidiaries which are involved in themanufacturing and distribution of natural mineral water, sparkling naturalmineral water, distilled drinking water, carbonated fruit flavoured drink, non-carbonated fruit flavoured drink, functional drink, toothbrushes, performs andpackaging bottles

Founded on 23 July 1999 in Johor Bahru, Johor . Power Root Berhad wasincorporated in 2006. Develop and promote herbal energy drinks in Malaysiafortified with two main rainforest herbs known as eurycoma longifolia jack orcommonly known as "Tongkat Ali" and labisia pumilia and pathoina or "KacipFatimah". These herbs are indigenous to Malaysia and its properties forpromoting physical well-being are highly regarded by Malaysians.

Provides ready-to-drink (RTD) coffee, RTD tea, RTD chocolate malt drinks, RTDcereal, and energy drinks. Various products such as Alicafe, Pearl Cafe,Oligo, Alitea, and Power Root brand names. Power Root has established astrong and aggressive marketing network in Malaysia. These high qualityproducts combined with aggressive promotional and marketing campaign

have made Power Root as a leading brand in the Malaysia Market.5


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FINANCIAL STATEMENT ANALYSIS

6
http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=W2HGQkposYFnyM&tbnid=aYW39Uq_HAaJyM:&ved=&url=http://www.trchadha.com/corporate-consulting&ei=IaecUrXnFMbOrQev4YHQDg&bvm=bv.57155469,d.bmk&psig=AFQjCNFA5T_2e_lYz9eM47vUz7cCCxYnbQ&ust=1386084513722975


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METHODOLOGIES

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Understanding in term of how financial

statement analysis is used to analyzethe viability of a project or a

company in specific industries

OBJECTIVES

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Quantitative Analysis Vertical analysis

Horizontal analysis

Ratio analysis

Qualitative Analysis

SWOT analysis

Other Tools

Altman Z-score analysis

Market/Analyst expectation

Cash Flow analysis

METHODOLOGIES

9
http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=kKM2kGizDkTBxM&tbnid=xAN_U2kP7zE8bM:&ved=0CAUQjRw&url=http%3A%2F%2Fwww.ecitiusinfotech.com%2Fcompany%2Fmethodology%2F&ei=OEGdUtO9F4v7rAeih4HIDw&bvm=bv.57155469,d.bmk&psig=AFQjCNEsbjpeG6MwCTsWOQTJlN_Sjv0G4w&ust=1386123889519589http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=kKM2kGizDkTBxM&tbnid=xAN_U2kP7zE8bM:&ved=0CAUQjRw&url=http%3A%2F%2Fwww.ecitiusinfotech.com%2Fcompany%2Fmethodology%2F&ei=OEGdUtO9F4v7rAeih4HIDw&bvm=bv.57155469,d.bmk&psig=AFQjCNEsbjpeG6MwCTsWOQTJlN_Sjv0G4w&ust=1386123889519589http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=kKM2kGizDkTBxM&tbnid=xAN_U2kP7zE8bM:&ved=0CAUQjRw&url=http%3A%2F%2Fwww.ecitiusinfotech.com%2Fcompany%2Fmethodology%2F&ei=OEGdUtO9F4v7rAeih4HIDw&bvm=bv.57155469,d.bmk&psig=AFQjCNEsbjpeG6MwCTsWOQTJlN_Sjv0G4w&ust=1386123889519589http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=kKM2kGizDkTBxM&tbnid=xAN_U2kP7zE8bM:&ved=0CAUQjRw&url=http%3A%2F%2Fwww.ecitiusinfotech.com%2Fcompany%2Fmethodology%2F&ei=OEGdUtO9F4v7rAeih4HIDw&bvm=bv.57155469,d.bmk&psig=AFQjCNEsbjpeG6MwCTsWOQTJlN_Sjv0G4w&ust=1386123889519589http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=kKM2kGizDkTBxM&tbnid=xAN_U2kP7zE8bM:&ved=0CAUQjRw&url=http%3A%2F%2Fwww.ecitiusinfotech.com%2Fcompany%2Fmethodology%2F&ei=OEGdUtO9F4v7rAeih4HIDw&bvm=bv.57155469,d.bmk&psig=AFQjCNEsbjpeG6MwCTsWOQTJlN_Sjv0G4w&ust=1386123889519589http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=kKM2kGizDkTBxM&tbnid=xAN_U2kP7zE8bM:&ved=0CAUQjRw&url=http%3A%2F%2Fwww.ecitiusinfotech.com%2Fcompany%2Fmethodology%2F&ei=OEGdUtO9F4v7rAeih4HIDw&bvm=bv.57155469,d.bmk&psig=AFQjCNEsbjpeG6MwCTsWOQTJlN_Sjv0G4w&ust=1386123889519589


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QUANTITATIVE ANALYSIS

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INCOME HORIZONTAL AND VERTICAL

ANALYSIS

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VERTICAL ANALYSIS

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2008 2009 2010 2011 2012

SPRITZER RM98,746,000 RM108,253,000 RM131,636,000 RM147,682,000 RM178,208,000

POWER ROOT RM178,478,659 RM138,146,241 RM153,107,212 RM184,823,929 RM217,036,013

RM0

RM50,000,000

RM100,000,000

RM150,000,000

RM200,000,000

RM250,000,000

RM

REVENUE

FINANCIAL PERFORMANCE

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Vertical Analysis Highlight

- Income Statement

Both companies have shown improvement withrevenues generated above RM100m from 2009 until2012.

Power Root recorded highest revenue for the periodinvolved with the average differences amounting RM32million for year 2011 and 2012.

This result shows that even though Spritzer well known asthe brand leader in the beverages industries inMalaysian market, Power Root has more efficiency in

term of revenue generating from the operation.15


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2008 2009 2010 2011 2012

RM106,452,000RM115,931,000

RM157,890,000

RM186,721,000RM188,403,000

RM65,882,888RM80,236,644 RM87,318,666 RM88,029,199 RM83,444,404

TOTAL NON CURRENT

ASSETS

SPRITZER POWER ROOT


- Balance Sheet

2008 2009 2010 2011 2012

RM63,043,000 RM64,477,000

RM81,484,000 RM78,209,000RM83,679,000

RM176,258,791

RM145,388,737RM138,039,624

RM132,440,583

RM149,941,472

CURRENT ASSETS

SPRITZER POWER ROOT

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- Balance Sheet

Spritzer focus on improving the non-current assets while Power Rootemphasizing on the current asset.

Spritzers highest allocation was on the Property, Plant and Equipment(PPE) with average of 60% over the five years from the total assets.

Power Root has huge different on the cash and cash equivalent.

This scenario might give impression that Spritzer vision to keep investing onthe fixed assets while Power Root on maintaining its cash and cashequivalent to finance its operation for the future.

This shows that Power Root has less investing on activities that cangenerated revenues for the organisation while Spritzer quite aggressive interm of improving the asset to generate its revenues.

Note: To analyze the efficient of both of this approach, we have to do other analysis such as assetturnover or others to support our findings

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INCOME HORIZONTAL ANALYSIS

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2008 2009 2010 2011 2012

SPRITZER RM98,746,000 RM108,253,000 RM131,636,000 RM147,682,000 RM178,208,000

POWER ROOT RM178,478,659 RM138,146,241 RM153,107,212 RM184,823,929 RM217,036,013

RM0

RM50,000,000

RM100,000,000

RM150,000,000

RM200,000,000

RM250,000,000

RM

REVENUE

FINANCIAL PERFORMANCE

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Horizontal Analysis Highlight

- Income Statement Revenues for both of the companies were in fluctuate position whereby Power Root

recorded the most decline trend by -23% while Spritzer show minimal increase ofrevenues by 10% in year 2009.

This is due to the fact that sales for Spritzer in 2008 has tremendously increase andwe assume this significant growth resulted because of general election which beingheld in 2008 together with the introduction of new product of 5 gallon bottled

water. That is why Spritzersperformance for the next financial year is quite minimalby just increasing of 10% for the year 2009.

Power Root has successfull recorded higher revenue in year 2008 because oflaunching new products line such as Perlchoco, oligo coco and oligo cereal.

Power Root also manage to penetrate to a new in the middle east market.However the Power Roots performance for the year of 2009 has droppedsignificantly by -23%. This is due to the escalating of operation cost as well asconsumer spending weakened because of global financial crisis.

Nevertheless, both companies have recovered their sales with two digits ofpercentage in the next financial year.

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Horizontal Analysis Highlight

- Balance Sheet

Same unusual trend for PPE of Spritzer and Power Rootover the years.

Spritzer has recorded percentage increase of 43% for

year 2010 meanwhile drop percentage Power Root of -12% for year 2012.

For these scenarios, we have assumed that Spritzer hasacquired additional hire purchase arrangement for

PPE, factory expansion and motor vehicles togetherwith re-evaluation of groupsland and properties.

For Power Root, we have identified the group hasdisposed/write off the assets and reclassification of PPE

to investment properties.22


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2008 2009 2010 2011 2012

RM98,040,000RM107,562,000

RM154,256,000

RM183,087,000 RM184,180,000

RM60,864,508

RM74,128,166RM81,933,395 RM82,154,133

RM72,125,933

PROPERTY PLANT & EQUIPMENT

SPRITZER POWER ROOT

FINANCIAL POSITION

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2008 2009 2010 2011 2012

RM10,058,000

RM16,555,000

RM41,187,000

RM46,500,000

RM36,229,000

RM15,159,285

RM3,068,151 RM2,519,964 RM2,028,895 RM1,633,904

LONG TERM BORROWING

SPRITZER POWER ROOT

FINANCIAL POSITION

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2008 2009 2010 2011 2012

RM13,991,000 RM14,222,000

RM31,089,000

RM41,038,000

RM47,913,000

RM1,441,386

RM4,123,890RM2,424,839

RM4,291,260

RM7,091,681

CURRENT BORROWINGS

SPRITZER POWER ROOT

FINANCIAL POSITION

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LIQUIDITY RATIO (LR)

2008 2009 2010 2011 2012

Current Ratio 2.30 2.44 1.62 1.21 1.17

Quick Ratio 1.71 2.01 1.28 0.91 0.88

0.00

0.50

1.00

1.50

2.00

2.50

3.00

RA

TIO

LR FOR SPRITZER

2008 2009 2010 2011 2012

Current Ratio 6.69 5.03 4.57 3.73 3.42

Quick Ratio 5.12 3.74 3.73 3.04 2.66

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

RATIO

LR FOR POWER ROOT

LIQUIDITY

RATIO

SPRITZER BHD POWER ROOT BHD

2008

2009

2010

2011

2012

Average

Ratio2008

2009

2010

2011

2012

Average

Ratio

Current Ratio

2.30

2.44

1.62

1.21

1.17

1.75

6.69 5.03 4.57 3.73 3.42 4.69

Quick Ratio 1.71

2.01

1.28

0.91

0.88

1.36

5.12 3.74 3.73 3.04 2.66 3.6627


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Financial Ratio Analysis

- Liquidity Ratio Highlight

Liquidity ratio widely used for identifying a companysability to satisfy itscurrent liabilities with its current assets. Itsreflected the company ability toconvert its short term asset into cash to meet or cover the short termfinancial obligations when it is necessary. The higher the liquidity ratioindicates the larger margin of safety the company posses to cover its shortterm obligation.

Liquidity ratios mainly consists of Current ratio (Current assets / Currentliabilities) and Quick ratio (Current assets Inventory) / Current Liabilities).

From Table, both the Current Ratio and Quick Ratio shows a decreasingtrend from 2008 to 2012. However, both companies have ability tomanage its liquidity in short term except for Spritzer Bhd for 2011 and 2012

after excluding their inventories. These are mainly due to increase ofborrowing and hire purchase payables to finance its operation.

As such Spritzer should take necessary action to improve its currentliabilities for the next financial year whereby Power Root still has itscapability to manage current obligation reasonably.

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PROFITABILITY RATIO (PR)

2008 2009 2010 2011 2012

Gross Profit Margin 51.22% 48.29% 44.87% 47.60% 47.99%

Net Profit Margin 7.93% 7.50% 9.53% 5.48% 5.94%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

RATIO

PR FOR SPRITZER

2008 2009 2010 2011 2012

Gross Profit Margin 41.74% 40.81% 43.07% 41.49% 47.72%


0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

R

ATIO

PR FOR POWER ROOT

PROFITABILITY RATIO

SPRITZER BHD

POWER ROOT BHD

2008 2009 2010 2011 2012Average

Ratio2008 2009 2010 2011 2012

Average

Ratio

Gross Profit Margin 51.22% 48.29% 44.87% 47.60% 47.99% 48.00% 41.74% 40.81% 43.07% 41.49% 47.72% 42.96%


7.28% 22.00% 7.06% 6.65% 6.61% 7.47%

9.96%

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- Profitability Ratio Highlight

The profitability ratio measure the income or operatingcapabilities of a business. The ability of the firm to survive toa large extent is dependent on the amount of profit thatcould be obtained from the normal operation of thebusiness. Profits provide the means to give a return to theinvestors to ensure the providers of finance their return aswell.

Both companies have managed to earn gross profit ataverage of 40% rate. Spritzer has shown a betterperformance compare to Power Root in term of gross profit

margin earn on each year. However Power Root pictured astrong efficient of managing its total expenses by averagenet profit margin of 10% compared to Spritzer who onlymanage to earn an average of 7.3%. As such, Spritzer shouldcontrol and manage their overhead and other expenses togenerate better performance for the next financial year.

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- Profitability Ratio Highlight

ROA is used to measure the firms net income divided bytotal assets while ROE is used to measure the return thatshareholders earn on their equity invested in the firm.

Both of the companies have mixed fluctuation of ROI andROE whereby Power Root has a better position compared toSpritzer. By ROI average percentage of 8% and ROEaverage percentage of 13%, Power Root has advantage interm of the usage of the assets to generate revenue andshareholders benefit from the investment made comparedto Spritzer who recorded only 4% on ROA and 8% on ROE.

As such these ROA and ROE will give an impression to thepotential investors the viability of the project for thecompany they are willing to invest.

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2008 2009 2010 2011 2012

Total Debt To Asset

Ratio28% 29% 43% 46% 45%

Long Term Debt To

Asset Ratio12% 15% 22% 22% 19%

Total Debt to Equity

Ratio28% 29% 43% 46% 45%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%50%

RATIO

FLR FOR

SPRITZER

FINANCIAL LEVERAGE RATIO (FLR)

2008 2009 2010 2011 2012

Total Debt To Asset

Ratio11% 13% 13% 16% 19%

Long Term Debt To

Asset Ratio7% 1% 1% 1% 1%


Ratio44% 48% 50% 59% 73%

0%

10%

20%

30%

40%

50%

60%

70%

80%

RATIO

FLR FOR

POWER

ROOT

FINANCIAL

LEVERAGE

RATIO

SPRITZER BHD

POWER ROOT BHD

2008 2009 2010 2011 2012Average

Ratio

2008 2009 2010 2011 2012Average

Ratio

Total Debt To Asset

Ratio28.5% 29.4% 42.7% 46.4% 44.8% 38.4% 10.9% 12.8% 13.4% 16.1% 18.8% 14.4%

Long Term Debt To

Asset Ratio12.3% 14.8% 21.6% 22.0% 18.5% 17.8% 7.0% 1.4% 1.4% 1.4% 1.5% 2.5%


Ratio

28.5% 29.4% 42.7% 46.4% 44.8% 38.4% 43.9% 48.1% 50.4% 59.3% 73.1% 55.0%32


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- Financial Leverage Ratio Highlight

The financial leverage ratio is used to assess the extent to which borrowedmoney or debt is used to finance assets. These ratios are also a good wayto assess the ability of the firm to meet its debt payment obligations.Ideally, any organization should have the ratio at the lower level as theycould so that they will have opportunity to get additional loan togenerate additional income for the organization. However having too lowof ratio of total debt to total asset also could be costly to a corporation

since interest expenses are deductable for income tax purposes.

Both companies have opposite result of the ratio. Power Root has a betterposition since the average ratio percentage for total debt to asset at 14%and long term debt to asset at 2% which are way below than 15%compared to Spritzer who has the average percentage at 38% and 18%respectively. Overall, although Power Root was in the better position butitsnot utilized its debt at optimum level whereby Spritzer has utilized thelevel of debt at manageable rate.

However in term of total debt to equity, Spritzer show a better position ataverage percentage of 38% whereby Power Root has just manage to putits position at average of 55%. This show that Spritzer has it own

advantage maybe just because of the biggest portion on its equity.33


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2008 2009 2010 2011 2012Account

Receivables

Turnover

5.34 2.93 3.15 3.23 3.72

Total Assets

Turnover1.17 0.62 0.63 0.59 0.66

Non Current Asset

Turnover0.97 0.96 0.86 0.95

PPE Turnover 2.01 1.05 1.01 0.88 0.97

0.00

1.00

2.00

3.00

4.00

5.00

6.00

RATIO

AMR FORSPRITZER

ASSET MANAGEMENT RATIO (AMR)

2008 2009 2010 2011 2012Account Receivables

Turnover5.56 2.29 2.80 2.92 2.80

Total Assets Turnover 1.47 0.59 0.68 0.83 0.96

Non Current Asset

Turnover1.89 1.83 2.11 2.53

PPE Turnover 5.86 2.05 1.96 2.25 2.81

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

RATIO

AMR FOR

POWER

ROOT

ASSET MANAGEMENT RATIO

SPRITZER BHD POWER ROOT BHD

2008 2009 2010 2011 2012Average

Ratio2008 2009 2010 2011 2012

Average

Ratio

Account Receivables Turnover

5.34

2.93

3.15

3.23

3.72

3.67

5.56 2.29 2.80 2.92 2.80 3.27

Total Assets Turnover 1.17 0.62 0.63 0.59 0.66 0.73 1.47 0.59 0.68 0.83 0.96 0.91

Non Current Asset Turnover 0.97 0.96 0.86 0.95 0.94 1.89 1.83 2.11 2.53 2.09

PPE Turnover 2.01 1.05 1.01 0.88 0.97 1.18 5.86 2.05 1.96 2.25 2.81 2.99

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- Asset Management Ratio Highlight

Asset management ratios indicate the extent to which assets areused to support sales. These are sometimes referred to as activityor utilisation ratios, and each ratio in this category relates financialperformance on the income statements with items on the balancesheet. For these ratios, we have identified four types of ratios to beused that are account receivables turnover, total assets turnover,

non-current asset turnover and PPE turnover. The higher the ratios,the better they are. In simple words, the more efficiently assets areused, the higher a firmsprofit.

Spritzer shown a better account receivables turnover at averageof above 3 whereby Power Root just manage to reach at average

of 2.7. However looking from other perspective, Power Root hasshown a better performance in utilising non-current asset turnoverat average of 2.09 and PPE turnover at average of 2.27. This isdifferent with Spritzer who just manages to reach at average ofless than 1 for both. As a result, Power Root has a betterperformance on utilising its total assets turnover at average of 0.77compared to Spritzer who has an average of 0.63.

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2008 2009 2010 2011 2012

Earnings Per Share 0.06 0.06 0.10 0.06 0.08

P/E RATIO 8.14 9.65 9.69 14.68 10.24

Earnings yields 0.12 0.10 0.10 0.07 0.10

Dividend yields 0.08 0.05 0.04 0.04 0.04

0.002.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

RATIO

MVR

FOR

SPRITZER

2008 2009 2010 2011 2012

Earnings Per Share 0.13 0.03 0.03 0.04 0.05

P/E RATIO 3.92 3.78 5.37 8.95 6.42

Earnings yields 0.26 0.26 0.19 0.11 0.16

Dividend yields 0.13 0.09 0.04 0.04 0.05

0.00

2.00

4.00

6.00

8.00

10.00

RATIO

MVR

FOR

POWER

ROOT

MARKET VALUE RATIO (MVR)

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- Market Value Ratio Highlight

Market value indicates the willingness of investors to value a firm inmarketplace relative to financial statement values. A firmsprofitability, risk, quality of management and many other factorsare reflected in its stock and security prices by the efficientfinancial markets. Financial statements are historical in nature, butthe financial market look to the future. Hence, market value ratios

indicate the market assessment of the value of the firm securities.

Spritzer has a better return for the earnings per share at average of0.07 sen compared to Power Root at average of 0.06 sen.However, Power Root has a better position of giving higherearnings yields at 0.20 sen and dividend yields at 0.07 sen

compared to Spritzer who has 0.10 sen and 0.05 sen respectively.

As a result, Power Root indicates a good reasonable priceearnings ratio with 5 times compared to Spritzer at assumption ofunrealistic 10 times of its current market value which supported bybuy back shares from market by Spritzer management.

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ALTMAN Z SCORE


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ALTMAN Z-SCORE

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ALTMAN Z-SCORE

2012 2011 2010 2009 2008

Total = Z Score 4.47 4.94 5.03 3.52 3.91

0.00

1.00

2.00

3.00

4.00

5.00

6.00

Z

SCORE

POWER ROOT Z Score

2012 2011 2010 2009 2008

Total = Z Score 1.75 1.63 1.88 2.18 2.04

0.00

0.50

1.00

1.50

2.00

2.50

Z

SCORE

SPRITZER Z Score

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Altman Z-Score Highlight

Spritzer has recorded below 1.8 score which shows

uncertainty for determining financial situation of thecompany for the year 2008 until 2010.

The score has fallen to worsen condition in the nextfinancial year with the score of 1.63 in year 2011 and

1.75 in year 2012.

This indicates that Spritzer has facing financial distress forthat particular year and it needed strategic direction tomove up to the sound positive financial health.

At the same time, Power Root had shown steadily soundfinancial health in its financial position for over the years.Overall, the Z-Score has shows that Power Root was in abetter financial position compared to Spritzer.

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CASH FLOW ANALYSIS

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QUALITATIVE ANALYSIS

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SWOT ANALYSISSTRENGTH WEAKNESSES

Spritzer Power Root Spritzer Power Root

Established in 1980 Necessity products

Healthy drinks for hydrating

body liquid

Leaders in the industry

Introduction on new

products

Huge investment in PPE

Environmentally products

Quality products received

prestigious awards and

accolades such as Brand

Laureatte Award 2011/2012

Good collection of debt

Good return for earning per

share

Established in 1999

One of the leaders in energy

drinks in the industry

Must have own recipe to

penetrate the market

Strong R&D capability

Middle East market

Strong current ratio and

quick ratio

High profit margin (10%)

Efficient in utilising assets

Higher return on equity

Higher earnings and

dividend yields

Limited financial resources Pollution

Low current ratio and quick

ratio

Low profit margin (7.3%)

Supplement products Diabetic and health

problems causal because of

sugar consumption usage

OPPORTUNITY THREATS

Spritzer Power Root Spritzer Power Root

Diversification

Export market

Huge local consumption due

to weather condition

Festive season and school

holidays Market value assessment

Diversification

Export market

Low financial leverage ratio

for obtaining additional

loans in the future

Emerging competitors such

as Dasani (coca cola group),

Blew, Evian, Perrier etc

Easy to enter the market

Additional of water drinking

such as reverse osmosisproducer

Strong competitors such as

Livita, Red Bull, 100 plus

Higher raw material cost

such as sugar and other

substance

Niche market for selectiveconsumer

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MARKET/ANALYST EXPECTATION

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MARKET/ANALYST HIGHLIGHT

Market value for Spritzer was in increase trend from2008 until 2013 whereby the best market value was inthe year of 2013 sold at RM1.80 per share.

Power Root on the other hand had shown afluctuate position whereby the best position of themarket share positioned almost RM 2.40 per share in

the middle of 2013.

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CONCLUSION

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THANK YOU

Final Updated Group 3 FSA Presentation as at 3 DISEMBER

Documents

Transcript of Final Updated Group 3 FSA Presentation as at 3 DISEMBER