FACULTY OF BUSINESS MANAGEMENT

FUNDAMENTAL OF FINANCE (FIN 242)

REPORT TITLE:

CTTYLYA SCARF SDN. BHD.

SUBMITTED TO:

MADAM HASMI BINTI MOKHLAS

PREPARED BY:

NUR AISYAH YASMEEN BINTI MOHD HISHAM 2016723215

NUR FARIDAH BINTI SAIFUL AZHAR 2016110191

RAIHANA BINTI ABDUL BARRI 2016513985

NUR ATIQAH BINTI SULAIMAN 2016365523

DIPLOMA IN BANKING STUDIES

DATE OF SUBMISSION : 25th MAY 2018

ACKNOWLEDGEMENT
The preparation of this report is a sound example of teamwork. The experience is a valuable
one because not only did the report increase our understanding and knowledge on the
assignment topic. It also taught us important lessons of how to incorporate out theoretical
knowledge to enhance the understanding of practical implications. In addition, it also gave us
a thorough opportunity to learn from others; despite conflicting ideas, the teams managed to
join efforts and reach unanimous decisions at the end. It re-defined our skills of working with
others to reach a final goal, and improved our communication as well as tolerance levels.

However, this would not have been possible had we not been given the opportunity to present
this report. Therefore, we would like to express the deepest appreciation to our course
instructor, Madam Hasmi binti Mokhlas, who has been a continuous source of guidance
throughout the report and has always been there to answer our quarries. Thanks also to our
friends and family for keep supporting us to did this report.
TABLE OF CONTENT

No. Particulars No. Page

1. Acknowledgement
2. Table of Content
3. Introduction
4. Product / Services
5. Financial Analysis
6. Current Issue
7. Conclusion / suggestions
8. References
9. Appendix
INTRODUCTION

CTTLYA SCARF SDN. BHD.

CTTLYA SCARF SDN BHD is a Malaysian based premium brand. We are launched in June
2016. A prominent brand that has stated off and was built on a strong foundation among the
headscarf-wearing crowd. CTTLYA Scarf has always been known for its tasteful head
coverings which is fashion forward, yet maintain the image and ethos of Muslim compliance.
Thus, creating a perfect balance between style and function.

Our products are designed and built upon three elements; Exclusivity, Modesty and
Contemporary. As a brand of shawl, CTTLYA sets itself apart from other brands, armed with
a better understanding of fabrics which work for the Malaysian climate. CTTLYA focus on
various colors, textures and prints to produce unique, modern, sophisticated and elegant
products.

As the forefront of modest fashion brand, CTTLYA strives to maintain the balance between
current trends, comfort and practicality without compromising on beliefs. Each products is
tailored for perfection to fit our client’s demand. CTTLYA went through such great length in
understanding the demands and preferences of our customers thus producing a fresh, original
and modern ideas align with the latest fashion trend.

CTTLYA known as a one stop center for all your Muslimah wear needs, CTTLYA has
something to offer for any occasions. CTTLYA’s team are well-trained and ready to assist
you in finding the perfect-style that suits your personality. We are proud to say that CTTLYA
is the first to offer a complete range of modest products for your everyday looks.
 MISSION AND VISSION

Provide the best version to our customers.

Ensuring the quality of fabrics, designs, and stitching and beading and embroidery
scarf will always be secure and compelling customer.
Making CTTLYA as the sole provider of exclusive and top lid center with modern
pattern with modern patterns and designs that are always up to late.
Provide inspiration to women nowadays especially Muslim are concerned with the
sleek and stylish appearance.
PRODUCT OF CTTLYA SHAWL.

Satin Silk

CTTLYA shawl, best-selling scarves are crafted from high-quality satin silk that
drapes beautifully when worn. With just the right amount of satin sheen, these
luxurious scarves complement any outfit and bring with it a touch of glamour; perfect
for those special nights out!
 The CTTLYA limited edition square scarf

The CTTLYA limited edition quare scarf is made from a light, airy fabric with just the
perfect blend of softness, yet sturdy enough to withstand usage with scarf pins. Cut in a
traditional square shape, this heavenly soft series styles easily and is perfect for both formal
and casual wear. This limited edition square scarf from our Premium Basic collection features
single coloured scarves.

Every CTTLYA scarf purchase comes beautifully wrapped in its own hard casing with a
personalised thank you card from us, so they would be great as gifts too!
 The basic plain scarf

Made from delicate fine cotton, this semi-sheer scarf series is both feathery light and textured
which makes it our simplest non-slip throw-on scarf ever! This super versatile scarf is perfect
for everyday use in both casual and semi-formal affair. We also provide you with many
colours to offer.
 FINANCIAL RATIO WITH JUSTIFICATION OR COMMENTS

i) LIQUIDITY RATIO

RATIO 2015 2016 COMMENT

Current Current Assets ÷ Current Assets ÷ Current ratio for CTYLYA
Ratio Current Liabilities Current Liabilities Scarf in 2016 is 1.36 times
WORST than 2015, 2.67 times
RM 1,320,000 ÷ RM RM 190,000 ÷ RM that show in 2016 a company
495,000 140,000 does not have ability to pay
= 2.67 times =1.36 times short term obligation.

Quick (Current Assets – (Current Assets – Quick ratio for CTTLYA Scarf
Ratio Inventory – Inventory – in 2016 is 1.0 times BETTER
Prepaid Expenses) ÷ Prepaid Expenses) ÷ than 2015, 0.71 times that show
Current Liabilities Current Liabilities in 2016 a company does not
(RM 1,320,000 - (RM 190,000 – RM have ability to pay short term
RM 825,000) ÷ RM 15,000 – RM obligation without relying on
495,000 75,000) ÷ RM inventory and prepaid expenses.
= 1 times 140,000
= 0.71 times
Net Current Assets – Current Assets – Net working capital for Nestle
Working Current Liabilities Current Liabilities Malaysia Berhad in 2016 is
Capital RM1,320,000 – RM RM 190,000 – RM RM 50,000 WORST than
495,000 140,000 2015,RM 825,000 that show in
= RM 825,000 =RM50,000 2016 the liquidity of the
company is not in good
condition.
 ii) ACTIVITY RATIO

RATIO 2015 2016 COMMENT

Inventory Cost of Goods Sales Cost of Goods Sales ÷ Inventory turnover for
Turnover ÷ Inventory Inventory CTTLYA Scarf in 2016 is
RM 2,029,500 ÷ RM RM 100,000 ÷ RM 1.33 times WORST than
825,000 75,000 2015, 2.46 times that show in
= 2.46 times. = 1.33 times. 2016 a company
uneffectiveness of inventory
to generate sales.

Average (Account Receivable (Account Receivable Average collection period for

Collection ÷ Sales) × 360 ÷ Sales) × 360 CTTLYA Scarf in 2016 is
Period 106 days WORST than 2015,
(RM 275,000 ÷ RM (RM 50,000 ÷ RM 36 days that show in 2016 a
2,750,000) × 360 170,000) × 360 company has problem in
=36 days. = 106 days. collecting debt.

Account Sales ÷ Account Sales ÷ Account Account receivable turnover

Receivable Receivables Receivables for CTTLYA Scarf in 2016 is
Turnover 10 times WORST than 2015,
RM 2,750,000 ÷ RM RM 170,000 ÷ RM 3.4 times that show in 2016 a
275,000 50,000 company uneffectiveness in
= 10 times = 3.4 times collecting account receivables.

Fixed Sales ÷ (Fixed Sales ÷ (Fixed Assets Fixed asset turnover for
Asset Assets – – Depreciation) CTTLYA Scarf in 2016 is
Turnover Depreciation) RM 170,000÷ RM 4.54 times BETTER than
RM 2,750,000 ÷ RM 100,000 2015, 1.7 times that show in
605,000 = 1.7 times. 2016 a company has
=4.54 times effectiveness of fixed assets to
generate sales.

Total Sales ÷ Total Assets Sales ÷ Total Assets Total asset turnover for
Asset CTTLYA Scarf in 2016 is
Turnover RM 2,750,000 ÷ RM RM 170,000÷ RM 1.43 times BETTER than
1,925,000 290,000 2015, 0.59 times that show in
= 1.43 times. =0.59 times. 2016 a company has
effectiveness of total assets to
generate sales.
 iii) LEVERAGE AND SOLVENCY RATIO

RATIO 2015 2016 COMMENT

Debt Ratio (Total Debts ÷ Total (Total Debts ÷ Total Debt ratio for CTTLYA
Assets) × 100 Assets) × 100 Scarf in 2016 is 62.07%
(RM 715,000÷ RM (RM 180,000 ÷ RM WORST than 2015,
1,925,000) × 100 290,000) × 100 37.14% that show in 2016
=37.14% = 62.07% a company has higher
amount of debt in
financing assets.
Debt to (Total Debts ÷ Equity) (Total Debts ÷ Equity) Debt to equity for
Equity × 100 × 100 CTTLYA Scarf in 2016 is
(RM 715,000 ÷ RM (RM 180,000 ÷ RM 163.64% WORST than
1,210,000) × 100 110,000) × 100 2015, 59.09% that show
=59.09% = 163.64% in 2016 a company has
higher amount of debt in
capital structure.
Times Earn Before Interest Earn Before Interest Times interest earned for
Interest Tax ÷ Interest Tax ÷ Interest CTTLYA Scarf in 2016
Earned is 5.29 times WORST
RM 128,700 ÷ RM RM37,000 ÷ RM 7,000 than 2015, 9.75 times that
13,200 show in 2016 a company
= 9.75 times = 5.29 times can meet loan
requirement.
 iv) PROFITABILITY RATIO

RATIO 2015 2016 COMMENT

Gross (Gross Profit ÷ Sales) (Gross Profit ÷ Sales) Gross profit margin for
Profit × 100 × 100 CTTLYA Scarf in 2016 is
Margin 41.18% BETTER than
(RM 591,800 ÷ RM (RM 70,000 ÷ 2015, 21.52% that show in
2,750,000 ) × 100 RM170,000) × 100 2016 a company has higher
in contribution gross profit.
= 21.52% = 41.18%
Operating (Operating Profit ÷ (Operating Profit ÷ Operating profit margin for
Profit Sales) × 100 Sales) × 100 CTTLYA Scarf in 2016 is
Margin 27.58% BETTER than
(RM 76,017 ÷ RM (RM 68,950 ÷ RM 2015, 24.73% that show in
307,400) × 100 250,000 ) × 100 2016 a company has higher
of productivity
= 24.73% = 27.58%
Net Profit (Earning After Tax ÷ (Earning After Tax ÷ Net profit margin for
Margin Sales) ÷ 100 Sales) ÷ 100 CTTLYA Scarf in 2016 is
10.59% WORST than 2015,
(RM 57,750 ÷ (RM 18,000 ÷ RM 2.1% that show in 2016 a
RM2,750,000) × 100 170,000 ) × 100 company has higher return
on shareholder.
= 2.1% = 10.59%

Return on (Earning After Tax ÷ (Earning After Tax ÷ Return on asset for
Asset Total Assets) × 100 Total Assets) × 100 CTTLYA Scarf in 2016 is
6.21% BETTER than 2015,
(RM 57,750 ÷ RM (RM 18,000 ÷ RM 3.00% that show in 2016 a
1,925,000) × 100 290,000) × 100 company has higher return
on firm’s investment of
= 3.00% = 6.21% asset.

Return on (Earning After Tax ÷ (Earning After Tax ÷

Return on equity for
Equity Total Equity) × 100 Total Equity) × 100
CTTLYA Scarf in 2016 is
16.36% BETTER than
(RM 57,750 ÷ RM (RM 18,000 ÷ 2015, 4.77% that show in
1,210,000) × 100 RM110,000) × 100 2016 a company has higher
= 4.77% =16.36 return to shareholder.
CONCLUSION

From the financial analysis, we can conclude that Nestle (Malaysia) Berhad is having worst
financial capacity. We can see from all the justification in four type of financial ratio which
are liquidity ratio, activity ratio, leverage or solvency ratio and profitability ratio.

The liquidity ratio indicates the short term financial position of CTTLYA Scarf Sdn Bhd.
From the analysis, it shows that in 2016, the company is not in good condition because does
not have ability to pay short term obligation without relying on inventory and prepaid
expenses.

Furthermore, in activity ratio, 2016 is in poor in efficiency of performance compared to

2015 because of inventory to generate sales, the company has problem in collecting debt and
uneffectiveness in collecting account receivable. Nevertheless, the company in 2016 show
that the effectiveness of fixed assets and total assets are to generate sales compared to 2015.

Then, in leverage or solvency ratio, the CTTLYA Scarf Sdn. Bhd. has higher amount of
debt in financing assets and debt in capital structure in 2016 compare to 2015. Nevertheless,
it better in time interest earned because can meet loan requirement compare to 2015.

Last but not least, in profitability ratio, the company shows efficiency in generate profit in
2016 compare to 2015 because the company has higher in contribution gross profit,
productivity and higher return on shareholder.
RECOMMENDATION

In 2016, the financial analysis for the current asset, average collection period, account
receivable turnover, quick ratio, inventory turnover, debt to equity, debt ratio and net capital
working show in poor condition compare to 2015.

To overcome the current asset, the company should increase the amount of current asset
because it will be more easily to pay off current liability. For the average collection period,
the problem must be solved by sending out the reminder during the week prior to a
contractually due to payment date.

Next, the account receivable turnover can be overcome by changing the credit term a
business offer. The time frame a customer is given to pay to improve the ratio. For debt to
equity, the company should increase the equity and for debt ratio, the company must
increase the total assets to solve the problem.

Then, to solve worst in quick ratio, the company must pay off the current bill and at the
same time, increase sale. So that, cash on hand and account receivable increase. For the
inventory turnover, the company should increase in sales, the company need to formulated
better marketing strategy to create more demand in the industry, and thus, give a push to it
sales.

Last but not least, the net working capital, must be excess to the large amount of financing
to meet short term of obligation as a line of credit to overcome the problem. The business
might be required to sale the non- current asset to pay for the current obligation like account
payables.
REFERENCES

i) http://www.bursamalaysia.com/market/listed-companies/company-announcements

ii) FUNDAMENTAL OF FINANCE FIN242/ FIN262/ FIN 260 for UiTM students.