assignment corporate finance

2. SPRITZER BHD
LARGEST WATER
BOTTLE
PRODUCERS
NATURAL MINERAL
WATER, DISTILLED CERTIFIED BY
WATER, CARBONATED& QUASI,LLC,USA & ISO
NON CARBONATED FRUIT 9001: 2008 BY SIRIM
FLAVOURED DRINK
MALAYSIA’S BEST
SELLING NATURAL
WATER

3. GUINNESS ANCHOR BHD
QUALITY
BRANDED
LEADER OF BEER
& STOUT
TIGER, GUINNESS, CERTIFIED BY MINISTRY
HEINEKEN, ANCHOR OF HEALTH & ISO 9001:
SMOOTH, MALTA, 2001
STRONGBOW & SOL
MALAYSIA’S BEST
SELLING BEER &
STOUT

4. FRASER & NEAVE BHD
LARGEST
ISOTONIC DRINK
PRODUCERS
F&N FUN FLAVORS,
100 PLUS, SEASONS, CERTIFIED HALAL
SUNKIST, MAGNOLIA , PRODUCT & TRUSTED
FARMHOUSE & FRUIT BRAND FOR
TEE GENERATION
MALAYSIA’S BEST
ISOTONIC DRINK
(100 PLUS)

5. YEO HIAP SENG BHD
ONE OF LARGEST
FOOD &
BEVERAGE
PRODUCERS
BOTTLED SOYA BEAN CERTIFIED HALAL
MILK, CHRYSANTHEMUM PRODUCT &
TEA, CANNED CURRY PARTNERSHIP
CHICKEN, INSTANT AGGREEMENT
NOODLES & YOGURT
1ST GLOBAL BRAND
IN SOYBEAN
PACKAGES

7.  Weighted Average Cost of Capital tell us the return of both
stakeholders which are equity owners and lender can expect. WACC
represents the investor's opportunity cost of taking on the risk of putting
money into a company. Thus, the formulation of WACC is formed by
three components as following:
WACC = S/V(Rs) + B/V (Rb) * (1-Tc) + P/V (Rp)
 The cost of equity capital is derived from Capital Asset Pricing
Model (CAPM). Thus, the formulation of CAPM is formed as
following:
Ri = Rf + βi [ Rm – Rf ]

8. 5-YEARS WACC COMPARISONS
80.00%
60.00%
40.00%
WACC %
20.00%
0.00%
-20.00%
-40.00%
-60.00%
2005 2006 2007 2008 2009
SPRITZ 1.22% 22.29% 13.37% -38.30% -38.30%
GAB -0.47% 10.15% 25.01% -23.46% 1.87%
F&N 2.17% 20.22% 8.99% -22.00% 11.66%
YEOS 1.72% 12.46% 24.84% -37.10% 56.74%

9. 5-YEARS CAPM COMPARISONS
80.00%
60.00%
40.00%
20.00%
CAPM
0.00%
-20.00%
-40.00%
-60.00%
2005 2006 2007 2008 2009
SPRITZ -1.28% 22.56% 14.23% -41.78% 30.33%
GAB -0.47% 10.15% 25.02% -23.46% 1.88%
F&N 2.14% 20.42% 9.47% -28.89% 14.05%
YEOS 1.67% 12.53% 25.36% -38.25% 58.14%

11. Capital structure shows a company how much the company is
financed by equity and debt. Besides, it also illustrates the
long-term financing of the company. Therefore, debt to equity
ratio indicates the extent to which the business relies on debt
financing. Thus, the formulation is as follows:
Debt to Equity Ratio = Long Term Debt
Total Shareholder’s Equity
Company financed with debt can save cost of taxation during its
operation that’s called leveraged; otherwise it will be an
unleveraged company.

12. 5-YEARS DEBT TO EQUITY RATIO COMPARISONS
SPRITZ GAB
2% 5%
2005
40% 27% 2006
2005-
2007 2009
2008
26%
2009

13. 5-YEARS DEBT TO EQUITY RATIO COMPARISONS
F&N YEOS
5% 2%
10% 2005 18% 2005
24%
40% 2006 2006
18%
2007 2007
21%
43% 2008 2008
19%
2009 2009

14. LEVERAGED / UNLEVERAGED COMPARISONS
LEVERAGED /
COMPANIES REASONS
UNLEVERAGED
HIGHLY COST OF DEBT IS VERY
SPRITZ
LEVERAGED HIGH
GAB UNLEVERAGED 100% EQUITY FINANCING
COST OF DEBT IS HIGH
F&N LEVERAGED
FROM 2008 ONWARDS
HIGHLY COST OF DEBT IS VERY
YEOS
LEVERAGED HIGH

16. Dividends are payments made by the company to its shareholders.
It is the portion of corporate profits paid out to stockholders. When
a corporation earns a profit or surplus, that money can be put to
two uses: it can either be re-invested in the business (called
retained earnings), or it can be paid to the shareholders as a
dividend. Many corporations retain a portion of their earnings and
pay the remainder as a dividend. Thus, the formulation is as
follows:
Dividend Payout Ratio = Dividend Per Share (DPS)
Earning Per Share (EPS)

17. 5-YEARS DPS AND EPS COMPARISONS
18 50 47
16.6
16
16 45 42.44 41.66 41
14 40 37.2636.4
35.74
35 32.8
12 30.1 30.2
30
10
7.8 25
8
6.7 20
6 5.7
15
4
4 3 3 3 10
2.5
2 5
0 0
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
DPS EPS DPS EPS

18. 5-YEARS DPS AND EPS COMPARISONS
70 18
63 16.6
16
16
60
14
50 46.8
42.9 12
40.1 40.1 41.8
40 37 10
32.7 34.2
30 7.8
30 8
6.7
6 5.7
20 4
4 3 3 3
2.5
10
2
0 0
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
DPS EPS DPS EPS

19. 5-YEARS DIVIDEND PAYOUT RATIO COMPARISONS
100.00%
90.00%
80.00%
70.00%
60.00% SPRITZ
50.00% GAB
40.00% F&N
30.00% YEOS
20.00%
10.00%
0.00%
2005 2006 2007 2008 2009

21. Working capital actually shows the company's current position. It tells us
what would be left if a company raised all of its short term resources, and
used them to pay off its short term liabilities. Thus, the formulation is as
following:
Net Working Capital = Current Asset – Current Liabilities
The operating cycle is the number of days from cash to inventory to
accounts receivable to cash. It reveals how long cash is tied up in
receivables and inventory. Thus, the formulation is as following:
Operating Cycle = Inventory Period + Receivable Period
The cash cycle is the length of time between the purchase of raw
materials and the collection of accounts receivable generated in the
sale of the final product. It is also called cash conversion cycle.
Thus, the formulation is as following:
Cash Cycle = Operating Cycle – Payable Period

22. 5-YEARS NET WORKING CAPITAL COMPARISONS
700,000
600,000
500,000
400,000
Millions
300,000
200,000
100,000
0
2005 2006 2007 2008 2009
SPRITZ 31,300 36,361 30,793 35,597 38,067
GAB 130,104 164,820 188,742 209,806 237,201
F&N 383,354 406,792 443,088 621,172 465,958
YEOS 157,012 174,068 121,777 123,414 141,237

23. 5-YEARS OPERATING CYCLE COMPARISONS
350
300
250
200
DAYS
150
100
50
0
2005 2006 2007 2008 2009
SPRTZ 293.02 297.93 288.74 228.07 201.25
GAB 58.97 61.07 63.22 69.38 75.05
F&N 149.73 155.66 165 127.83 119.8
YEOS 161.63 184.41 168.38 159.24 156.39

24. 5-YEARS CASH CYCLE COMPARISONS
300
250
200
DAYS
150
100
50
0
2005 2006 2007 2008 2009
SPRTZ 270.09 265.96 258.71 206.8 183.77
GAB 14.29 26.43 30.09 31.2 34.55
F&N 53.94 61.6 55.15 26.52 27.81
YEOS 54.74 63.5 10.72 41.16 42.13

25. PART 1 SUMMARY : AVERAGE WACC
COMPANIES 5 YEARS AVERAGE WACC
SPRITZ 4.59%
GAB 2.62%
F&N 4.21%
YEOS 11.73%
Therefore, based on the average WACC comparisons, we would highly
recommend investors to invest in GAB since the company has the lowest
WACC.

26. PART 2 SUMMARY : DEBT TO EQUITY RATIO
Therefore, based on the comparisons, we would highly recommend
investors to invest in GAB since the company is debt free.
PART 3 SUMMARY : TOTAL DIVIDEND DISTRIBUTION
AVERAGE SPRITZ GAB F&N YEOS
TOTAL 7,594,040 484,625,000 596,027,000 73,627,000
DIVIDEND
(RM)
Therefore, we can conclude that based on the dividend distribution, F&N
would be the best company to invest as it has the highest dividend
distribution and also the highest dividend per share compared to other 3
companies.

27. PART 4 SUMMARY : AVERAGE NET WC & AVERAGE OC, PP & CC
AV SPRTZ GAB F&N YEOS
CA 60,593 338,378 1,242,075 262,907
CL 26,169 152,244 662,381 119,405
NET WC 34,424 186,135 579,695 143,502
Based on the analysis, we can conclude that the best company to invest
would be F&N due to its large capital base.
COMPANIES OPERATING CYCLE PAYABLE PERIOD CASH CYCLE
SPRITZ 261.80 24.74 237.07
GAB 65.54 38.23 27.31
F&N 143.60 98.59 45.01
YEOS 166.01 123.56 42.45
Therefore, GAB is highly recommended to investors as the company has the
lowest operating cycle.

28. CONCLUSIONS
NET
DIVIDEND OPERATING
COMPANIES WACC WORKING RANK
POLICY CYCLE
CAPITAL
SPRTZ 3 4 4 4 3
GAB 1 2 2 1 1
F&N 2 1 1 2 1
YEOS 4 3 3 3 2