A.

Introduction Overview of All the Companies Chosen

1.1 The Store Supermarket & Departmental Store
According to the research that we had conducted, we analyzed that The
Store Supermarket & Departmental Store is the only retailers with outlets
in Malaysia. The current chairperson of the company is Dato Sri Md
Kamal Bin Bilal and it was established in year 1968 (The Store (M) Bhd.
Annual Report, 2013). The Store Corporation Berhad has been listed on
Bursa Malaysia since 3 March 1994.
In Malaysia, The Store is considered as the oldest and largest existing supermarket and
departmental chain by The Malaysia Book of Records since year 2001 (The Store, n.d.). They
sells different variety of products such as various types of food and beverage, electrical
appliances, footwear, bags, household items, baby and childrens products, cosmetic and others.
The Store currently has 48 outlets across major cities in Malaysia which providing good and
services to different income level shoppers. Their outlets include The Store Ampang in Selangor,
The Store Batu Pahat in Johor, The Store Grik in Perak, The Store Kangar in Perlis, The Store
Kuala Terengganu in Terengganu and so on.
Its objective is to develop and maintain a positive relationship with all shareholders and
stakeholders through active two-way communication and to promote and demonstrate a high
standard of integrity and transparency through timely, accurate, quality and full disclosures (The
Store, n.d.). The annual profit for The Store in 2013 is RM20, 774,000 (The Store (M) Bhd.
Annual Report, 2013).
Lastly, The Store Supermarket & Departmental Store is conceptualized with the aim of offering
more value for shopping in no-frills environment, by providing good quality products at low
prices and ensuring comprehensive services to shoppers.

1.2 Aeon Co. (M) Berhad

Aeon Co. (M) Berhad is a leading retailer in Malaysia with total
revenue of RM3.51 billion for the financial year under review
(Aeon Mall, n.d.). This company was founded in year 1758, being
established in September 1926 and being set up in Malaysia in year
1984. According to the Aeon annual report 2013, in 1983, Dr.
Mahathir visited Tokyo to meet the Jusco Co. Ltd. President, Mr.
Takuya Okada to discuss the preposition of bringing Jusco name to
Malaysia and the talks ended in a positive note.
The companys current independent non-executive chairperson is Dato Abdullah bin Mohd
Yusof. The AEON name today is well established among Malaysians as well as foreigners,
especially due to its association with the international AEON group of Companies. Aeon provides
various types of service for example, apparel, footwear specialty, convenience, forecourt store,
department store, discount department store, discount store, pharmacy, hypermarket, supermarket
and other specialty. There are also cinema and some entertainments in Aeon.
Aeon has a lot of outlets in Malaysia such as AEON Taman Maluri Shopping Centre in Kuala
Lumpur, AEON mall Kulaijaya in Johor, Kinta City Shopping Centre in Perak, AEON mall Bukit
Mertajam in Penang and so forth. Aeons company slogan is Sharing a sense of lively
participation (Aeon Mall, n.d.). It means that they want to help their customers to enhance their
lifestyles by offering new ideas through the creation of vibrant communities and creating centers
for excitement, fun and lifestyle enhancement.
Basically, Aeon is carrying with the vision of Customer first (Aeon Mall, n.d.). This means the
company is focusing on customer orientation. It has consistently fulfilled the needs of customers
and their communities by concerning all stages of its business, from planning, development and
construction to leasing and operation. Besides, Aeon helps its customers to enhance their lifestyles
by offering new ideas through the creation of vibrant communities and creating centers for
excitement, fun and lifestyle enhancement and that is the companys mission.

1.3 Parkson Holdings Berhad

Parkson Retail Group Limited (PGRL) is the subsidiary of
Parkson Holdings Berhad listed on the Singapore Stock
Exchange and Hong Kong Stock Exchange respectively
(Parkson, n.d.). It is the largest department store in Malaysia
and was founded in year 1987.
Heng Jem Cheng is the current chairperson in Parkson Holdings Berhad. The companys different
outlets have undergone an evolution that sees it moving forward into the 21st century with
resilience. The examples for its outlets are Parkson Petani Parade in Kedah, Parkson Holiday
Plaza in Johor, Parkson KLCC in Kuala Lumpur, Parkson Terminal 1 in Negeri Sembilan,
Parkson Ipoh Parade in Perak and so on. From the different brands it carries to the new services it
now offers, Parkson has indeed kept up with its customers needs.
Parkson provides products like cosmetics, furniture, fashion clothing, branded brands products,
bags, baby and childrens products, electrical appliances and others. Its current net income is
RM436,442,000 (Parkson Holdings Berhad Annual Report, 2013). Its vision is to be Asias
leading department store group. It does not want to be considered as a follower of what the others
are doing. Instead, it wants to be the leader in all things new.
On the other hand, Parksons mission is to inspire our people to delight our customer. They build
strong and long-standing relationship with key business partners and customers and this is why
Parkson is a successful company now (Parkson, n.d.).

B. Evaluation of the Companies Profitability and Liquidity

Profitability:
I.

Net Profit Margin (Net Profit / Sales)

Companies

Workings
Year 2012

Year 2013

= 0.0872

= 0.0873

Aeon Co. (M) Bhd

Parkson Holdings
Bhd

= 0.4984

= 0.0070

49.84

31.90

0.70

1.11

= 0.3190

The Store
Corporation Bhd

Net Profit Margin (%)

Year 2012
Year 2013
8.72
8.73

= 0.0111

Bar chart 2.1 Net profit margin

The table above shows that Aeon earned a net profit of RM0.09 for every RM1 of sales in both
2012 and 2013. Its net profit margin had increased slightly by 0.01% from 2012 to 2013. Besides,
Parkson had a net profit of RM0.50 for every RM1 of sales in 2012 and RM0.32 for every RM1
of sales in 2013. The net profit margin of Parkson had decreased by 17.94%. For The Store, it
only earned RM0.01 net profit for every RM1 of sales in 2012 and 2013. However, The Stores
4

net profit margin had increased by 0.41% from 2012 to 2013. In short, Parkson had suffered a
great decline of net profit margin whereas the other two companies were having a slight
improvement in their respective net profit margin.
II.

Operating Profit Margin (Operating Profit / Sales)

Companies

Workings
Year 2012

Year 2013

= 0.1198

= 0.1232

Aeon Co. (M) Bhd

Parkson Holdings
Bhd

= 0.6228

= 0.0217

62.28

41.95

2.17

2.54

= 0.4195

The Store
Corporation Bhd

Operating Profit Margin (%)

Year 2012
Year 2013
11.98
12.32

= 0.0254

Furthermore, we can see from the table above that Aeon gained an operating profit of RM0.12 for
every RM1 of sales in 2012 and 2013.
profitprofit
margin of Aeon had increased from
Bar The
chartoperating
2.2 Operating
11.98% to 12.32%. Parkson earned an operatingmargin
profit of RM0.62 for every RM1 of sales in 2012
while RM0.42 for every RM1 of sales in 2013. Its operating profit had declined significantly by
20.33% from 2012 to 2013. Moreover, The Store had an operating profit of RM0.02 for every
RM1 of sales in 2012 and RM0.03 for every RM1 of sales in 2013. The operating profit margin of
The Store had increased slightly by 0.37%. In brief, Parkson experienced a major drop of
operating profit margin when Aeon and The Store had an increase in their operating profit margin.

Companies

Workings
Year 2012

Year 2013

Return On Asset (%)

Year 2012
Year 2013

Aeon Co. (M) Bhd

= 0.0793

= 0.0859

III.

= 0.0115

8.59

5.08

1.15

1.85

= 0.0508

The Store
Corporation Bhd

7.65

= 0.0765

Parkson Holdings
Bhd

7.93

= 0.0185

Return On Asset (Net Profit / Total Assets)

In addition, we can observe that Aeon was able to gain a net profit of RM0.08 for every RM1 of
total assets used in 2012 and 2013. However, there is a slight decline of 0.28% in its return on
Bar chart 2.3 Return on Asset
asset from 2012 to 2013. As focusing on Parkson, it was earning a net profit of RM0.09 for every
RM1 of total assets possessed in 2012 and RM0.05 for every RM1 of total assets utilized in 2013.
Its return on asset had decreased markedly by 3.51% from 2012 to 2013. In 2012, The Store
gained a net profit of RM 0.01 for every RM1 of assets used in 2012 while RM0.02 for every
RM1 of assets possessed in 2013. Although the net profit earned by The Store is relatively low, it
had raised by 0.7% from 2012 to 2013.
IV.

Return On Equity (Net Profit / Total Equity)

Companies

Workings
Year 2012

Year 2013

= 0.1449

= 0.1405

Aeon Co. (M) Bhd

Parkson Holdings
Bhd

= 0.1585

= 0.0303

15.85

9.91

3.03

4.64

= 0.0991

The Store
Corporation Bhd

Return On Equity (%)

Year 2012
Year 2013
14.49
14.05

= 0.0464

From the Bar chart 2.4 above, for every RM1 of total equity possessed, Aeon earned a net profit
Bar
2.4onReturn
Equity
of RM0.14 in both 2012 and 2013.
Itschart
return
equityon
had
declined slightly by 0.44% from 2012
to 2013. As for Parkson, for every RM1 of total equity it had, it gained a net profit of RM0.16 in
2012 and RM0.10 in 2013. However, there is a marked decrease in its return on equity by 5.94%
from 2012 to 2013. For The Store, it earned net profit of RM0.03 for every RM1 of total equity
possessed in 2012 and RM0.05 for every RM1 of total equity possessed in 2013. We can observe
an increase in its return on equity by 1.61% from 2012 to 2013. Generally, the return on equity of
the companies had decreased from 2012 to 2013 except The Store.
Liquidity / Solvency:
V.

Current Ratio (Current Assets / Current Liabilities)

Companies

Workings
Year 2012

Year 2013

= 0.7857

= 0.6714

Aeon Co. (M) Bhd

Parkson Holdings
Bhd

= 1.8569

= 1.0910

185.69

185.89

109.10

126.16

= 1.8589

The Store
Corporation Bhd

Current Ratio (x)

Year 2012
Year 2013
78.57
67.14

= 1.2616

On the other hand, Aeon had RM0.79 in current assets for every RM1 in current liabilities in 2012
and RM0.67 in current assets for every RM1 in current liabilities in 2013. It had its current
Bar chart 2.5 Current ratio
liabilities covered 78.57 times over in 2012 while 67.14 times over in 2013. Besides, Parkson
possessed RM1.86 in current assets for every RM1 in current liabilities in both 2012 and 2013.
The current ratio of Parkson had increased slightly by 0.2 times from 2012 to 2013. As for The
Store, it had RM1.09 in current assets for every RM1 in current liabilities in 2012 while RM1.26
in current assets for every RM1 in current liabilities in 2013. Its current ratio had increased by
17.06 times from 2012 to 2013.

Companies

Workings
Year 2012

Year 2013

Aeon Co.
(M) Bhd

= 0.4731

Bhd
The Store
Corporation
Bhd

VI.

= 1.7209

= 0.4975

2012
47.31

2013
33.08

172.09

172.90

49.75

72.48

= 0.3308

Parkson
Holdings

Acid Test Ratio (x)

Year
Year

= 1.7290

= 0.7248

Acid Test Ratio ((Current Assets Inventory) / Current Liabilities))

By observing the bar chart above, we know that Aeon had RM0.47 in liquid current assets for
Bar chart 2.6 Acid Test Ratio
every RM1 in current liabilities in 2012 while RM0.33 in liquid current assets for every RM1 in
current liabilities in 2013. Aeons acid test ratio had decreased by 14.23 times from 2012 to 2013.
For Parkson, it had RM1.72 in liquid current assets for every RM1 in current liabilities in 2012
and RM1.73 in liquid current assets for every RM1 in current liabilities in 2013. There was a
slight improvement in Parksons acid test ratio which is from 172.09 times in 2012 to 172.90
times in 2013.
In 2012, The Store possessed RM0.50 in liquid current assets for every RM1 in current liabilities
whereas in 2013, it had RM0.72 in liquid current assets for every RM1 in current liabilities. Its
acid test ratio had increased by 22.73 times from 2012 to 2013. Generally, the companies had
improvement on their acid test ratio except Aeon.

C. An Assessment on Any Non-financial Information

Parkson Holdings Bhd
According to the annual report 2013, Parkson acquired ODEL PLC in 2013 because it intends to
possess larger market share in fashion and apparel, cosmetics and accessories in next financial
year. By doing this, Parkson can attract customers from young generation. ODEL PLC is an
online fashion store which is listed on Colombo Stock Exchange. ODEL is Sri Lanka's first
example of a retailing company. Starting out as a single company, focusing on the retail garment
trade, ODEL has developed over years and become the first department store in Sri Lanka.
Furthermore, Parkson bought a new land located in Melaka worth 93million (The Edge
Malaysia, 2012). It also plans to expand its business to Cambodia by purchasing a 7-storey mall
in Phnom Penh. The first self-owned retail mall is opened in Kuala Lumpur. This shows that
Parkson focuses shopping mall business because it generates large profit (Parkson, n.d.).
Not only this, Lion-Parkson Foundation set up funds for charity, scientific research and
education. In charity, Lion Group Medical Assistance Fund is making donation to the patients
which need medical assistance urgently. In education, it offers scholarship to the excellent
students. In addition, Lion-Parkson sponsors dialysis machines and community health
programmes (The Store Bhd. Annual Report, 2013).
On the other hand, Parkson Holding Bhd signed a deal as the anchor retailers for the Perda
City Mall (PCM) which is the largest mall in Seberang Perai, Penang which is soon to be opened
and the company is targeting to add some 10% more retail space in the country each year
10

(Malaysian Investment Development Authority, 2014). Meanwhile Parkson and Econsave Cash &
Carry Sdn Bhd signed as the anchor retailers (PCM). Some of the tenants will be McDonald's,
KFC, Pizza Hut, Old Town Kopitiam, Giordano and also Switch Apple Store which will assist in
attracting a lot of consumers to come for consumption. The retail store will be located at the heart
of the new Perda Township, in between Seberang Jaya and Bukit Mertajam, Penang. The mall can
be easily accessible and is surrounded by high catchment population of over 900,000 people with
more than 100,000 of them staying within a 5km-radius from the mall.

The Store Corporation Bhd.

The Store is concerned about its company social responsibilities. According to the annual
report 2013, The Store raised RM 100,000 to 10 old folks home in 8 months time. Not only this,
The Store also launched MyKasih programme and raised another RM 100,000 to the
underprivileged families. The latest charity campaign is to help 7 disabled people association
from 2013 to 2014 (The Store Bhd. Annual Report, 2013). The Store also gives aid to Yayasan
Budi Penyayang Malaysia and Breast Cancer Welfare Association Malaysia (BCWA) by donating
RM 10,200.
The Store celebrated its 45th anniversary in 2013. It is launching a series of activities to give
benefits to its customers and shareholders loyalty. Super Bonanza Anniversary Rewards is
one of the contests to appreciate its loyal customers (The Store Bhd. Annual Report, 2013).
Moreover, The Store had established in-house learning and development programme to its
employees to give better service to the customers. Not only this, Certificate of Anugerah Kedai
Pilihan Rakyat 1Malaysia (AKPR1M) is awarded to 17 The Store outlets by the Ministry of
Domestic Trade. This is to show recognition to The Store about its position in retail industry (The
Store Bhd. Annual Report, 2013).

11

On 26th September 2014, the launching of new retail store at Kota Bharu, Jalan Padang Garong
gave a new image of the company retail store to the consumers (The Store, 2014). The outlet now
has a fresh new look and a wider range of products that should please the shoppers. The shopping
environment tends to be more comfortable now where the interior has a more contemporary dcor
and layout, with brighter lightings and spacious aisles for shoppers to access sections of their
choice with ease. This shows that the company is now expanding its business.

Aeon Co. (M) Bhd

Picture 1.2 The Store Launching

Ceremony on Sept 2014

Aeon is planning to diversify its business into electronics and furniture shop. The first Aeon shop
opened is in Shah Alam. With celebrating its 30 years anniversary, a one year celebration A New
Beginning with You is established to express the appreciation to its customers (Aeon (M) Bhd.
Annual Report, 2013).
According to annual report 2013, Aeon is making some changes and tries to become a leading
retail shop in Malaysia. Aeon focuses in enhancing customers shopping and entertainment
experience in this new era. It will transform its mall into a modern lifestyle hub to sustain its
position in retail industry. (Aeon (M) Bhd. Annual Report, 2013)
Besides, Aeon is growing stronger because of
the best customer service. Aeon aims to
achieve a new milestone in its customer service
by providing in house training and sending
some potential employees to Japan. Aeons
charity programme, With All Our Hearts will
continue making contribution to the society
by focusing on childrens welfare.
Aeon Co. (M) Bhd is buying a piece of
freehold land in Batu Pahat, Johor for RM34.85 million to build a new shopping Centre (Aeon
Buys Land, 2014). In a filing with Bursa Malaysia, Aeon said the acquisition is in line with its

12

strategy to accelerate the expansion of its retail business through opening of new malls and
outlets.
On the other hand, AEON Malaysia became the single biggest donor to theSun Typhoon Haiyan
Relief Fund when the company contributed RM100, 000 to help alleviate the suffering of the
victims (AEON Contributes RM100,000, 2013).
After the typhoon hit the Philippines on November 8, AEON Malaysia was moved to be part of
the cause in channeling financial aid to affected areas. Through its own donation campaign,
which commenced nationwide on Nov 15, AEON successfully raised RM39, 000 from the
contributions of shoppers, business partners and employees. Donation boxes were placed at all of
its retail outlets, credit service counters and branch offices throughout the country. In addition to
the collection, the charity arm of the company, "With All Our Hearts" Malaysian AEON
Foundation, also contributed RM61, 000 to the fund.

Picture 1.1
Present
at
the
cheque
presentation were AEON Credit
(M) Bhd executive director
Kenji Fujita, AEON Big (M)
Sdn Bhd director Mitsuru
Nakata,
theSun
managing
editor Freddie Ng and Mercy
Malaysia executive director
Ahmad Faezal Mohamed.

In addition, Aeon Co (M) Bhd is making headway in its plans to expand to Kuching and Kota
Baru by 2016 (Aeon Will Go to Kuching, 2014). The company is planning its expansion to the
two cities, with the land for the new stores already being identified. Aeon has targeted to expand
into Kedah, Kelantan, Terengganu, Sabah and Sarawak over the next five years. This year alone,
13

Aeon will open three new Aeon outlets as well as two MaxValu stores. Two of the three new
outlets will be part of the new shopping centres in Bukit Mertajam and Taiping. It will also be an
anchor tenant in a shopping mall in the Kuala Lumpur business district.
Last but not least, Aeon established its New Business Promotion Division (New business
project) to make better use of its expertise in the development of multiple shopping malls with a
view to finding new business opportunities. By creating new business that exploits the potential
20 to 30 years from now, Aeon thought it was necessary for the Company to have a new business
mainstay. Instead, the company is studying how to implement business projects that make use of
it strengths and the experience they have accumulated in the development, running, and
management of Malls in suburban areas (Aeon Mall, n.d.).

D. The Proposal, Opinion and Suggestion for Our Clients as to the Best Company to Invest
in
According to the analysis of Aeon Co. (M) Bhd., Parkson Holding Berhad (PHB) and The Store
Corporation Berhad, as a financial advisor, Aeon is suggested to client as the best company to invest
in.
We had carried out the financial analysis throughout these three companies; we found that PHB had
suffered a decline of net profit in year 2012 to 2013 whereas the other two companies were having a
slight improvement in their respective net profit ratio. In this circumstance, the ratio would produce
a high percentage, but the performance of the company would certainly not be as good as it ought to
have been.
Moreover, PHB experienced a major drop of operating profit margin when Aeon and The store had
an increase in their operating profit margin. In addition, we observe that the performance for Aeon
and The Store are more stable than Parkson in which the company was facing a decrease of net
profit in the end of financial year 2013.

14

Generally, PHB has the highest financial ratios that we had calculated in part B, but all the ratios are
decreasing from year 2012 to 2013. This shows that there are some management problems in its
operation, or we can assume that investing in this company is an uncertainty for the investor. To
invest in a company, the investor will just focus on how much the profit earned in the particular year
and the dividend paid. So, for PHB which was dealing with a decrease in net profit margin is not a
suitable choice for investor to invest.
Besides, all the financial ratios of The Store are the lowest as compared to Aeon and PHB, even
though the financial ratios of The Store are increasing from 2012 to 2013. From the perspective of
investor, it is better to get higher return on profit and dividend paid by the company, we analyzed
that The Store is the company which paid the lowest dividend among the three companies.

Furthermore, Aeon is the company that has the highest rate of return on the net profit among the
three companies. In addition, the dividend which investor gets from PHB is on the average as
compared to Aeon and The Store. For Aeon, it paid the highest dividends to its shareholders and
investors in 2013. It is the most considerable company for investor to invest in.
Furthermore, we analyzed the liquidity ratio for three companies. The results show that among these
three companies,

Obviously, Aeon is the prevailing enterprise within these three companies. Based on analysis
(Part B), Aeon has a stable tendency of profitability - it gives higher returns but lower risk to its
investor and this is the what investors desire to. On the other hand, even though PHB has the
highest profitability within the companies, however it has a dramatic drop from 2012 to 2013.
This situation absolutely worries investors since an unpredictable future happens for investing.
They will feel anxious and doubt that whether PHB has a considerably declined in continuous
years. In aspect of investors, PHB gives certain risk for them to invest in. In addition, although
The Store has a slight increase in profitability, yet it has the lowest profitability among the
companies. It gives lower returns but the higher risk for investors. In evidence, it is not the best
company chosen to invest in.

15

From the three companies histories, Aeon is clearly stated as the best company to invest in. Aeon,
which was called Jaya Jusco at the time, was set up in Malaysia in 1984. 30 years later, Aeon has
99 outlets in Malaysia. In 2014, there are some new outlets continually started up in the country.
This shows that Aeon has the potential to continually grow in future - it has the strong and
powerful ability to expand its businesses throughout Malaysia. This is a marvellous news for
investors because the higher incomes and profit gained by company, the higher returns would be
received by investors.

On the other hand, PHB started up its business in Asia in 1993. 21 years later, there are a total of
38 stores in Malaysia. It is apparently lesser than Aeons outlets, indirectly causing investors to
have less confidence to invest in PHB. Moreover, The Store was established in 1968. In 2001, it
had 74 outlets in Malaysia. However, there is no more achievement after 2001. It is unbelievable
that there are a miserable number of outlets in 2014 - there is only one retail store started up at
Kota Bharu. In perspective of investors, it has smaller potential to expand it businesses.
Therefore, the clients are not encouraged to invest in it.
In terms of evaluation of companies profitability and liquidity (part B), Aeon is the best company
to invest in. It shows that it has stunning ability of financial management when operating
businesses. It can remain a stable profitability year by year, and provide higher returns but lower
risks to its investors comparing to other companies. This causes investors are fully confident to
invest in it.
On the other hand, PHB seems to have serious problems in its internal part of operation there
are a large number of finance losses. It is easily to find out that its profitability and liquidity are
substantially fallen from 2012 to 2013. Besides, the profitability and liquidity of The Store is the
lowest within three companies. This proves that it absolutely lacks of superior ability of financial
management, causing a distinction occurs on finance of Aeon and PHB.

16

Target consumer of companies is also one of the considerable elements in choosing the best
company to invest in. In comparison, Aeon is suggested for client as the best company to invest
in. This is because Aeon has a bigger targeted consumer range- it is consisted of normal income
society and also higher income society.
Furthermore, the selling price of goods sold with good quality is affordable and acceptable for its
target consumers. This brings higher revenue and profit to company since consumers could and
willing to consume at Aeon. When higher profit Aeon earned, higher returns could be received
by investors. Moreover, PHB only targeted the specific range of consumer - it is almost consisted
of higher income societies. This is because the goods sold are imported from foreign countries
and caused the setting price is very high for the consumers.
In addition, even though The Store has almost same target consumers with Aeon, however its
profitability is the lowest. In order to boost the sales, there is a lot of promotions hold. The Store
even more sets the selling price in cheap. Yet, cheap means no quality in consumer minds.
Thus, the number of consumer consume is dropped year by year. As a result, the profit earned by
The Store is lesser. This reflects investor would receive lesser returns if they invest in The Store.
We also evaluated the dividends paid by each company in year 2012 to 2013. Below is the summary
of the dividends paid by three companies:
Companies

Dividend paid (Sen)

Year 2012

Year 2013

Aeon Co. (M) Bhd

17.25

22.00

Parkson Holdings Bhd

The Store Corporation

16.00

18.00

3.75

3.75

Bhd

17

A.

Bar chart 2.7 Dividend paid by

three companies

From the graph above, we can analyze that the dividend paid by Aeon in year 2012 and 2013 is
highest among these three companies. The amount paid per share is 22sen in year 2013, which is
increasing 4.75sen compare with 2012. For investor who invests in the company can enjoy more
dividends paid in year 2013. We estimated that the sale performance and also net profit of Aeon in
2014 will also be considerable.
According to Adeline Chua Phaik Harn The social responsibility in marketing 2014, as
companies can be benefit from their contributions to society and at the same time minimize the
negative impact they have on the natural and social environment. Social responsibility demands
that marketers accept an obligation to give equal weight to profit, consumer satisfaction, and
social well-being in evaluating their firms performance. In line with the principle "Peace, People
and Community", AEON Corporate Social Responsibility is asserted to encourage a positive
impact the environment, consumers and communities.
Aeon is good in its corporate social responsibility (CSR) programs. This company believes that a
green environment is the basis for a better life. Aeon had developed a comprehensive ecology
program to address the global warming issue and aim to significantly eliminate carbon dioxide
(CO2) emissions. To create higher environmental awareness and educate younger generations on
the importance of environment protection, they have involved the participation of various parties,
including staff members, customers, students, Non-Governmental Organizations (NGOs),
government agencies and other communities, in every program initiated by the company.

18

This show that Aeon is more concern toward the society and respond to consumers growing
concern about ecological issues. So we can conclude that Aeon manages to recognize the
importance of relatively qualitative consumers and social benefits as well as the quantitative
measures of sales, revenue, and profit. And this can increase the confident of investors to invest
in.

19

E. Two Additional Information that will Further Enhance Our Proposal/Opinion/Suggestion

to Our Client
According to the Aeon annual report 2013, we found additional information that can further
enhance our proposal choice which is Groups risk management and internal control system of
Aeon group. It had constructed a clearly defined authority level to all the positions that are held
by the entire workers. Any expenses or operation are monitored by Groups business operation
department by using advance IT technologies and the group defined as The Audit and Risk
Management Committee (ARMC).
A risk management committee is established as a company-wide risk management body, placed
as a sub-organization of the management conference, to control business risks related to disaster,
environment and compliance. The committee identifies all possible company-wide risks, monitors
risk management operation, exchanges information, constantly reviews the risk management
systems, and at the same time formulates risk management policies. The policies are then used to
produce specific rules and guidelines at each risk management supervising division and conduct
periodic reviews.
All these details are thoroughly notified to all employees through education and training
programmes as well as an electronic bulletin board system. Upon the occurrence of any danger of
imminent and serious loss, appropriate information distribution and decision making are
performed based on the "Rules for Control of Management Danger", followed by measures to
control or minimize the damage. Due to Aeon has good risk management, the investor can be
trustingly to invest in this company.
Decision made by the directors is recorded and managed in an appropriate manner by the
executive director of each department in Aeon, who is responsible for producing documents such
as written approval and meeting minutes in line with company regulations. A board of directors
meeting in Aeon is held monthly and whenever it is necessary.

20

Critical issues requiring decision making by the president or higher, which may contain a risk
affecting the company, are discussed from various perspectives in a management conference
serving as the president's advisory body which consists of managing directors and full-time
corporate auditors as the core members and the final decision is made by the president or
resolution by the board of directors.
Besides, the superior goodwill of Aeon cannot be denied by everyone. Aeon is in the top 25
global retailers list, this shows that the brand value of Aeon is the most valuable among these
three companies. It is Japan's second largest retail company, operates supermarkets, convenience
stores, malls and a stable of specialty shops (Retrieved from http://www.licensemag.com/licenseglobal).
Due to the exceptional management, fully trained and skilled employees situate Aeon in a
desirable state. In addition, a well-known brand name business is easier to operate for the next 10
or 15 year based on the good customers relation and good contact with suppliers. These will help
Aeon to reduce a lot of problems and allow it to focus more in its managements (Investopedia,
n.d.).

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F. Limitations of the Analysis

The first limitation is the financial statement will mislead the user (Accounting-Management,
n.d.). All the accuracy of financial information totally lays on how accurately the financial
statement had been prepared. If there are some mistakes made by the accountant who provides the
financial statement, the users will believe that the information written is totally true although it is
not. It causes users misunderstanding and eventually results in wrong decisions and actions taken
by the users.
Besides, another limitation is not really satisfaction for future planning. Due to the figures used in
the financial statement are historical data, users cannot fully utilize them for planning any future
projects or investment just for prevent any loss or make any important decision. These limitation
of analysis will affect quite lot of investors and also affect the company that listed in stock
markets (Accounting-Management, n.d.).
Furthermore, the qualitative aspect is also one of the limitations of analysis of proposal.
Commonly the financial statement only show in quantitative information about the companys
financial condition, but there are quite lot of information are fails to provide in quantitative forms.
For examples, management labor relation, customers feedback and the management skills of
board of directors (Accounting-Management, n.d.).
Other than that, Wahid, M., 2013, said that wrong judgments will occur due to the skills used by
the analyst without capable knowledge and it will lead to wrong direction. As a result, will face
the problem on losing investment funds or be a victim in stock market.
Finally, users will make comparison with not possible and not accurate data or statements. All
those company financial statements are based on the historical data that collected. Therefore
making a comparison between different year are not possible due to inflation distorts, different of
economics condition and also the policy of government. As a results, we totally cant make an
accurate comparison by using the financial statements that given by companies (Michael, C. &
Steven, K., 2001).

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