1.

0 Executive Summary

In this report was shown the purpose of Padini holding Berhad development. The
detailed have the background of Padini company, the industry specific and general
market factors, such as PESTE, also talk about the latest development in Padini, the
financial analysiss research was from the: Income statement, Statement of Financial
position and Cash flow statement. Liquidity ratios, profitability ratios, efficiency ratios
and investment ratios shows company good or not. Profitability trend had use 4 years to
analysis. The limitation in Padini company that is the limitation of current ratio is unable
to assess future flows. Do not mirror the company's financial condition, the real received
payment will be different! And the variability of stock value. After compared will find
PADINI company is a pretty decent company to be invest.

2.0 Company background

The fundamental of Padini Holding Bhd at 1975, and main company at Shah Alam,
Malaysia. Dow Jones & Company, Inc. 2016 Padini Holding Bhd is the company
well known by others is a sector of few of manufacturing. It has some products which
process by business categories such as dresses for women, clothes for men, shirts for
kids, bags, shoes and accessories. Those some brands had included by Padini Holding
Bhd is Vincci, Vincci plus, Vincci accessories, Padini Authentic, PDI, Seed, Seed cafe,
Miki kids, Miki mom, Tizio, and Move. The company also have to trade and supplying of
garments to retailers and distributor. In Malaysia, Padini Group has one of most multi-
billion textiles also a huge garment corporation. There is 9 design in a family of brands
among this there are also 330 freestanding stores which are retail for the buyers moreover
the company also have a lot of franchised outlets.

3.0 Industry specific and general market factors

3.1 PESTLE
Political Factor: the factor of political in Padini has influenced the way of selection and
shopping in Malaysia: local and international tourist, also increased the consumption in
clothing industry by hold the government's proposition "mega sale carnival".
Economic Factor: there an increasing trend of private consumption, that led a positive
impact on more people spending on clothes and footwear nowadays because of the
supported by launched of the national campaign by the government.
Social Factor: the increase of Malaysian consumers' lifestyle has changed because the
level of education. Hence the high profile retailers able to shape the buying behavior of
consumers and led Malaysian style more westernized.
Technological Factor: with the high speed of development on internet and e-commerce,
online shopping become more convenience for consumers and retailers, that consumers
can easily and faster delivery the goods. Padini should create an online shopping service
for their consumers. Save the shopping time on a store, reduce the cost of opening a new
retail store.
Environment Factor: change of environmental has the major impact on virtually almost
every product, services, markets, and consumers. In Padini environmental affect a lot of
trends, that update more latest fashion to consumers nowadays. (Anon., n.d.)

3.2 The lasted development in the industry of the Padini company

According to Padini annual report 2015. Padini group will following the financial year
concerned to do some activities. First is to prevent redundant by greatly to reduce
dependence on the distribution channels to generate income. The second one is to manage
the loss of our consignment shop experience, related services and equipment provider
construction joint electronic clock. Installation requires fingerprint verification of an
employee's attendance reading system, should put an end to fake employees into the
payroll.

4.0 Financial analysis

4.1 Trend analysis

The base year is 2012, its amounts will equal 100%from the four years. Until 2015,
revenue percentage increase of 113%, COGS increase of 119%, Gross margin increased
to 106%. (see appendix) So the cost of goods sale growth faster than sales in Padini
which is slowing the increase in the gross margin.

4.2 Ratios analysis

4.21 Liquidity Ratios

Current ratio: In 2015, Padinis current ratio is 2. 64 which means Padinis short-term
debt ability. It's lower than 2014 and the 2014 current ratio is 2.83. when the current ratio
is more than 2.0 that mean is good for a business. This shows that the company has
enough cash to repay debt. But there is no more money to be reinvested in liquid assets or
shareholders were shackled.
Acid-test-ratio: view the year 2014, the acid test ratio is 0.96and its lower than the year
2015, the acid-test ratio is 1.06, This means that for every RM of Padini's current
liabilities, the firm has 1.06 of very liquid assets to cover those instant responsibilities.
The higher the acid test ratio, the more economic security company in the short term.
According to experience, the general rule is that the company has the acid test or quick
ratio greater than 1.0 have enough to meet their short-term liabilities. So, it shows when
ratio coming up, the cash will be increase.
4.22 Profitability ratios

Return on capital employed (ROCE): In Padini company, the Return of capital employed
shows revenue generated from a utilization of assets. In 2014 Padini company was 30.66
percent of the time, but by 2015 the ROCE fell to 26.25% in the company. According to
When return of capital employed less than the required rate of return, the shareholders
will lose valuable, then shareholders will share decrease. its will show the lower
profitability. On the other hand, if profit decrease, the return of capital employed
decreased. In Padini company the ROCE still maintain the standard, which means the
profit is good.

4.23 Efficiency ratios

Account receivable turnover: Padini have the high value of account receivable turnover in
2015, and the number is: 18.50. In 2014, the account receivable turnover is 16.54. it
shows that successful of a development of cash collection on credit sales. The company
achieved from strictly credit policy and cash basis for, a particular process.

4.24 Investment Ratios

EPS: compare to 2014, the earning per share in 2015 is 12.19%, it decreased. In 2014 the
earning per share is 13.82%. the earning per share of Padini company have higher rate so
it has the strong financial position. it shows investor can invest money in this company.
Even though the Padini company have slight fall in 2015.but still showing the company
has good earning per share rate. From year by year, the company has to keep improving
the earning power of the company.

5.0 Limitations of the analysis

Compared the both companies, Padini company have higher liquidity than Voir company,
which is the current ratio in 2014 have 2.83, and 2.64 current ratios in 2015. Voir
company is 2.72 and 2.29 in 2015 and 2014.The acid test ratio in 2015, Padini company
is 1.06 higher than Voir company. In 2014, Padini company has 0.96 and Voir company
has 0.46 in acid test ratio. Padini has enough cash to pay their short liabilities obligation
in 2015 only. In past time, Padini company hard to pay their short-term obligation in
2014 and Voir company not enough to pay their short-term obligation in 2015 and 2014
years.
After analysis, the data of earning per share by two companies, Padini slightly decrease in
2014 to 2015. It means the company has to receive less profitability ratio to allocate the
profit shareholders. The competitor of Voir had increased earnings per share year by year
so the company has got higher profitability.
In profitability ratio, the padini company was decreased in 2015, its lower than 2014.but
compared Voir company, the probability ratio is higher. But the efficiency ratio, Padini
company has 18.5 in 2015, it was increased by 2014. At Voir company the Efficiency
ratio only have the lower ratio, it was decreased by 2014. It not successful of the
development of cash collection on credit sales.
Due to ineffective use of assets; liquidity risk may arise which is obviously a most
challenging risk compared to other financial risks. The limitation of current ratio is
unable to assess future flows. Do not mirror the company's financial condition, the real
received payment will be different! And the variability of stock value! (Jakob, McGowan,
Billah, 2015)

6.0 Conclusion:

After compared with Panini and Voir. You will find PADINI company is a pretty decent
company to be invest. Padini performance is increased year by year. Although some ratio
lower than last year. We can see Padini company's data in 2015 relative to 2014 is better.
It is shown that a company has an ability to satisfy the short-term debt duties, company's
ability to meet its short-term responsibilities using its most liquid assets. The company
has the ability to repay its duties, and will use its fixed assets to generate revenues. Padini
company uses its resources, materials, and labor to generate profits, and more efficient at
using its capital to generate income. So, Padini is a good company that investors can
invest. Despite some of the ratio is fall down in 2015, but I believe it will give the
investors more and more profits.