7-ELEVEN GROUP

AMALL RAIHAN BINTI ABDUL RAZAK (MKA151157)

SITI NOR SHARBANA BINTI AZMI (MKA 151154)
ADELYNNA ANAK TOK (MKA 151167)
GROUP FINANCIAL STATEMENT
CURRENT ASSETS 418,611
Inventories 180,705
Sundry receivables 105,814
Tax recoverable 5,605 5,605
Cash and bank
balances 126,487
CURRENT LIABILITIES 558,808
Provisions 701
Borrowings 1,946
Trade payables 410,980
Other payables 145,161
Taxation 20
TOTAL EQUITY 170,194
Share capital 123,338
Share premium 1,361,800
Treasury shares (58,913)
Capital reorganisation
deficit (1,343,248)
Retained profits 87,217
LONG TERM ASSETS 325,058
LONG TERM LIABILITIES 14,667
REVENUE 2,006,284
COST OF SALES (1,387,965)
GROSS PROFIT 618,319
PROFIT FROM
OPERATION 78,155
EBIT 78,468
PROFIT BEFORE TAX 77,842
CURRENT RATIO
◦ The current ratio this company is less than 1, indicating that 7-eleven group is having
short-term liabilities more than current assets.
◦ This is a poor condition where 7-Eleven’s short-term assets are not readily available to
pay off all its short-term liabilities using total current asset (both liquid and illiquid)
◦ The higher the current ratio is the better for a company

418611
=
558808
= 0.75
QUICK RATIO
◦ The quick ratio is a strong indicator of whether a firm has sufficient short-term assets to
cover its immediate liabilities
◦ The short-term assets of 7-Eleven are only to cover 43% of its immediate liabilities.
◦ This is also a poor condition.

= 418611 – 180705
558808
= 0.43
INVENTORY RATIO
◦ This ratio implies strong sales of 7-eleven where inventories are sold at 11.10 times to
achieve revenue.

= 2006284
180705

= 11.10
TOTAL ASSET RATIO
• It indicates the efficiency of 7-eleven to use its assets to generate sales

• This ratio helps to measure the productivity of a company's assets. It

indicates management effectiveness at managing a firm balance sheet
its assets as indicated by the amount of sales generated per one ringgit of
assets.

= 2006284
(418611+325508)

= 2.70
ACCOUNT RECEIVABLE TURNOVER
• This ratio determine how quickly a company collects outstanding cash
balances from its customers during an accounting period.
• 7-eleven is efficient in collecting outstanding sales

= Net Credit sales/

Average Account
Receivables

= 2006284_____
(105814 +85527)/2

= 20.97
AVERAGE COLLECTION PERIOD
• This ratio gives average amount of time needed to collect accounts
receivable
• 7-eleven manage to collect its cash in average of 17.4 days; that is within
30 days credit period.
= 365/ Account Receivable Turnover

= 365_____
20.97
= 17.4 days
ACCOUNT PAYABLE TURNOVER
• 7-eleven is slow in paying its creditors

= Total purchases*/ Average Account Payable

*Purchase = COGS+ ending inventory - opening inventory

= 1387965 + 180705 - 148989

(557479+484583)/2

= 2.72
AVERAGE PAYMENT PERIOD
• 7-eleven is not able to pay within 30 to 90 days which shows that they have a
poor credit management.

= 365/ Account Payable Turnover

= 365_____
2.72
= 133 days
DEBT RATIO %
◦ 7-eleven relies on debt as much as 77% to its assets.
◦ The excessive debt can lead to a very heavy interest and principal repayment burden

= Total liabilities / Total Assets

= (558808 +14667) X100

(418611+325508)

= 77 %
TIMES INTEREST EARNED RATIO
◦ 7-Eleven is able to meet its interest obligations because earnings are significantly
greater than annual interest obligations.
◦ However, a high ratio can also mean that it has an undesirably low level of leverage or
pays down too much debt with earnings that could be used for other investment
opportunities to get higher rate of return.
EBIT (Earnings Before Interest and Tax)/Interest

= 748468
313

= 250.7
 ◦ TIMES INTEREST EARNED RATIO

DEBT TO EQUITY RATIO

• This ratio gives the proportion of 7-eleven assets that are financed by debt versus
equity. It is a common measure of the long-term viability of a business and along with
current ratio, a measure of its liquidity, or its ability to cover its expenses.

• This ratio shows how much suppliers, lenders, creditors and obligors have committed
to the company versus what the shareholders have committed.

Total liabilities/ shareholders equity

= 558,808+14,667
123,338

= 4.65
GROSS PROFIT MARGIN %
◦ This is to analyse how efficiently a company is using its raw materials, labour and
manufacturing-related fixed assets to generate profits
◦ 7-eleven has a gross profit of 30.82%

Gross profit/ Sales

= 618319 X 100
2006284

= 30.82 %
OPERATING PROFIT MARGIN %
◦ It indicates management’s effectiveness in managing the firm’s income relative to
sales.
◦ 7-eleven has a profit of 3.9% after all costs and expenses (other than interest, taxes, and
preferred stock dividends) are deducted from gross profit margin

Operating profit/ Sales

= 78155 x 100
2006284

= 3.90 %
NET PROFIT MARGIN %
◦ It is the critical ratio of profitability.
◦ The shareholders of 7-eleven earn 2.78% profit from the sales.

Earnings for stockholders/Sales

= 55801 x 100
2006284
= 2.78 %
EARNINGS PER SHARE (EPS)
◦ Each share earned 4.5sen profit

Earnings for stockholder/Number of

shares of stock outstanding

= 55801
(123338/0.1)
= 0.045
= 4.5 sen
PRICE / EARNINGS RATIO
◦ The price of share is 2.21 times the earning per share
◦ A higher price-earnings ratio means the optimistic future growth prospects.

Market price per share of common

stock/EPS

= 0.1
0.045
= 2.21
ANALYSIS
FINANCIAL RATIO
CURRENT RATIO 0.75 Poor
QUICK RATIO 0.43 Poor
INVENTORY RATIO 11.1 Good
TOTAL ASSET RATIO 2.7 Good
ACCOUNT RECEIVABLE TURNOVER 20.97 Good
AVERAGE COLLECTION PERIOD 17.4 days Good
ACCOUNT PAYABLE TURNOVER 2.72 Poor
AVERAGE PAYMENT PERIOD 133 days poor
DEBT RATIO % 77% poor
TIMES EARNED RATIO 250.7 Very good
DEBT TO EQUITY RATIO 4.65 poor
GROSS PROFIT MARGIN % 30.82% good
OPERATING PROFIT MARGIN % 3.90% ok
NET PROFIT MARGIN % 2.78% ok
EARNINGS PER SHARE (EPS) 4.5 sen ok

PRICE PER EARNING RATIO 2.21 ok

SUMMARY
◦ 7-eleven nature of business is stores chain which deals with inventories and active cash
flows.
◦ Based on the analysis of liquidity ratio the result shows a unhealthy financial condition;
the obligations of 7-eleven towards their liabilities is high.
◦ Based on the analysis of activity ratio, 7-eleven managed to collect payment from their
creditors (sundry receivable) within 30-days period but they took more than 90 days
(133 days) to do payments to the debtors (suppliers etc.)
◦ We can see that as a bank, its difficult for 7-eleven to get loans. 7-eleven should raise
their financial source through their share capital.
THANK YOU