Project Report: Financial Analysis of ISETAN and Metro Holdings

This project report provides a comprehensive financial analysis of ISETAN (SINGAPORE) LTD and Metro Holdings, two companies operating in the property and retail segments in Singapore. The report begins with company overviews, followed by detailed analyses of their balance sheets and income statements for the years 2015 and 2016. Ratio analysis, including liquidity, profitability, efficiency, and solvency ratios, is performed to assess the financial health and performance of both companies. The findings highlight the strengths and weaknesses of each company, leading to investment recommendations for both short-term and long-term perspectives. The report concludes with a summary of the findings and recommendations, supported by references and an appendix containing financial data. The analysis aims to assist investors in making informed decisions based on the financial performance of the companies.

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Project Report: Accounting for managers

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Introduction:
This report has been prepared to present the financial condition of the ISETAN
(SINGAPORE) LTD and Metro Holdings limited to analyze the financial performance and
the financial position of both the companies. This report depict that it becomes easy for the
user to identify and evaluate the best company on the basis of financial tools. Both of these
companies are performing its business into property and retail segment. The market share of
both the companies is competitive.
Company overview:
The background, mission, vision operations etc of both the companies have been
analyzed. The description of both the companies is as follows:
ISETAN (SINGAPORE) LTD:
ISETAN limited is an international company which has it’s headquarter into
Singapore. The main operations of this company are operating the supermarkets, operational
department and it trades into the general merchandise. This company administers its
functions into two departments which are property segment and retail segment. This company
manages various property and the operations in the Singapore. Currently, this company is
managing various activities to enhance the market share and manage the performance of the
company (Home, 2017).
METRO HOLDINGS LTD:
METRO HOLDINGS limited is an international company which has it’s headquarter
into Singapore. The main operations of this company are property development and
investment. This company administers its functions into two departments which are property
segment and retail segment. This company manages various property activities and the retail
operations in the market of Singapore (Home, 2017). Currently, this company is managing
various activities to enhance the market share and manage the performance of the company.
Balance sheet and income statement:
Balance sheet and income statement of both the companies have been analyzed to
administer the performance and the financial position of both the companies. The details of
financial statement of both the companies are as follows:

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METRO HOLDINGS LTD:
Metro holdings limited’s financial statement has been analyzed. Form the income
statement of the company; it has been found that the total revenues of the company have been
enhanced form 2015 in 2016. The revenue of the company was SGD 145826000 in 2015
which has been enhanced by 6.01% in 2016. Further, the gross profit of the company has also
been enhanced by 35.99% but the net profit of the company has been lowered from 2015
(Garrison, Noreen, Brewer & McGowan, 2010). Operating expenses of the company has been
improved and they have impacted over the operating income of the company.
Further, the balance sheet of the company has been analyzed and it has been found
that the various changes have taken place into the performance of the comapny as well. Total
current assets of the company have been improved by 0.39% from 2015 whereas the total
current liabilities of the company have been lowered by 36.54% in 2016 (Bloomberg, 2017).
The total assets of the comapny has been reduced by 6.58% in 2016 due to the changes into
the long term position of the company whereas the total liability and equity of the company
has also been reduced by 40.99% and -0.12% which depict about huge changes into the
financial position of the company.
ISETAN (SINGAPORE) LTD:
Further, the ISETAN (SINGAPORE) limited’s financial statement has been analyzed.
Form the income statement of the company; it has been found that the total revenues of the
company have been lower form 2015 in 2016. The revenue of the company was SGD
302178000 in 2015 which has been lowered by 2.05% in 2016. Further, the gross profit of the
company has also been lowered by 2.5% but the net profit of the company has been improved
far better from 2015 (Garleanu & Pedersen, 2007). Operating expenses of the company has
been improved and they have impacted over the operating income of the company.
Further, the balance sheet of the company has been analyzed and it has been found
that the various changes have taken place into the performance of the comapny as well. Total
current assets of the company have been improved by 3.53% from 2015 whereas the total
current liabilities of the company have been lowered by 16% in 2016. The total assets of the
comapny has been reduced by 3.03% in 2016 due to the changes into the long term position
of the company whereas the total liability and equity of the company has also been reduced

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by 12.06% and -0.21% which depict about huge changes into the financial position of the
company (Reuters, 2017).
Ratio analysis:
Further, the study has been done over the ratio analysis of both the company to
analyze and evaluate the best comapny in terms of the investment and financial position. The
study of ratio analysis of both the companies is as follows:
METRO HOLDINGS LTD:
Ratio analysis study over METRO HOLDINGS Limited depict about the financial
position of the company on various basis such as liquidity, profitability, efficiency and
solvency. Liquidity ratios of the company depict that the liquid position of the company is not
at all good. The debt position of the company is quite good but the comapny is suggested to
reduce the level of the current assets to manage the cost of the company. Further, the
profitability ratio of the company depict that the profitability ratio of the company has been
lowered but still the net profit margin of the company is very higher and depict about the
good performance of the company in the market (Davies & Crawford, 2011).
Further, the efficiency and solvency position of the company depict that the company
has lowered the days of inventory turnover and accounts receivable to manage the extra cost
and the cash conversion cycle of the company. This analysis depict that the performance of
the company is getting better (Morningstar, 2017). Lastly, the solvency position of the
company depict the company is required to enhance the level of the debt to reach over the
position of optimal capital structure.
ISETAN (SINGAPORE) LTD:
Ratio analysis study over ISETAN (SINGAPORE) Limited depict about the financial
position of the company on various basis such as liquidity, profitability, efficiency and
solvency. Liquidity ratios of the company depict that the liquid position of the company is
quite good. The debt position of the company is quite good and the cost of the company is
also managed by the company. Further, the profitability ratio of the company depict that the
profitability ratio of the company has been enhanced but still the net profit margin of the
company is very lower and depict about the bad performance of the company in the market
(Davies & Crawford, 2011).

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Further, the efficiency and solvency position of the company depict that the company
has enhanced the days of inventory turnover and accounts receivable to manage the sales and
the production of the company (Morningstar, 2017). This analysis depict that the performance
of the company is getting better. Lastly, the solvency position of the company depict the
company is required to enhance the level of the debt to reach over the position of optimal
capital structure.
Findings and analysis:
Through the above analysis, it has been found that both of these companies are better
from each other in different activities. The ratio analysis study depict that the liquidity
position of ISETAN is better than METRO ltd whereas in profitability ratios, metro limited is
performing well. Further, the solvency and efficiency ratios depict that the performance of
both the companies are average and both the companies are required to make few changes
into its policies.
Recommendation and conclusion:
According to the evaluation, it is recommended to the investors to invest into the
METRO HOLDINGS limited for the short term and in ISETAN limited for long term .this
would assist the investors to get more return.

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References:
Bloomberg. (2017). METRO HOLDINGS LIMITED. Retrieved from
https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=878812
available as on 9th Nov 2017.
Davies, T. & Crawford, I., (2011). Business accounting and finance. Pearson.
Garleanu, N. B., & Pedersen, L. H. (2007). Liquidity and risk management (No. w12887).
National Bureau of Economic Research.
Garrison, R. H., Noreen, E. W., Brewer, P. C., & McGowan, A. (2010). Managerial
accounting. Issues
Home. (2017). ISETAN SINGAPORE LIMITED. Retrieved from
https://www.isetan.com.sg/ available as on 9th Nov 2017.
Home. (2017). METRO HOLDINGS LIMITED. Retrieved from
http://www.metroholdings.com.sg/ available as on 9th Nov 2017.
Morningstar. (2017). ISETAN SINGAPORE LIMITED. Retrieved from
http://financials.morningstar.com/cash-flow/cf.html?t=I15&region=sgp&culture=en-
US available as on 9th Nov 2017.
Morningstar. (2017). METRO HOLDINGS LIMITED. Retrieved from
http://financials.morningstar.com/income-statement/is.html?
t=M01&region=SGP&culture=en_US available as on 9th Nov 2017.
Reuters. (2017). ISETAN SINGAPORE LIMITED. Retrieved from
https://www.reuters.com/finance/stocks/companyProfile/ISETbi.SI available as on 9th
Nov 2017.

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Appendix:
Fiscal year ends in December. 2016-12 2015-12
Revenue 294638000 302178000 -2.50%
Cost of revenue
Gross profit 294638000 302178000 -2.50%
Operating expenses
Other operating expenses 306763000 300998000 1.92%
Total operating expenses 306763000 300998000 1.92%
Operating income -12125000 1180000 -1127.54%
Other income (expense) 15056000 -27827000 -154.11%
Income before income taxes 2931000 -26647000 -111.00%
Provision for income taxes 362000 -823000 -143.99%
Net income from continuing operations 2569000 -25824000 -109.95%
Net income 2569000 -25824000 -109.95%
Net income available to common
shareholders 2569000 -25824000 -109.95%
Earnings per share
Basic 0.06 -0.63 -109.52%
Diluted 0.06 -0.63 -109.52%
Weighted average shares outstanding
Basic 41250000 41250000 0.00%
Diluted 41250000 41250000 0.00%
EBITDA 2795000 15159000 -81.56%
Fiscal year ends in December. 2016-12 2015-12
Assets
Current assets
Cash
Cash and cash equivalents 54688000 63328000
-
13.64%
Short-term investments 11753000
Total cash 66441000 63328000 4.92%
Inventories 11489000 12526000 -8.28%
Prepaid expenses
Other current assets 13002000 11980000 8.53%
Total current assets 90932000 87834000 3.53%
Non-current assets
Property, plant and equipment
Land 27971000 27971000 0.00%
Fixtures and equipment 90733000 89541000 1.33%
Other properties 4500000 4411000 2.02%

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Property and equipment, at cost 123204000 121923000 1.05%
Accumulated Depreciation -75159000 -71660000 4.88%
Property, plant and equipment, net 48045000 50263000 -4.41%
Intangible assets
Deferred income taxes 294000
Other long-term assets 87772000 95453000 -8.05%
Total non-current assets 135817000 146010000 -6.98%
Total assets 226749000 233844000 -3.03%
Liabilities and stockholders' equity
Liabilities
Current liabilities
Taxes payable
Other current liabilities 47186000 56227000
-
16.08%
Total current liabilities 47186000 56227000
-
16.08%
Non-current liabilities
Deferred taxes liabilities
Other long-term liabilities 7183000 5597000 28.34%
Total non-current liabilities 7183000 5597000 28.34%
Total liabilities 54369000 61824000
-
12.06%
Stockholders' equity
Common stock 91710000 91710000 0.00%
Retained earnings 62735000 62229000 0.81%
Accumulated other comprehensive
income 17935000 18081000 -0.81%
Total stockholders' equity 172380000 172020000 0.21%
Total liabilities and stockholders' equity 226749000 233844000 -3.03%
ISETAN (SINGAPORE) LTD (I15) Statement of CASH FLOW
Fiscal year ends in December. SGD. 2016-12 2015-12
Cash Flows From Operating Activities
Inventory 1037000 1424000
Other working capital -6940000 -366000
Other non-cash items 146000
-
10513000
Net cash provided by operating activities -5757000 -9455000
Cash Flows From Investing Activities
Investments in property, plant, and equipment -8823000 -

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11626000
Property, plant, and equipment reductions 81000
Acquisitions, net 9918000
Purchases of investments -7953000
-
19629000
Sales/Maturities of investments 3265000 16500000
Purchases of intangibles -127000
Other investing charges 2819000 2656000
Net cash used for investing activities -820000
-
12099000
Cash Flows From Financing Activities
Cash dividends paid -2063000 -3094000
Net cash provided by (used for) financing
activities -2063000 -3094000
Net change in cash -8640000
-
24648000
Cash at beginning of period 63328000 87976000
Cash at end of period 54688000 63328000
Free Cash Flow
Operating cash flow -5757000 -9455000
Capital expenditure -8950000
-
11626000
Free cash flow
-
14707000
-
21081000
Supplemental schedule of cash flow data
Financial Data
Description Isetan Singapore limited
2016 2015
Revenue 29,46,38,000 30,21,78,000
Cost of goods
sold - -
Gross profit 29,46,38,000 30,21,78,000
Operating profit (1,21,25,000) 11,80,000
Net profit 25,69,000 (2,58,24,000)
Inventory 1,14,89,000 1,25,26,000
Current assets 9,09,32,000 8,78,34,000
Receivables 1,30,02,000 1,19,80,000

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Current
liabilities 4,71,86,000 5,62,27,000
Payables 4,71,86,000 5,62,27,000
Equity 17,23,80,000 17,20,20,000
Total liabilities 5,43,69,000 6,18,24,000
Total assets 22,67,49,000 23,38,44,000
Description Formula Isetan Singapore limited
2016 2015
Profitability
Net margin
Net
profit/revenues 0.87% -8.55%
Gross Profit
margin
Gross Profit /
sales 100.00% 100.00%
Liquidity
Current ratio
Current
assets/current
liabilities 1.93 1.56
Quick Ratio
Current assets-
Inventory/current
liabilities 1.68 1.34
Efficiency
Inventory
turnover
Inventories/ cost
of goods
sold*365
Accounts
receivable
Receivables/
Total sales*365 16.11 14.47
Solvency
Debt to Equity
Ratio Debt/ Equity 0.32 0.36
EPS 0.17 -
Fiscal year ends in March. 2017-03 2016-03 Changes
Revenue 154595000 145826000 6.01%
Cost of revenue 143237000 137474000 4.19%

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Gross profit 11358000 8352000 35.99%
Operating expenses
Sales, General and administrative 42936000 29873000 43.73%
Other operating expenses 8607000 6887000 24.97%
Total operating expenses 51543000 36760000 40.21%
Operating income -40185000 -28408000 41.46%
Interest Expense 557000 1156000 -51.82%
Other income (expense) 163074000 175102000 -6.87%
Income before income taxes 122332000 145538000 -15.94%
Provision for income taxes 9040000 3181000 184.19%
Minority interest 163000 -510000 -131.96%
Other income 163000 -510000 -131.96%
Net income from continuing operations 113292000 142357000 -20.42%
Other -163000 510000 -131.96%
Net income 113129000 142867000 -20.82%
Net income available to common
shareholders 113129000 142867000 -20.82%
Earnings per share
Basic 0.14 0.17 -17.65%
Diluted 0.14 0.17 -17.65%
Weighted average shares outstanding
Basic 828036000 828036000 0.00%
Diluted 828036000 828036000 0.00%
EBITDA 125563000 150447000 -16.54%
METRO HOLDINGS LTD (M01) CashFlowFlag BALANCE
SHEET
Fiscal year ends in March. 2016-03 2015-03 Changes
Assets
Current assets
Cash
Cash and cash equivalents 493606000 356621000 38.41%
Short-term investments 33919000 49863000 -31.98%
Total cash 527525000 406484000 29.78%
Inventories 19296000 26978000 -28.48%
Prepaid expenses 721000 1225000 -41.14%
Other current assets 10759000 121462000 -91.14%
Total current assets 558301000 556149000 0.39%
Non-current assets

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Property, plant and equipment
Land
Fixtures and equipment 33229000 41352000 -19.64%
Other properties
Property and equipment, at cost 33229000 41352000 -19.64%
Accumulated Depreciation -28357000 -35269000 -19.60%
Property, plant and equipment, net 4872000 6083000 -19.91%
Deferred income taxes
Other long-term assets 970354000 1079291000 -10.09%
Total non-current assets 975226000 1085374000 -10.15%
Total assets 1533527000 1641523000 -6.58%
Liabilities and stockholders' equity
Liabilities
Current liabilities
Short-term debt 23860000 -100.00%
Accounts payable
Taxes payable
Other current liabilities 126546000 175541000 -27.91%
Total current liabilities 126546000 199401000 -36.54%
Non-current liabilities
Long-term debt 35578000 -100.00%
Deferred taxes liabilities 15479000 13820000 12.00%
Deferred revenues 12010000
Minority interest 3845000 3350000 14.78%
Other long-term liabilities 15407000 -100.00%
Total non-current liabilities 31334000 68155000 -54.03%
Total liabilities 157880000 267556000 -40.99%
Stockholders' equity
Common stock 169717000 169717000 0.00%
Treasury stock -1768000 -1768000 0.00%
Accumulated other comprehensive
income 1207698000 1206018000 0.14%
Total stockholders' equity 1375647000 1373967000 0.12%
Total liabilities and stockholders' equity 1533527000 1641523000 -6.58%
METRO HOLDINGS LTD (M01) Statement of CASH FLOW
Fiscal year ends in March. SGD. 2016-03 2015-03
Cash Flows From Operating Activities