Padini

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Executive Summary Our research on Padini Holdings Berhad reveals its overall position and history in the retail industry since 1971 as well as its vision and mission established to the accomplishment of their corporate goals. On top of that, the financial and strategic objectives set by the management to meet its goals are also outlined in the body of the report. Through the analysis of the financial statements, the liquidity position of the group can be gauged by using a number of measures like the trade receivables and payables period, current and quick ratio, and also its working capital cycle. Collectively, these measures indicate that the group is relatively liquid in nature. Besides, an analysis of the capital structure of…show more content…
Improvement in its management setting and product innovation is continuously done so as to remain as the top fashion company. High quality products along with high standard of designs are maintained by Padini through the payment of lump sum bonus as a motivation to employees if targeted sales were achieved. B) Working Capital / Liquidity Position of the Company Through the analysis, we can see that the trade receivables days increase steadily from 9 days in 2009 to 13 days in 2011. As most of Padini’s sales are retailing which made in cash or credit card, the trade receivable days is exceptionally short. [3] Since the increase in the trade receivable days is in line with the increase in sale, it will not result in collection problem and will not impose significant pressure on Padini’s cash flow. The increase in payables period may be a good sign as it shows that suppliers have confidence with its payback ability by granting longer credit period. The group takes the full advantage of credit facilities by using the interest free loan to finance its daily operation and subsequently improve its performance.[4] Padini’s current ratio remains relatively steady over these 3 years and with slight increase in 2011. There is a clear indication that inventory made up

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