Dividend per Share (DPS)

Formula

Dividend per Share (DPS) = Total Ordinary Dividends Paid / Number of Ordinary Shares Outstanding

Where:

Total Ordinary Dividends = Cash dividends declared for ordinary shareholders

Ordinary Shares Outstanding = Number of ordinary shares entitled to dividends

Preference dividends are excluded because DPS focuses only on ordinary shareholders.

Explanation

Dividend per Share measures the cash dividend received by each ordinary share.

It shows how much profit is distributed to shareholders rather than retained in the business.

A higher DPS indicates:

• Strong cash position
• Shareholder-friendly dividend policy
• Stable earnings

A lower or zero DPS may indicate:

• Profits are retained for expansion
• Cash flow constraints
• Losses or conservative dividend policy

Satisfactory Level

There is no fixed “ideal” DPS. A satisfactory DPS:

• Is consistent or growing over time
• Is supported by earnings and cash flows
• Matches the company’s dividend policy and growth strategy

Investors often prefer stable dividends rather than high but irregular dividends.

Industry Norms (General Guidance)

DPS varies significantly by industry and company maturity.

Industry	Typical DPS Pattern
Utilities	High and stable DPS
Banking & Finance	Moderate, consistent DPS
Manufacturing	Moderate DPS
Technology	Low or no DPS
Start-ups / Growth firms	Usually no DPS

⚠️ DPS should always be analysed together with EPS and Dividend Payout Ratio.

Example

Modern More Berhad

• Total Ordinary Dividends Paid: RM200,000
• Ordinary Shares Outstanding: 1,000,000 shares

Step: Calculate DPS

DPS = 200,000 / 1,000,000 = RM0.20

Interpretation:

Each ordinary shareholder receives 20 sen per share as dividend for the year.

Summary

• DPS measures actual cash return to shareholders
• A company can have high EPS but low DPS (retained earnings)

Always assess DPS with:

• EPS
• Dividend Payout Ratio
• Cash flow from operations

Earnings per Share (EPS)

Formula

Earnings per Share (EPS)

=Net Profit After Tax − Preference Dividends / Weighted Average Number of Ordinary Shares

​

Where:

Net Profit After Tax (NPAT) = Profit attributable to the company after tax

Preference Dividends = Deducted because EPS focuses on ordinary shareholders

Weighted Average Number of Ordinary Shares = Adjusted for shares issued or bought back during the year or Number of shares outstanding

Explanation

Earnings per Share measures the profit earned for each ordinary share.

It shows how much profit is available to ordinary shareholders on a per-share basis and is one of the most widely used indicators of company performance.

A higher EPS generally indicates:

• Strong profitability
• Better returns to shareholders
• Higher potential for dividends and share price growth

A lower or declining EPS may indicate:

• Falling profits
• Dilution from new share issues
• Poor operating performance

EPS is commonly used together with Price–Earnings (P/E) Ratio to evaluate shares.

Satisfactory Level

There is no fixed “good” EPS value because EPS depends on:

• Company size
• Number of shares issued
• Industry characteristics

EPS is considered satisfactory when it:

• Is positive and growing over time
• Is higher than competitors in the same industry
• Supports stable or increasing dividends

Trend analysis is more important than a single year’s EPS.

Industry Norms (General Guidance)

EPS values vary widely and are not directly comparable across industries.

Industry	Typical EPS Trend
Manufacturing	Moderate, stable growth
Retail	Lower EPS but consistent
Banking & Finance	Stable and predictable
Technology	High growth, volatile
Utilities	Lower but steady EPS

⚠️ Always compare EPS within the same industry and company size.

Example

Modern More Berhad

Net Profit After Tax: RM500,000

Preference Dividends: RM50,000

Ordinary Shares Outstanding: 1,000,000 shares

Step 1: Profit attributable to ordinary shareholders

500,000−50,000=RM450,000

Step 2: Calculate EPS

EPS= 450,000 / 1,000,000 = RM0.45

Interpretation:

The company earns 45 sen per ordinary share, meaning each share is entitled to RM0.45 of profit for the year.

Summary

• EPS focuses on ordinary shareholders only
• Always deduct preference dividends
• Use weighted average shares if shares change during the year
• EPS alone is not enough—combine with P/E, ROE, and dividend ratios

Jury Duty 2026 - Permohonan

The DC ADEP LERS

In accounting, DC ADEP LERS is a handy memory aid students use to remember which accounts normally have Debit balances and which have Credit balances. It’s especially useful when teaching journal entries and double-entry bookkeeping.

DC ADEP LERS — What it means

DC

D – Debit

C – Credit

ADEP → Normal DEBIT balance

A – Assets

D – Drawings

E – Expenses

P – Purchases

These accounts increase with a Debit and decrease with a Credit.

LERS → Normal CREDIT balance

L – Liabilities

E – Equity / Capital

R – Revenue

S – Sales

These accounts increase with a Credit and decrease with a Debit.

Simple logic (how to explain to students)

Things the business OWNS or SPENDS → Debit

Assets, Expenses, Purchases, Drawings

Things the business OWES or EARNS → Credit

Liabilities, Capital, Revenue, Sales

Form of business entities and different reporting requirements

Accounting equation

Elements of Financial Statements

Asset

1. Assets are the economic resources used to run the business without intention to resell, in which, the future economic benefits are expected to flow into the business.
2. Assets are presented in the statement of financial position.

Non-current assets:

Assets that are used to run the business without intention to resell is a noncurrent asset. These assets have useful life for more than one year.

Example; land, building, office equipment.

2 types of Non-current assets:

Tangible assets include both non-current assets and current assets. They refer to assets which have a physical existence. 

Example: ovens, mixers, refrigerators, inventory 

Intangible assets refer to assets that are not physical in nature. These assets have value to the organization as they could generate a competitive advantage to the business. 

Example: trademark, copyright, patent, goodwill

Current assets:

Assets that are used with the intention to resell and the assets that are expected to realize or used within 12 months after the reporting period such as closing inventory and prepaid expenses.

Liability

Liabilities are the obligations of an entity to other entities/ External parties’ claim to the business assets/ Amounts owed by a business to outside parties.

Example; creditors, long-term  loan, etc

Equity

Owner supplied fund to the business for acquisition of assets for the business.

Revenue

Revenue Revenues are income generated by the business from the course of ordinary activities, which are the trading or normal operating activities. 

Example; rental income, interest income,etc

Expense

1. Expenses are costs incurred when it decreases the economic benefits in the form of outflow or depletion in value.
2. Expenses are reported in the statement of profit or loss.

Expenses: Purchase (comp hardware and software) and Utilities expenses.

Components of Financial Statements

According to accounting standards, a complete set of financial statements consists of the following components:

1. Statement of Financial Position (Balance Sheet)

• Shows the assets, liabilities, and equity of the business at a specific date.
• Helps users assess financial stability and solvency.

2. Statement of Profit or Loss and Other Comprehensive Income

• Reports revenues, expenses, profit or loss, and other comprehensive income for a period.
• Indicates the company’s financial performance.

3. Statement of Changes in Equity

• Explains changes in owners’ equity, such as profits, dividends, and capital contributions.
• Shows how equity increases or decreases during the period.

4. Statement of Cash Flows

• Provides information on cash inflows and outflows from:
• Operating activities
• Investing activities
• Financing activities
• Helps assess liquidity and cash management.

5. Notes to the Financial Statements

• Provide additional explanations, accounting policies, and detailed breakdowns of figures.
• Enhance users’ understanding of the numbers presented.

Users of financial statements

Internal users

Internal users refer to the members of a company's management and other individuals who use financial information in running and managing the business. 

External users

External users are entities or individuals who do not participate in running or managing the business but are interested in the financial information of the company. Unlike internal users, they do not make decisions for the business

Objective of financial statements

The main objective of financial statements is to provide useful financial information about an entity to help users make economic decisions.

Financial statements aim to:

1. Provide information on financial position

Show what the company owns (assets), owes (liabilities), and the owners’ interest (equity) at a specific date.

2. Provide information on financial performance

Explain how well the company has performed over a period through profit or loss (revenues and expenses).

3. Provide information on cash flows

Show how cash is generated and used from operating, investing, and financing activities.

4. Assist users in decision-making

Help investors, lenders, and creditors decide whether to invest, lend, or continue supporting the business.

5. Assess management stewardship

Enable users to evaluate how effectively management has used the entity’s resources.

6. Predict future performance and cash flows

Past financial results help users forecast future profitability and liquidity.

Reporting of accounting information (format, time horizon, report timing and Regulatory requirements)

Function of Financial Statements

Financial statements serve several important functions for various stakeholders, including business owners, investors, creditors, regulators, and analysts. These functions include:

1. Financial Performance Evaluation: Financial statements, especially the income statement, provide a summary of a company's financial performance over a specific period. This helps stakeholders assess whether the business is generating profits and how efficiently it is managing its expenses.

2. Financial Position Analysis: The balance sheet presents the financial position of a company at a specific point in time, showing its assets, liabilities, and shareholders' equity. This helps stakeholders understand the company's overall financial health and its ability to meet its obligations.

3. Cash Flow Assessment: The statement of cash flows details the sources and uses of cash during a specific period. It enables stakeholders to evaluate a company's cash generation and cash management, which is crucial for its liquidity and solvency.

4. Investment Decision-Making: Investors use financial statements to assess the financial health and potential profitability of a company before making investment decisions. They may also compare financial statements to evaluate different investment options.

5. Creditworthiness Evaluation: Creditors, such as banks and suppliers, use financial statements to determine a company's creditworthiness. They assess the ability of the business to meet its debt obligations, which influences credit terms and interest rates.

6. Budgeting and Forecasting: Businesses use historical financial statements as a basis for creating budgets and forecasts. These statements help management set financial goals, allocate resources, and track progress toward achieving those goals.

7. Performance Benchmarking: Financial statements allow for comparisons of a company's financial performance with industry peers and competitors. This benchmarking helps identify areas where a company may need to improve its financial performance.

8. Regulatory Compliance: Publicly traded companies must prepare and report financial statements in compliance with accounting standards and regulatory requirements, such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS).

9. Tax Reporting: Financial statements are used to calculate taxable income and report it to tax authorities. They serve as the basis for determining income tax liabilities for businesses.

10. Disclosure and Transparency: Financial statements promote transparency and accountability by providing a clear and standardized way to report a company's financial information. This helps build trust with investors and other stakeholders.

11. Due Diligence: Before mergers, acquisitions, or business transactions, financial statements play a crucial role in the due diligence process. They provide insight into the target company's financial health and risks.

12. Strategic Planning: Financial statements assist businesses in strategic planning. By analyzing past financial performance, companies can make informed decisions regarding growth, investment, and cost management.

13. Economic Analysis: Financial statements contribute to economic analysis at both the micro and macro levels. Economists and policymakers may use aggregate financial data to assess the overall health of an economy.

In summary, financial statements are essential tools that provide valuable information to a wide range of stakeholders. They serve as a foundation for decision-making, financial analysis, and the evaluation of a company's financial health and performance.

Cost Accounting vs Financial Accounting

Financial accounting

1. A discipline of accounting that mainly deals with the keeping of accounting records to enable the preparation of accounting reports
2. Accounting records are maintained based on specifically designed guidelines or rules 
3. the field of accountancy concerned with the preparation of financial statements for decision makers, such as stockholders, suppliers, banks, government agencies, owners, and other stakeholders. 
4. Cost ascertainment cost control
5. Deals with quantitative/monetary items

Costs accounting

1. the process of tracking, recording and analyzing costs associated with the products or activities of an organization. 
2. To provide useful information to management for future decision
3. Deals with both quantitative and qualitative items

Differentiate between accounting and bookkeeping

Accounting is the process of identifying, measuring and communicating economic information about an entity to permit informed judgements and decisions by users of financial statement of the information.

Bookkeeping is different from accounting.  Bookkeeping is only a part of accounting.   It is the mechanical aspects of accounting such as classifying, recording and summarising transactions systematically. The needs of recording transactions systematically give rise to double entry system.

What AI says?

Accounting and bookkeeping are related but distinct functions within the financial management of a business. They serve different purposes and involve different levels of complexity. Here are the key differences between accounting and bookkeeping:

1. Definition:

   - Bookkeeping: Bookkeeping is the process of systematically recording financial transactions and maintaining financial records, including day-to-day activities such as sales, purchases, payments, and receipts. It focuses on the accurate and detailed recording of financial data.

   - Accounting: Accounting is a broader field that encompasses not only the recording of financial transactions but also the analysis, interpretation, summarization, and reporting of financial information. It involves the use of financial data to make informed business decisions and prepare financial statements.

2. Scope:

   - Bookkeeping: Bookkeeping primarily involves the recording of transactions and the organization of financial data. It is the foundation upon which accounting is built.

   - Accounting: Accounting extends beyond bookkeeping by using the data recorded in the books to create financial statements, analyze financial performance, and provide insights for managerial decision-making.

3. Objectives:

   - Bookkeeping: The primary objective of bookkeeping is to maintain a systematic and accurate record of financial transactions, ensuring that financial data is organized and ready for further analysis.

   - Accounting: Accounting aims to provide a broader understanding of an organization's financial health. It involves analyzing financial data, preparing financial statements (such as the income statement and balance sheet), and interpreting the results to support business decisions.

4. Level of Detail:

   - Bookkeeping: Bookkeeping is more concerned with the specific details of financial transactions, including recording debits and credits, categorizing expenses, and maintaining ledgers.

   - Accounting: Accounting focuses on summarizing and interpreting financial data to provide a more comprehensive view of the organization's financial position. This involves activities like financial analysis, budgeting, forecasting, and auditing.

5. Regulatory Requirements:

   - Bookkeeping: While accurate bookkeeping is essential for maintaining financial records, it may not always be subject to the same level of regulatory oversight as accounting.

   - Accounting: Accounting often involves compliance with specific accounting standards and regulations, such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS), to ensure that financial statements are prepared in accordance with established rules.

6. Decision-Making:

   - Bookkeeping: Bookkeeping provides the foundational data required for accounting and financial decision-making but does not directly contribute to the analysis of financial information.

   - Accounting: Accounting plays a crucial role in helping management make informed financial decisions by providing insights into the organization's financial performance, profitability, and potential risks.

In summary, bookkeeping is the process of recording financial transactions and maintaining records, while accounting involves a more comprehensive analysis of financial data to support decision-making and financial reporting. Bookkeeping serves as the foundation for accounting and is an essential component of financial management within an organization.

Four stages of accounting

Classifying

sorting out accounting data into orderly and meaningful categories. Example:  receipts, payment, purchases, sales etc.

Recording

transactions are recorded in the books of the business. Example: journals and ledgers

Summarising

periodically accounting data are summarised in the form of financial statement. Example: Trading and Profit and Loss Account and Balance Sheet.

Interpreting

the financial statements are analysed and the result of the analysis is used as a guide to make decisions.

Definition of Accounting

Accounting is defined as the art of classifying, recording and summarising of transactions and business events in monetary terms and interpreting the results to interested parties to enable them to make decision.

The objectives of financial statement is to know the financial status of the organization, whether the business is making profit or running at loss, and what corrective action to be taken.

Accounting is important to the business because it assist management in carrying out its functions of planning controlling and decision making by using accounting techniques such as marginal costing budgetary controls and standard costing   

The purpose of recording and analysing an accounting information of a business are as follows:

1. The user need to know the financial position of the business. They want to know how business is doing, whether the business is making profits or loss out of its business activities. If the business is making profits, decisions such as expansion, profits sharing, or savings can be made. It the business is running at loss, mitigating actions should be made in order to recover from loss or minimising the loss.
2. Accounting information can act as an evidence to any business transaction in justifying any financial actions. For example, to collect debts owe by the customer, the business need to provide aging statement or, list of invoices.

Statements of Financial Position (SOFP)

Statements of Profit or Loss (SOPL)

 

Qualitative Characteristics of Financial Statements

2R, 2C, MUTV

1. Relevant
2. Reliable
3. Comparable
4. Consistent
5. Materiality
6. Understandable
7. Timely
8. Verifiability

Going concern

Going concern

• Going concern refers to the assumption that the company will continue its business for the foreseeable future (normally at least 12 months from the reporting date)
• Concept assumes that the business will have a long life, that it will last long enough to fulfill their objectives and commitments.

Why the Going Concern Assumption Matters

The going concern assumption affects:

• Asset valuation (recorded at cost, not liquidation value)
• Liability classification (long-term vs short-term)
• Depreciation & amortisation
• Users’ confidence in financial statements

Without going concern, financial statements would be prepared on a break-up or liquidation basis, which changes almost everything.

Responsibility

Management - Assess whether the company is a going concern

Auditor - Evaluate management’s assessment and conclude whether GC is appropriate

Indicators of Going Concern Problems

These are red flags, not automatic failure.

(a) Financial Indicators

• Recurring operating losses
• Negative cash flows
• Net liabilities / negative equity
• Inability to pay debts when due
• Breach of loan covenants

(b) Operational Indicators

• Loss of key customers or suppliers
• Major labour problems
• Obsolete technology
• Inability to obtain financing

(c) Other Indicators

• Legal claims threatening survival
• Changes in law affecting operations
• Natural disasters with no insurance

Management’s Assessment

Management must:

Look forward at least 12 months

• Consider cash flow forecasts
• Consider financing arrangements
• Assess mitigating plans (e.g. new funding, cost cuts)

Role of the Auditor

The auditor must:

• Evaluate management’s GC assessment
• Look for material uncertainty
• Decide the impact on the audit report

Disclosure Requirements

If material uncertainty exists, financial statements must disclose:

• Conditions causing uncertainty
• Management’s plans to address them
• Statement that GC depends on successful mitigation
• Failure to disclose → modified audit opinion

Underlying Assumptions on Preparation of Financial Statements

GD PEACH 3M

1. Going concern
2. Duality
3. Prudence (Conservatism)
4. Entity
5. Accruals
6. Consistency
7. Historical Cost
8. Materiality 
9. Money Measurement
10. Matching

Introduction to Financial Statements

1. Definition of Accounting
2. Four stages of accounting
3. Differentiate between accounting and bookkeeping
4. Cost Accounting vs Financial Accounting
5. Reporting of accounting information 
6. Function of Financial Statements
7. Objective of financial statements
8. Users of financial statements
9. Components of Financial Statements
10. Elements of Financial Statements
11. Accounting equation
12. The DC ADEP LERS
13. Form of business entities and different reporting requirements
14. Underlying Assumptions on Preparation of Financial Statements
15. Qualitative Characteristics of Financial Statements
16. Statements of Profit or Loss (SOPL)
17. Statements of Financial Position (SOFP)

Comparison between the Debt-to-Equity Ratio and the Debt Ratio

Comparison: Debt-to-Equity Ratio vs Debt Ratio

Aspect	Debt-to-Equity Ratio (D/E)	Debt Ratio
Formula	Total Debt ÷ Shareholders’ Equity	Total Debt ÷ Total Assets
Main Focus	Debt compared with owners’ funds	Debt compared with total assets
What it measures	Capital structure and financial leverage	Overall solvency of the company
Perspective	Risk to shareholders	Risk to creditors and investors
High ratio means	Heavy reliance on debt financing	Large portion of assets financed by debt
Low ratio means	Conservative financing	Lower financial risk
Common users	Equity investors, management	Banks, lenders, analysts
Link to risk	High D/E increases shareholder risk	High debt ratio increases solvency risk

Explanation

Debt-to-Equity Ratio

This ratio answers the question:

• “For every RM1 of shareholders’ funds, how much debt is used?”
• Focuses on who finances the company
• High D/E = higher financial leverage
• Can increase ROE, but also increases risk to shareholders

Debt Ratio

This ratio answers the question:

• “What percentage of the company’s assets is financed by debt?”
• Focuses on overall financial stability
• Debt ratio above 50% means more than half of assets are financed by debt
• Widely used by banks and creditors

Example 

Company Information

• Total Debt = RM600,000
• Shareholders’ Equity = RM400,000
• Total Assets = RM1,000,000

Debt-to-Equity Ratio = 600,000÷400,000=1.5

Interpretation:

The company uses RM1.50 of debt for every RM1 of equity, indicating moderate to high leverage.

Debt Ratio = 600,000÷1,000,000=0.6 or 60%

Interpretation:

60% of the company’s assets are financed by debt, showing relatively high solvency risk.

Summary

• Debt-to-Equity Ratio → compares debt vs owners’ funds
• Debt Ratio → compares debt vs total assets

Always:

• State the formula
• Explain financial risk
• Compare with industry norms

Debt-to-Equity ratio

Formula

Debt-to-Equity Ratio = Total liabilities / Total Shareholders’ Equity

Where:

Total liabilities = Non-current liabilities + current liabilities

Shareholders’ Equity = Share capital + Reserves (retained earnings, etc.)

 Explanation

The Debt-to-Equity ratio measures a company’s financial leverage—how much of the business is financed by debt compared to owners’ funds.

• A higher D/E indicates greater reliance on borrowing (higher financial risk).
• A lower D/E suggests more conservative financing and lower risk to creditors.

This ratio helps assess:

• Capital structure
• Long-term solvency
• Risk faced by shareholders and lenders

Satisfactory Level

There is no universal ideal level. A satisfactory D/E ratio:

• Matches the industry norm
• Is stable over time
• Is manageable given the company’s cash flows

General guideline:

• < 1.0 → conservative, low risk
• 1.0 – 2.0 → acceptable for many industries
• > 2.0 → high gearing; higher financial risk

Industry Norms (Approximate)

Industry	Typical D/E
Manufacturing	0.5 – 1.5
Retail	1.0 – 2.0
Construction	1.5 – 3.0
Utilities	1.5 – 2.5
Technology	0.2 – 0.8
Banking & Finance	Very high (special case)

⚠️ Capital-intensive industries usually tolerate higher D/E ratios.

Example

Modern More Sdn. Bhd.

• Total Debt: RM600,000
• Total Shareholders’ Equity: RM400,000

Step: Calculate Debt-to-Equity Ratio

D/E = 600,000 / 400,000 = 1.5

Interpretation:

The company uses RM1.50 of debt for every RM1 of equity.

This indicates moderate gearing—acceptable for many manufacturing firms, but it increases financial risk if profits decline.

Summary

• Measures financial risk and leverage, not profitability
• High D/E can boost ROE, but also increases risk

Always interpret together with:

• Interest coverage ratio
• Cash flow position
• Industry benchmarks

Return on Ordinary Shareholders’ Equity (ROE)

Formula

ROE=(Net Profit After Tax−Preference Dividends)/Avg Ordinary Shareholders’ Equity ×100%

Where:

Ordinary Shareholders’ Equity = Ordinary share capital + Reserves

Average Equity = (Opening equity + Closing equity) ÷ 2

If there are no preference shares, 

ROE = Net Profit After Tax ÷ Ordinary Shareholders’ Equity

Explanation

Return on Ordinary Shareholders’ Equity measures how efficiently a company uses shareholders’ funds to generate profits.

It indicates the rate of return earned by ordinary shareholders on their investment in the company.

A higher ROE suggests:

• Effective use of shareholders’ capital
• Strong management performance
• Attractive returns to investors

A lower ROE may indicate:

• Poor profitability
• Inefficient use of equity
• Excess idle capital

Satisfactory Level

There is no fixed “ideal” ROE, but a satisfactory ROE:

• Is consistently higher than the cost of equity
• Is stable or improving over time
• Compares favourably with competitors

General guideline:

• 15% – 20% → good
• >20% → very strong
• <10% → weak / may concern investors

Industry Norms (Approximate)

Industry	Typical ROE

Manufacturing

12% – 20%

Retail

15% – 25%

Banking & Finance

10% – 15%

Technology

20% – 35%

Utilities

8% – 12%

⚠️ ROE can be inflated by high debt levels, so it should be analysed together with gearing ratios.

Example

• Modern More Sdn. Bhd.
• Net Profit After Tax: RM120,000
• Preference Dividends: RM20,000
• Ordinary Shareholders’ Equity (Opening): RM800,000
• Ordinary Shareholders’ Equity (Closing): RM900,000

Step 1: Calculate Profit attributable to ordinary shareholders

ROE=(Net Profit After Tax−Preference Dividends)/Avg Ordinary Shareholders’ Equity ×100%

Net Profit After Tax−Preference Dividends

120,000−20,000 = RM100,000

Step 2: Calculate Average Ordinary Equity

Avg Ordinary Shareholders’ Equity

(800,000+900,000) ÷ 2 = RM850,000

Step 3: Calculate ROE

ROE = 100,000 / 850,000 × 100% = 11.76%

Interpretation

The company generates approximately 11.8% return on ordinary shareholders’ funds, which is acceptable but could be improved compared to industry benchmarks.

Summary

• ROE focuses on shareholders’ perspective, not total assets
• Always use average equity for better accuracy
• High ROE caused by excessive borrowing may be risky

Net Profit Margin

Formula

Net Profit Margin = (Net Profit / Net Sales) × 100%

Where:

Net Profit = Profit after all expenses (COGS, operating expenses, interest, and tax)

Net Sales = Sales − Sales Returns/Discounts

Explanation

Net Profit Margin measures the overall profitability of a company.

It shows the percentage of sales revenue that remains as net profit after all costs and expenses have been paid.

NPM reflects how well management controls:

Production costs

Operating expenses

Financing costs

Tax obligations

A higher NPM indicates:

Strong cost management

Efficient operations

Better financial health

A lower NPM suggests:

High operating or financing costs

Weak pricing strategy

Inefficient cost control

Satisfactory Level

There is no universal “ideal” NPM. A margin is considered satisfactory when it:

• Is stable or improving over time
• Is reasonable compared to industry competitors
• Is sufficient to reward shareholders

General guideline:

• >10% → generally strong
• 5% – 10% → acceptable / average
• <5% → may indicate financial pressure

Industry Norms (Approximate)

Industry	Typical NPM
Manufacturing	5% – 10%
Retail	2% – 6%
Food & Beverage	5% – 15%
Technology / Software	15% – 30%
Construction	2% – 8%

⚠️ NPM varies widely; always compare within the same industry.

Example

Modern More Sdn. Bhd.

• Net Sales: RM500,000
• Net Profit after tax: RM40,000

Step: Calculate Net Profit Margin

NPM = (40,000 / 500,000) × 100% = 8%

Interpretation:

The company earns 8 sen net profit for every RM1 of sales, which is acceptable for a manufacturing company.

Summary

• NPM considers all expenses, unlike Gross Profit Margin
• Sensitive to interest and tax changes
• Useful for assessing overall efficiency and sustainability

Gross Profit Margin

Formula

Gross Profit Margin = (Gross Profit / Net Sales)​ × 100%

Where:

Gross Profit = Net Sales − Cost of Goods Sold (COGS)

Net Sales = Sales − Sales Returns/Discounts

Explanation

Gross Profit Margin measures how efficiently a company produces or purchases its goods and sells them at a profit.

It shows the percentage of sales revenue left after covering direct production costs (materials, direct labour, and manufacturing overheads).

A higher GPM indicates:

• Better cost control
• Strong pricing power
• Higher profitability at the core business level

A lower GPM may indicate:

• Rising production costs
• Poor pricing strategy
• Intense competition

Satisfactory Level

There is no single “perfect” GPM

A margin is considered satisfactory when it:

• Is consistent over time
• Is comparable or better than industry average
• Covers operating expenses and contributes to net profit

General guideline:

• >30% → usually considered good for many industries
• <20% → may raise concerns unless industry norm is low

Industry Norms (Approximate)

Industry	Typical GPM
Manufacturing	20% – 40%
Retail	15% – 35%
Food & Beverage	30% – 60%
Technology / Software	60% – 80%
Construction	10% – 20%

Example

Modern More Sdn. Bhd.

• Net Sales: RM500,000
• Cost of Goods Sold: RM350,000

Step 1: Calculate Gross Profit

Gross Profit = 500,000 − 350,000 = RM150,000

Step 2: Calculate Gross Profit Margin

GPM = (150,000 / 500,000) × 100% = 30%

Interpretation:

The company earns 30 sen gross profit for every RM1 of sales, which is generally satisfactory for a manufacturing firm.

Summary

• GPM focuses on core operations only
• It does not include operating or financing costs
• Always compare across years and with industry averages

ACC466 - Carry marks (AS2473B)

ACC466 - Carry marks (AS2473A)

What Makes a Good Student (from my POV)

• Takes ownership of learning (doesn’t wait to be chased) and obviously not waiting to be spoonfeed.
• Comes to class on time, prepared, and mentally present
• Reads early topics and previews before class
• Follows instructions and rubrics carefully
• Asks questions when unclear (not afraid to clarify basics). Not for no marks but for own understanding 
• Listens actively; takes useful notes
• Try your utmost best to be different and always persevere to bounce back from any shortcomings
• Able to accept feedback and positive comments. Not too defensive but also able to defend your own thinking and judgement.
• Does consistent practice and revision (not last-minute studying)
• Submits work on time and with proper effort (not “asal siap”)
• Accepts feedback professionally and improves (coachable)
• Communicates early if facing problems (doesn’t disappear)
• Shows integrity (no plagiarism, no shortcuts)
• Works well in groups: contributes, reliable, respectful
• Manages time well across subjects and commitments
• Stays resilient and keeps trying even when results are not yet strong
• Maintains good attitude: polite, humble, growth-minded
• Not the smartest but, beradab (to lecturers and colleagues) and always try to be better
• ALWAYS REFER TO MY BLOG for UPDATES!!!

Apa lecturer buat bila pelajar balik cuti mid semester?

Bila pelajar balik cuti mid-semester, pensyarah biasanya guna ruang singkat itu untuk “reset” dan kemaskan perjalanan kursus. Hakikatnya, semester masih berjalan dan banyak benda perlu terus bergerak.

• Marking & maklum balas cepat: semak kuiz/ujian 1/tugasan awal, bagi feedback, kemas kini markah dalam sistem, dan kenal pasti pelajar yang mula ketinggalan. Yang penting dengan tenang tanpa gangguan!
• Semak progres kursus: tengok sama ada topik ikut perancangan, semak keberkesanan PdP setakat ini, dan buat pelarasan (contoh: tambah latihan, ubah strategi tutorial).
• Sedia bahan untuk separuh semester seterusnya: siapkan slide/nota, tutorial, set soalan latihan, kes/mini projek, dan bahan e-learning (LMS, video ringkas, kuiz).
• Rancang penilaian seterusnya: finalize tarikh dan format ujian 2/pembentangan/assignment besar, semak rubrik yang telah ditetapkan, dan susun jadual konsultasi.
• Hubungi pelajar yang perlukan intervensi: sesi konsultasi, bimbingan akademik, atau follow-up isu kehadiran/prestasi.
• Kerja pentadbiran berkaitan kelas: urusan jadual/gantian kelas, dokumentasi OBE (jika perlu).
• Penyelidikan & penyeliaan (slot kecil): semak draf pelajar penyelidikan, kemas kini data/analisis, biasanya dalam skala lebih ringan.
• Mesyuarat bersama pelajar2 Phd dan collaborator antarabangsa
• Follow up dengan pemain industri untuk projek 2026. Insha Allah, Grant Industri, Kajian, penulisan dan pertandingan inovasi
• Rehat & “recharge”: ramai pensyarah juga ambil 1–2 hari untuk pulih tenaga supaya momentum mengajar lepas cuti lebih baik.
• Untuk aku, cuti ini adalah untuk rawatan dan check up yang telah dijadualkan. 3 hari berkampung di Kuantan.

Hall of Fame

HGD344 - Hall of Fame

Sem 20254

Degree

Gaya Hidup Mewah Hati Tak Tenang - Amar

PSA Lifestyle Luar Biasa, Gaji Biasa, Red Flag Rasuah di Pejabat - Peony's

Rasuah bukan Jalan Mudah - The Achievers

Rasuah Dalam Peperiksaan dan Akademik - Sunrise

Whistleblower Berani: Satu Suara Melawan Rasuah - Apple

Diploma

Bayang-Bayang di Balik Meja - Hujan

Ciri-Ciri Orang yang Terlibat Dengan Rasuah - The Navigator

Hilangnya Integriti di Universiti - Gerimis

Nepotisme & Kronisme Membunuh Peluang Orang Lain - GTR

Rasuah di Universiti - Integrity vibes only

Week 12 - Audit of Property Plants & Equipment and Audit of Cash & Audit of Long-Term Liabilities, Shareholders’ equities & Income Statement

Week 12 - Audit of Property Plants & Equipment 

Lecture Notes 1 - Click here

Self Test - | ST1 | ST2 | ST3 |

Additional materials

Property, plant and equipment |Notes|Audio|Video AM|

Week 12 - Audit of Cash & Audit of Long-Term Liabilities, Shareholders’ equities & Income Statement

Lecture Notes Pn Lily's Notes - Click here

Lecture Notes 2 - Click here

Self Test - | ST1 | ST2 | ST3 |

Additional materials

Cash|Notes 1|Notes 2|Video AM|

Audit of Statements of Financial Position and Comprehensive Income - Video Sir Syed

Test of Control vs Substantive Test - Student's response