Download - Johnson Betul Pnye
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PREPARED BY :MOHD RADZUAN B ABDUL GANI 2009397809MOHD KHAIRUL AZUAN BIN TALIB 2009910797SITI NUR KHALIDA BT MD KHAIRUDIN 2009384695WAN IZZATI BT WAN AHMAD 2009578111WAN MOHD HAFIDZ B WAN HAMIDNUDIN 2009553387
MAF 680CASE 3 :
JOHNSON TURNAROUND
1.Salaries for finance &
accounting are too high
2.Excessive spending on
advertisement & promotional
expenses
3.Account receivables
overdue
4.Poor asset management
5.Some of company retail
outlets persistently
incurring losses
ISSUES
2
6.The company did not invest in
Research & Development(R&
D)
7.Mismanagement of Inventory
8.Many diversified
product9.Opportunities
10.Provision of bad debt 0f 2%
from salesISSUES
33
• Salary reduction
Short-term
• Key Performance Indicators(KPI)- Evaluate performance of each department.
Long-term
1)Salaries for workers are too high
RECOMMENDATIONS
44
2)Excessive spending on advertisement & promotional expenses
Short-term• Internal auditor check in
detailed of advertisement & promotional expenses.
• - If the findings is misappropriation of funds, the IA should inform parent company to take further action.
• - If findings is ineffective allocation of funds, the IA should send reminder letter & the CEO need to discuss with Director of Sales & Marketing.
Long-term• Prepared fixed budget for
advertisement & promotional costs every year.
• - From total sales, the company should allocate 3% for advertisement & promotional expenses.
• Impose effective advertisement (facebook/ blog)
• Introduce a new scheme : “now everyone can sales”)
Recommendations
55
Short-term• Send frequent
(monthly) reminder to debtors
• Negotiate-reschedule the debtor payment
• Debt collection agencies need to collect the overdue account receivables.
Long-term
• Tighten the account receivables policies.
• -Screening procedure(sufficient bank guarantee)
• Aging system• Factoring system
3)Account Receivables OverdueRECOMMENDATIONS
66
4)Poor Asset Management
Short-term• Rent the empty factories to
other party• Dispose and sell unused asset
Long-term• Establish asset management
team to form physical asset management cycle.
77
Short-term
• Close & sold the outlets to other parties
• Rent the outlet to other subsidiaries.
5) Some ofcompany retailoutlets persistently incurringlosses
RECOMMENDATIONS
88
6.The company did not invest in Research and Development(R&D)
9
Set up company’s R&D Department-Product innovation eg. Such as produce noodles in varieties of flavor
LONG TERM STRATEGY
9
7.MISMANAGEMENT OF INVENTORY
10
Short term
•Dispose obsolete raw material
•Sold the inventory at lower price to interested party.
Long
term
•Implement Material Requirement Planning (MRP) by comparing production needs with available balances of inventory.
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8.MANY DIVERSIFIED PRODUCTS
11
SHORT TERM• Focus on producing products that
gives most profitable to the company, eg. Noodles and Bakery.
• Produce other products based on demand.
LONG TERM• Do promotion to increase the sales.
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OPPORTUNITIESExternal chances to
improve performance (e.g. make greater
profits) in the environment
Invest in new market : Malaysia, China &
Dubai
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9.OPPORTUNITIES
12
10.Provision of bad debt
of 2% from sales
2% x (50m/12)=83,333
2% of revenues
2% x (33m/12)=55,000
2% of accounts
receivable
Short-term : Change bad debt policy instead using 2% from sales to 2% from debtors.
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CONCLUSIONIn order to TURNAROUND Johnson Pte. Ltd. (JPL), the
company should implement short term strategies and
followed by long term strategies to prevent the
company from getting worse from year to year.
1414
THANK
YOU