UNIVERSITY KUALA LUMPUR BUSINESS SCHOOL

SEMESTER SEPTEMBER 2022

MANAGEMENT ACCOUNTING (EIB30503)

CLASS : ME10

AJINOMOTO SDN BHD

PREPARED BY :

NAME ID NUMBER

NUR AISHAH BT AHMAD 62212221268

NOR IZZAH ATIRAH BT ISMAIL 62212221266

NUR SYABANIAH BINTI MOHD YASIR 62212121090

NURUL NATASHA BINTI MD ZARI 62215120065

NUR ZAHIRAH BINTI JUHARI 62215121190

PREPARED FOR : MADAM ZARINA

Table of content

NO TOPIC PAGES

1.0 Non Financial Data

1 1.1 Background of the company 1-2

2 1.2 Vision and mission statement 3

3 1.3 Organizational Chart 3

4 1.4 CSR activities 6

2.0 Financial Data

5 2.1 Liquidity ratio 11-12

6 2.2 Profitability ratio 12-14

7 2.3 Turnover ratio 14-16

8 2.4 Solvency ratio 17-19

9 Conclusion 20
1.0 Non Financial Data

1.1 Background of the company

Ajinomoto (Malaysia) Berhad (“the Company”), incorporated fifty seven years ago in
1961 started its business operations as a distributor of monosodium glutamate (“MSG”)
imported from its parent company in Japan under the brand, AJI-NO-MOTO®. The
business registered address is at Lot 5710, Jalan Kuchai Lama, Petaling, 58200 Kuala
Lumpur. In 1965, the Company commenced production of MSG and subsequently other
products at its current factory. The Company is one of the early Japanese companies to
set up in Malaysia. The Company has since established itself as a dynamic food
seasoning manufacturer that is trusted by Malaysians for decades.

As a trusted food seasoning company in Malaysia, Ajinomoto (Malaysia) Berhad’s

policy is to continuously improve on the quality of its products and product range and at
the same time complying to international and local rules and regulations for food
manufacturing. This is the Company’s contribution to the joyful and healthy living of the
community and society. The Company is committed to be an exemplary corporate
citizen. It is the Company’s continuous efforts to protect and improve the environment
vis-a-vis its operations. Health and safety considerations in the workplace are also of
utmost importance as employees are important assets of the Company.

The Company commenced operations in 1961 with only a single product, namely,
AJI-NO- MOTO® Umami seasoning. Today, the retail product range has expanded to
include pepper, chicken stock and sweetener. The Company will continue to conduct
market research on the needs of the community in the area of food seasoning in order
to further expand its product range.
The Company has a wide range of savory seasoning products, which the
Company markets under the name TENCHO. These TENCHO products are widely
used by industrial producers of food such as instant noodle, seasoning, snack food,
sauce, processed food, etc.

1
HISTORY

2
1.2 Vision and mission statement

Mission
Ajinomoto's mission is to contribute to the world’s food and wellness, and to better
lives for the future.

Vision
Be a “Global Customer-Centric Halal Food Company” to contribute in resolving
People’s Food and Health Issues​through Our Specialties and Innovative Solutions.

1.3 Organizational Chart

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ACHIEVEMENT BY AJINOMOTO COMPANY
First award
Langkawi, 30 March 2017 — This year, Ajinomoto (Malaysia) Berhad (AMB) added
another feather to its cap by winning the Silver Award for the Best Community
Programme at the 9th Annual Global CSR Summit & Awards and the Global Good
Governance Awards 2017, both of which were held in Langkawi, Malaysia. The
category for which the award was given was "companies with market capitalization less
than USD 1 Billion."
The Global CSR Summit & Awards and the Global Good Governance Awards are
recognised as the most prestigious and respected platforms for recognising excellent
CSR and governance practises from companies and leading brands from the region and
the rest of the world. These awards are presented at the Global CSR Summit & Awards.
This year, a total of 146 submissions were submitted from various locations across the
globe; however, only 38 businesses were recognised with top awards in the 16 primary
award categories. The project "Eat Well, Live Well Together with Umami" was a
yearlong endeavor that was organized by AMB in conjunction with International Medical
University and Rumah Victory Elderly Home, located in Puchong. It was the initiative
that was selected as the winner.
The Silver Award for the Best Community Programme was a wonderful recognition of
AMB's exceptional contributions in promoting a better quality of life and improving the
health standards of the golden aged population. More specifically, the program's focus
was on reducing sodium intake and maintaining a balanced diet intake through the
implementation of a nutritious diet programme that was rich in umami.Through
participation in the Ajinomoto Shared Value (ASV) programme, Ajinomoto America, Inc.
(AMB) will make an effort to contribute to the solution of societal problems, with a
particular emphasis on the areas of global sustainability, food resources, and healthy
living, utilizing our one-of-a-kind business specializations in the food and amino acid
industries

4
Second award
KUALA LUMPUR, 2nd December 2021 — Receiving "The Best Malaysian Halal
Certificate Holder" Award from the Department of Islamic Development Malaysia
(JAKIM) during the National Halal Conference 2021 was a significant accomplishment
for Ajinomoto (Malaysia) Berhad (AMB). This award was presented to AMB in the Large
Industry Category. The Malaysian Prime Minister, YAB Dato' Sri Ismail Sabri, was the
one who officially kicked off the conference.
On November 23, 2021, the Minister in the Prime Minister's Department for Religious
Affairs, YB Senator Tuan Haji Idris Haji Ahmad, handed the award to En. Azhan
Mohamed, the Chief Production Officer of the AMB. The year 1961 marks the beginning
of AMB's business operations, during which time it was the sole producer of
AJI-NO-MOTO Monosodium Glutamate (MSG) in Malaysia. This marked the beginning
of AMB's presence in the world. Because of this, AMB is recognised as having been
one of the very first Japanese corporations to establish a presence in the country.
After AMB had begun operations at its "AJI-NO-MOTO" facility in 1965, the
organization was presented with the Halal certification the following year. Since then,
the company has expanded into a vibrant food and spice maker, boasting a variety of
brand names that Malaysians all around the country have put their faith in for decades.
A household brand, AMB has always been completely committed to complying with the
Malaysian Halal Certification Standard in order to meet the requirements of both the
domestic market and the international market. This was done in order to satisfy the
demands of both. The relocation of the new plant to the Halal Hub in Bandar Enstek,

5
Negeri Sembilan, within the next year, will further promote AMB's strength as a trusted
halal food company that is well-liked by all stakeholders across the local and overseas
markets, including the Middle East. This will take place within the next year.

1.4 CSR Activities

Ajinomoto started publishing an annual environmental report in 2001; the first

CSR Report was published in 2004. The Ajinomoto Group recognises that, in order to
become a "Genuine Global Specialty Company" that is trusted worldwide, it must
engage with stakeholders and incorporate their suggestions into its business
operations. In order to more effectively contribute to society and the environment across
all of its business operations, the Group is identifying the most important issues for its
business, maintaining communication with stakeholders, and keeping in mind that public
expectations change with the times and social climate.

Ajinomoto Group Philosophy (AGP) and Ajinomoto Creating Shared Value (ASV)
To achieve its vision of being a "Genuine Global Specialty Company," the Ajinomoto
Group is committed to realizing the goals outlined in the Ajinomoto Group Philosophy
(AGP), "Eat Well, Live Well," and growing into a vital partner to customers and society
at large. The Ajinomoto Group has always worked to solve and address global societal
concerns across the value chain through its varied business portfolio, which is centered

6
on consumer foods and amino science. As a representative of Ajinomoto Group, ASV
works toward the company's 2021 aim of being one of the world's top 10 food
companies. The ASV is a representation of Ajinomoto (Malaysia) Berhad's efforts to
create social and environmental value through the promotion of a healthy lifestyle, the
efficient use of food resources, and the protection of the environment.

Ajinomoto Four Material Issues

The Ajinomoto Group updated its 2019 materiality items in light of changing societal
norms and the views and expectations of the company's many constituencies. The
Group intends to contribute value by identifying opportunities and threats posed by the
materiality items and creating responses to them. The strategy and specific initiatives
taken by The Ajinomoto Group to address social issues are introduced throughout four
section

7
Corporate Social Responsibility Ajinomoto (Malaysia) Berhad Approach
When it comes to CSR, Ajinomoto (Malaysia) Berhad follows the same guidelines as
the rest of the Ajinomoto Group, which centers on the Four Material Issues. In order to
be a good corporate citizen, a corporation must meet its legal and ethical obligations, as
well as its economic ones, which include making a profit and operating lawfully and
fairly.

1. Food and Nutrition (Covered Material Issues No 1: Health and WellBeing

& Material Issues No 2: Food Resources) :

a. AMB implemented projects focused on food and nutrition across the

nation in collaboration with its many stakeholders to improve societal
well-being. Food and Nutritional Program Improvement. The Ajinomoto
International Cooperation Network (AIN) Program for Nutrition and Health
(Since 2009) To empower the "Orang Asli" (indigenous) women living in
the Temerloh and Jerantut districts of Pahang's Krau Wildlife Reserve
(KWR) with knowledge of health and nutrition and to appoint them as LRIs
(Local Resource Individuals), AMB collaborates with Universiti Putra
Malaysia (UPM) on this important project. The goal is to lower infant
mortality and early childhood malnutrition.
b. Nutrition and Health Education Activity. Media Sharing Of Umami & MSG
Information (Since 2012) The public constantly relies on the media as a
reliable source of information. Therefore, AMB pledges to take the effort to
inform the relevant local media about the facts of umami and MSG in
order to further raise awareness and comprehension for battling any
erroneous rumors that have unnerved the people.

8
2. Environment (Covered Material Issues No 3: Global Sustainability)

a. Malaysian System Ajinomoto Lindungi Alam (SALAM). To handle

environmental challenges, including those involving the effluent from
processes and other waste produced by the business, AMB has
established a unit called SALAM. SALAM is actually an acronym for
"Sistem Ajinomoto Lindungi Alam Malaysia," a company that prioritized all
facets of environmental preservation to keep an influence on the
environment to a minimum or within legal bounds. Solid waste
segregation. As part of their effort to lessen the influence on the
environment, they separate and recycle any solid wastes they use or
produce, such as metal, plastic, aluminum cans, paper, dry sludge from
effluent treatment, etc.
b. “Smile Earth” Awareness Campaign. The Ajinomoto Group launched the
"Smiles Earth" Awareness Campaign as one of its Global Citizenship
Initiatives to lessen negative effects on local and global ecosystems. All
AMB personnel will participate in this campaign and give their best effort to
help protect the environment for future generations. Clean Up Our Earth
Together Day is one of many campaigns that have been carried out. All of
their employees participate in an enjoyable activity that involves cleaning
up the surrounding area and the business grounds. additional
environmental protection measures Campaign "Mottainai" In Japanese,
the word "mottainai" means "avoid waste." It is an activity that promotes
"reuse of idle resources that are nearby" in an effort to preserve the
environment. Items that are no longer in use will be gathered during these
activities and given to people in need.

9
3. Community Activities
a. Titipan Kasih 2013. In order to provide daily essentials and spend quality
time with the underprivileged Malay community during the holy month of
Ramadan, AMB worked with Harian Metro media on the Titipan Kasih
Program 2013.
b. Donation for Tohoku District-Off Pacific Ocean Earthquake. Monetary
contribution for the Tohoku District-Off Pacific Ocean Earthquake. AMB
started a fundraising effort in March 2011 to aid the 'Tohoku-Pacific Ocean'
earthquake victims. This action was taken so that the AMB members may
send their sympathies to their Japanese coworkers and family members in
light of the extensive damage the natural disaster's aftermath had done to
both the Tokyo and Tohoku branches of AJINOMOTO.
4. Human Resource Development (Covered Material Issues No 4: Business
Foundation)
a. Development and educational training programmes for employee
development. In order to transform individual talents into potent leaders
who can confidently address frequent global changes and challenges, we
developed a number of tailored internal and external training programmes
that place a focus on developing leadership competencies, functional
competencies, personal effectiveness, and team spirit.
b. Scholarship Initiative. The Ajinomoto Scholarship Foundation was
established to offer complete financial aid for three years to deserving
students who wish to pursue a Master's degree at the University of Tokyo
in Japan. Additionally, a yearly award will be granted to students who
succeed in academics in regional higher education institutions.

10
2.0 ANALYSIS OF FINANCIAL STATEMENT

2.1 Liquidity Ratio

The liquidity ratio reflects the company's readiness to fulfill immediate obligations (debt).
The liquidity current ratio is employed. In a word, current ratios are a measure of how
soon the company's ability to pay down its debt and manage its term commitments may
fail. The company's capacity to pay off short-term debt easily is determined by the fast
ratio, which should be quickly filled with current assets on hand without considering the
value of inventory.

2.1.1 Current Ratio

A company's current assets and liabilities are examined using the current assets to
current liabilities ratio, sometimes referred to as the "working capital ratio." It's important
to note that this type of ratio counts inventories as a current asset, unlike a quick ratio.

2.1.2 Quick Ratio

An organization's current assets and liabilities are evaluated using quick ratios,
sometimes referred to as "acid-test ratios." It excludes a business's inventory since it is
a current asset. The fast ratio is used by corporations when they must pay their
creditors in full within 90 days.

2.1.3 Cash Ratio

A measure of a company's liquidity is the cash ratio. It particularly determines the

proportion of current liabilities to total cash and cash equivalents held by a corporation.
The statistic assesses the company's capacity to pay off its short-term debt using cash
or resources that can be converted into cash quickly, including easily marketable
securities.

2.1 Liquidity Ratio

2.1.1 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜 = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡𝐶𝑢𝑟𝑟𝑒𝑛𝑡

𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠 𝐴𝑠𝑠𝑒𝑡

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝑅𝑎𝑡𝑖𝑜= 331 503 722

101 547 417

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= RM 3.26

We can safely say that for every RM 1 short term debt Ajinomoto owed, it had RM 3.26
backing by current.

2.1.2 Quick Ratio = 𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠 −𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑖𝑒𝑠

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

𝑄𝑢𝑖𝑐𝑘 Ratio = 331503722−56698168

101 547 417

= 2.71 x

Ajinomoto is covering its current liabilities 2.71 times without any contribution from its
inventory.

2.1.3 Cash Ratio = 𝐶𝑎𝑠h

𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

C𝑎𝑠h Ratio = 215 216 446

101 547 417

= 2.12 x

This indicates that 0.30 times of Ajinomoto’s current liabilities are covered by the current
cash on hand.

2.2 Profitability Ratio

Using information from a specific point in time, profitability ratios are a class of financial
metrics that are used to evaluate a company's capacity to generate profits in relation to
its revenue, operating costs, balance sheet assets, or shareholders' equity over time.

2.2.1 Return on Equity Ratio

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A company's ability to manage the capital that shareholders have put in it is indicated by
its return on equity (ROE), a financial measure. Divide shareholder equity by net income
to get return on equity (ROE).

2.2.2 Return on Asset

Return on assets (ROA) is a metric for gauging how well a business uses its assets to
make money. ROA is a metric that managers, analysts, and investors use to assess a
company's financial standing.

2.2 Profitability Ratio

𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 = 𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒

𝑆𝑎𝑙𝑒𝑠

𝑃𝑟𝑜𝑓𝑖𝑡𝑀𝑎𝑟𝑔𝑖𝑛 = 46 502 317

443 119 251

= 0.10

Ajinomoto is generating 10 cents of profit from every sales dollar

2.2.1 𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐸𝑞𝑢𝑖𝑡𝑦 = 𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒

𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦

𝑅𝑒𝑡𝑢𝑟𝑛𝑜𝑛𝐸𝑞𝑢𝑖𝑡𝑦 = 46 502 317

512 312 245

= 0.09

This means that Ajinomoto generated 9 cents of profit for every RM 1 of total equity,
giving the company a ROE of 9%.

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2.2.2 𝑅𝑒𝑡𝑢𝑟𝑛 𝑜𝑛 𝐴𝑠𝑠𝑒𝑡𝑠 = 𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚e
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠

𝑅𝑒𝑡𝑢𝑟𝑛𝑜𝑛𝐴𝑠𝑠𝑒𝑡𝑠 = 46 502 317

727 528 691

= 0.66

The assets of Ajinomoto are generating 66 cents per investment dollar in profit.

2.3 Turnover Ratio

The percentage of investments in a mutual fund or other portfolio that have been
replaced over the course of a year (either the calendar year or the 12-month period that
corresponds to the fund's fiscal year) is known as the turnover ratio or turnover rate.

2.3.1 Inventory Turnover Ratio

Inventory turnover is the period of time between when a corporation purchases a

product and when it is sold. Having sold all of the merchandise that was acquired, less
any items lost to damage or shrinkage, is referred to as a full turnover of inventory.

2.3.2 Receivable Turnover Ratio

The efficiency with which a business is able to collect on its receivables or the credit it
gives to clients is measured by the receivables turnover ratio. The ratio also counts the
number of times a company's receivables are turned into cash during a specific time
period.

2.3.3 Total Asset Turnover

The asset turnover ratio gauges how well a business's assets produce income or sales.
It computes an annualised percentage comparison between the quantity of sales
(revenues) and the total assets. Divide net sales or revenue by the average total assets
to arrive at the asset turnover ratio.

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2.3.1 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 = cost 𝑜𝑓 𝑆𝑎𝑙𝑒𝑠 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟y

Inventory turnover= 231.72

56.7

= 4.09 x

Ajinomoto sold and restocked the entire inventory about four times during the year.

𝐷𝑎𝑦'𝑠 𝑆𝑎𝑙𝑒𝑠 𝑖𝑛 inventory= 365

𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

𝐷𝑎𝑦'𝑠𝑆𝑎𝑙𝑒𝑠𝑖𝑛inventory = 365
4.09

= 89.24 days

Inventory was “on the shelf” for eighty-nine days at Ajinomoto.

2.3.2. 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 =𝑆𝑎𝑙𝑒𝑠

𝐴𝑐𝑐𝑜𝑢𝑛𝑡 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠

𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 = 443, 119, 251

56, 276,691

= 7.87

Ajinomoto collected payment on credit accounts about 8 times per year the companies.

15
𝐷𝑎𝑦'𝑠 𝑆𝑎𝑙𝑒𝑠 𝑖𝑛 𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠 = 365
𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟

𝐷𝑎𝑦'𝑠𝑆𝑎𝑙𝑒𝑠𝑖𝑛𝑅𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒𝑠 = 365
7.87

= 46.38

Customers took an average of 46 days at Ajinomoto to pay for their credit purchases.

2.3.3 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 =𝑆𝑎𝑙𝑒𝑠

𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠

𝑇𝑜𝑡𝑎𝑙𝐴𝑠𝑠𝑒𝑡𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟 =443 119 251

727 528 691

= RM 0.61

The outcome of 0.61 means that for every RM 1 of assets, RM 0.61 of net sales are
generated.

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2.4 Solvency Ratio

A leverage ratio is one of several financial metrics that evaluates a company's capacity
to fulfill its financial commitments. In order to estimate how changes in output would
impact operating profits, a company's mix of operating costs may also be measured
using a leverage ratio.

2.4.1 Debt Ratio

The phrase "debt ratio" refers to a financial ratio that assesses how much leverage a
business has. The ratio of total debt to total assets, represented as a decimal or
percentage, is known as the debt ratio. The percentage of a company's assets that are
financed by debt is one way to understand it.

2.4.2 Debt-to-equity Ratio

The debt-to-equity (D/E) ratio, which measures a company's financial leverage, is

determined by dividing its total liabilities by the value of its shareholders. The D/E ratio
is a crucial indicator in corporate finance.

2.4.3 Times Interest Earned

Based on its present operational revenue, a company's capacity to pay its debts in
interest is gauged using the Times Interest Earned Ratio (TIE). The TIE ratio, often
referred to as the interest coverage ratio, aids in determining a borrower's credit
standing. As a general rule, the ability of the corporation to pay off its interest expenses
on schedule increases with the times interest earned ratio.

2.4.4 Cash Coverage Ratio

The cash coverage ratio is an accounting metric that assesses a company's capacity to
cover interest costs and determine whether there are enough resources on hand to
cover both interest costs and make a profit.

2.4.1 Debt 𝑅𝑎𝑡𝑖𝑜 = 𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠

17
𝐷𝑒𝑏𝑡 𝑅𝑎𝑡𝑖𝑜 = 215 216 446
727 528 691

= 0.30

This ratio indicates that 30 percent of the firm’s assets are financed by debt.

2.4.2 𝐷𝑒𝑏𝑡 − 𝑡𝑜 − 𝐸𝑞𝑢𝑖𝑡𝑦 𝑅𝑎𝑡𝑖𝑜 = 𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡

𝑇𝑜𝑡𝑎𝑙 𝑂𝑤𝑛𝑒𝑟'𝑠 𝐸𝑞𝑢𝑖𝑡𝑦

𝐷𝑒𝑏𝑡 − 𝑡𝑜 − 𝐸𝑞𝑢𝑖𝑡𝑦 𝑅𝑎𝑡𝑖𝑜 = 215 216 446

512 312 245

=0.42

Ajinomoto company uses 42 percent in debt for every RM 1 of equity.

2.4.3 𝑇𝑖𝑚𝑒𝑠 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐸𝑎𝑟𝑛𝑒𝑑 = 𝐸𝐵𝐼𝑇

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑒𝑥𝑝𝑒𝑛𝑠𝑒

TIE = 𝑃𝑟𝑜𝑓𝑖𝑡 𝑏𝑒𝑓𝑜𝑟𝑒 𝑡𝑎𝑥 + 𝐹𝑖𝑛𝑎𝑛𝑐𝑒 𝐶𝑜𝑠𝑡)

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑒𝑥𝑝𝑒𝑛𝑠𝑒 𝑜𝑛 𝑙𝑒𝑎𝑠𝑒 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

61255839+359655
359 655

= 171.32 x

The 61 615 494 is the operating income, representing earnings before interest and
taxes. The 171.32 times outcome indicates how many times Ajinomoto will repay
interest on an outstanding loan

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2.4.4 𝐶𝑎𝑠h 𝐶𝑜𝑣𝑒𝑟𝑎𝑔𝑒 𝑅𝑎𝑡𝑖𝑜 =𝐸𝐵𝐼𝑇 + 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑒𝑥𝑝𝑒𝑛𝑠𝑒

CCR= 𝐸𝐵𝐼𝑇 + 𝐷𝑒𝑝𝑟𝑒𝑐𝑖𝑎𝑡𝑖𝑜𝑛

𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑒𝑥𝑝𝑒𝑛𝑠𝑒

CCR= 61 615494 + (16 592499 + 1 287001)

359 655

61615494+17879500
359 655

= 221.03 x

The company is generating earnings before interest and taxes of RM 61615494 and it
records annual depreciation of RM 17879500.This means that they currently have the
funds available to pay off all debt, which is a favorable position for potential investors.

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CONCLUSION

Umami spice from Ajinomoto has grown in popularity among Malaysian

customers over the past 50 years. The group's brand has developed into the industry
leader, with a commanding market share of more than 80%. Due to its established
position in the Malaysian market, "Ajino-Moto" MSG is the segment's greatest revenue
provider under its consumer division. Along with rising demand, other goods are
anticipated to increase positively in the future, including the "Tumix" flavor seasoning,
the "Seri Aji" menu seasoning, and other seasonings including "Aji-Shio," "Aji-Mix," and
the sweetener PalSweet.

The safety of the product has been certified by FSSAI in India, by FDA in USA,
Thailand and is Food Safety Certified in Australia and New Zealand. Ajinomoto’s future
prospects follow its strong brand and steady consumer demand over the years with a
wide range of product offerings to both retail and industrial customers. Besides, the
group also has strong export positions in many countries.Despite dominating the MSG
market, Ajinomoto faces stiff competition in other food and seasoning products from
local brands and overseas producers. Based on its latest financial results, management
is cautious that foreign exchange fluctuations and trade tensions could inflate the cost of
imported raw materials. However, the group will adopt the effective cost management
as well as sales plan to strengthen overall sales and profit.

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