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Financial Ratios and Popular Holdings

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Financial Ratios and Popular Holdings
Course Instructor
Professor Goh Beng Wee

Team Members
Ng Si Yong
Lo Yeow Fong
Charissa Sim
Yik Jia Qi
Ong Shu Fang acct103-G4 Analysis of Popular Holdings Limited
Financial Accounting Term Project

(for OBHR 001 – Leadership and Teambuilding)

Executive Summary
Popular Holdings is a main board listed company in Singapore. It was incorporated in Singapore on 5 October 1996 as a private company under Popular Holdings Limited and the principal activity is that of an investment holding. Popular Holdings has many subsidiary companies and most of them are engaged in diverse activities such as retail and publishing, e-Learning and recently, property development.

Focus on Strong Fundamentals and Innovation
Over the years, Popular Holding started out from a bookstore and expanded to an investment holding company with diverse footholds in different businesses. It was able to achieve a dominant position in the book retail business as it continuously changed its business models to adapt to the times. In the 1970s, Popular Holdings positioned itself as the only bilingual bookstore chain in Singapore and it later brought the same concept to Malaysia. Then, Popular Holdings recognized the potential of suburban areas, and started opening new stores. It is one of the most successful book retail and publishing businesses.

Concern for Growth
Popular Holdings has been experiencing margin compression for its retail business. Also while Popular Holdings has tried to invest in other areas such as property in FY 2006, the recent financial turmoil in FY 2008 has caused Popular Land, a subsidiary, unable to sell off its up market residential properties in Singapore. This is a cause for concern because Popular Holdings has borrowed heavily to finance its purchase and development of the properties. If it still cannot sell off its properties in the long run, it may run into cash flow problems and this may affect its future growth negatively. The bleak economy in the
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