i) Company??™s Background
Incorporated in 1994, PUSPAKOM is a wholly-owned subsidiary of DRB-HICOM. It is Malaysia??™s first and only comprehensive national vehicle inspection company that is authorized by the Malaysian Government. It was awarded a 15-year concession to undertake computerized vehicle inspections for all commercial vehicles. Through its network of 71 branches nationwide and mobile units, it performs more than 3 million inspections with more than 1.5 million customers annually. In addition to mandatory inspections set out under The Road Transport Act 1987, PUSPAKOM has diversified and expanded its services to carry out inspections for private vehicles related to assessment prior to financing and auction as well as valuation and voluntary inspections. Its creditable performance has resulted in the renewal of the concession for another 15 years beginning 1 September 2009. This paves the way for it to realize its vision to be globally recognized authority in vehicle safety certification.
PUSPAKOM is fully equipped with the state-of-the-art computerized vehicle inspection equipment. The computerized system is secured and real time data transfer to Road Transport Department. PUSPAKOM is also supported by its highly competent personnel in providing excellent services to its customers in the most conducive environment. There are 5 main benefits inspecting a vehicle in PUSPAKOM.
1. Safety: By inspecting our vehicle at least twice a year will detect any mechanical problems that may jeopardize your vehicle??™s roadworthiness.
2. Confidence: Thorough vehicle inspection gives you a greater sense of confidence and assurance knowing that your vehicle in optimum condition.
3. Environment: Have your vehicle inspected to ensure that your vehicle does not emit excessive smoke and noxious gases that pollute our environment in accordance to the environment Act 1974
4. Cost Saving: a 10 point inspection helps you detect an ascertain any mechanical defects in your vehicle before it becomes more serious
5. Legality: an inspection at PUSPAKOM will protect you from the consequence of purchasing vehicle that suffer from irregularity such as ???Cut and Joint??? and stolen vehicle. It will verify the legal identity of your vehicle in conforming to all legal requirements of Road Transport Act 1987.
PUSPAKOM has always strived to exceed all expectations by looking into every detail of a vehicle safety as well as the personal needs of its valued customers. PUSPAKOM Vision is ???To be a globally recognized authority in vehicle safety inspection???. PUSPAKOM mission on the other hand is ???We make Transportaion safer???.
ii) Nature of business
Puspakom Sdn Bhd. provides vehicle inspection services. It offers accident vehicle, transfer of ownership, government vehicle, voluntary, mobile, and valuation inspection services, as well as initial, routine, and re-inspection services. The company also provides inspection prior to auction, tinted glass testing, vehicle plan verification, and taxi meter calibration services. In addition, it offers training and seminars on vehicle safety and maintenance, as well as supplies vehicle inspection equipment.
Basically, PUSPAKOM is the main inspection authority in Malaysia and responsible to perform inspection on every commercial vehicle that operates in Malaysia. Thus, PUSPAKOM??™s nature of business falls under ???services sector??™ as they provide a service of inspection. PUSPAKOM provides 10 point of inspection services which are:
1. Identification check
Verify the chassis and engine number of a vehicle.
2. Above carriage check
Detailed inspection for defects on the upper body in accordance with the Road Transport Act 1987
3. Emission test
Density of particle in diesel engine emission are gauge through free acceleration tests and volume of gases e.g. HC and CO from petrol engines are gauge through idling test.
4. Brake Test
Test for brakes services efficiency, dynamic imbalance, run out, residual forces and parking brake are conducted to ensure optimal braking performance.
5. Side Slip Test
Lateral movement of the vehicle is tested to fulfill optimal road handling criteria.
6. Suspension Test
Check the effectiveness of the suspension system (spring, shock absorber, joints) on each axle.
7. Speedometer test
Check the accuracy of the speedometer against the road speed at the wheels.
8. Headlight test
Measure the intensity and projection of the vehicle headlights.
9. Undercarriage test
Thorough inspection of the undercarriage wit hvehicle being tested on axle detector.
10. Tinted Glass Test
The tinted glass test ascertains the visible light transmission of your vehicle.
Besides the main services, PUSPAKOM also offers other services such as Plan verification, taxi meter calibration and also PUPSKOM TEKNIK.
iii) Financial Performance
PUSPAKOM has a strong financial performance as every PUSPAKOM transaction was done in cash. This shows strong cash liquidity. In addition, PUSPAKOM is the one and only company that provide an inspection services. The main challenge of PUSPAKOM is to increase the profit margin and looking into other business opportunity which could acquire a large amount of cost.
2. ANALYSIS OF THE GROWTH RATE
a. PUSPAKOM Sales Data:
Table 1: Data of PUSPAKOM sales from 2005- 2009
Year Sales (Million)
Based on the sales data above, we can see that PUSPAKOM is having a growth rather than decay. The data above shows that the sales of PUSPAKOM are increasing from year of 2005 to year of 2009 from 70 million in 2005 to 105 million in 2009. Based on the data above, growth rate for every year (starting from 2005 to 2009) can be calculated in order to analyze the total sales performance of PUSPAKOM from year 2005 to 2009.
Main Formula of calculating a growth rate is:
P = Po ert
P: Number of Residents after t years
po: Number of original Residents
r: Percentage (rate) of Growth
t: Time period
From the formula above, we can apply the main formula. P stands for the number of Sales after t years. Which it means that P represents the total sales of after a previous year. In this case, as for year 2005 to 2006, P is equal to 80 million.
po on the other hand means, Number of original Sales which means total amount of previous sales which related to P. as for years 2005 to 2006 growth rate, po is equal to 70 million.
r on the other hand means, Percentage (rate) of Growth which will be calculated below. r is the growth rate that will be look into in order to determined the sales growth rate of PUSPAKOM.
t on the other hand means, Time Period which will be the constraint in calculating the growth rate.
The calculation of the sales growth rate of PUSPAKOM are:
??? Sales Growth Rate of PUSPAKOM for the year 2005 to 2006 are:
P = 80 million Po = 70 million t = 1 year
P = Po ert
80 = 70 er1
80/70 = er1
1.14 = er1
Loge 1.14 = r1
Ln 1.14 = r1
r = ln 1.14 / 1
r = 13.35
The Sales Growth Rate of PUSPAKOM for the year 2005 to 2006 is 13.35%.
??? Sales Growth Rate of PUSPAKOM for the year 2006 ??“ 2007:
P = 90 million Po = 80 million t = 1 year
P = Po ert
96 = 80 er1
96/80 = er1
1.2 = er1
Loge 1.2 = r1
Ln 1.2 = r1
r = ln 1.2 / 1
r = 18.23
The Sales Growth Rate of PUSPAKOM for the year 2006 ??“ 2007 is 18.23%
??? Sales Growth Rate of PUSPAKOM for the year 2007 ??“ 2008:
P = 100 million Po = 96 million t = 1 year
P = Po ert
100 = 96 er1
100/96 = er1
1.0417 = er1
Loge 1.0417 = r1
Ln 1.0417 = r1
r = ln 1.0417 / 1
r = 4.08
The Sales Growth Rate of PUSPAKOM for the year 2007 ??“ 2008 is 4.08%
??? Sales Growth Rate of PUSPAKOM for the year 2008 ??“ 2009:
P = 105 million Po = 100 million t = 1 year
P = Po ert
105 = 100 er1
105/100 = er1
1.05 = er1
Loge 1.05 = r1
Ln 1.05 = r1
r = ln 1.05 / 1
r = 4.87
The Sales Growth Rate of PUSPAKOM for the year 2008 ??“ 2009 is 4.87%
Once the Sales Growth rate has been successfully calculated, the data transferred to the table below:
Table 2: Table of PUSPAKOM sales with Growth Rate from year 2005 – 2009
Year Sales (Million) Growth Rate
2005 70 –
2006 80 13.1%
2007 96 18.23%
2008 100 4.08%
2009 105 4.88%
3. DESCRIPTION OF THE SALES TREND
The data from the table 2 transferred to the Graph as shown below:
Graph 1: PUSPAKOM total sales from year 2005 – 2009
Based on the graph above, PUSPAKOM incur a positive Sales trend (Upward slope) from 2005 ??“ 2009 with a 10.1% increasing rate yearly.
From the Table which has been calculated, the Sales Growth Rate, the data was transformed to graph in order to see a clear picture of the sales to better understand the sales trend. Based on the graph above, PUSPAKOM??™s Sale shows a slight increase from the year 2005 to 2009. Starting from 2005 to 2006, total sales of PUSPAKOM increase from 70 million to 80 million (10 millions increase) and the Sales Growth Rate of PUSPAKOM also increase amounting 13.1%. From 2006 to 2007, total sales of PUSPAKOM increase from 80 million to 96 million (16 million increase) and followed by increase in Sales Growth Rate of PUSPAKOM amounting 18.23%. From 2007 to 2008, total sales of PUSPAKOM increase from 96 million to 100 million (4 million increase) and Sales Growth Rate of PUSPAKOM also increase 4.08%. From 2008 to 2009, total sales of PUSPAKOM increase from 100 million to 105 million (5 million increase) and Sales Growth Rate of PUSPAKOM also increase amounting 4.88%.
However, even though PUSPAKOM incur a positive Sales Growth Rate, the Sales Growth Rate increase at a decreasing rate which means a negative Growth Rate (Downward slope) as illustrated on the Graph below. In this case, the generation of sales for PUSPAKOM is actually decreasing (real increasing growth rate). Based on the growth rate trend, it easier to analyze the real growth rate and easy for PUSPAKOM to plan for future planning. This is proven from the Graph 3 illustration based from the table 3 which shows a total amount of total sales increase from 2005 to 2009. Graph 3 pattern and trend is similar with the Sales Growth rate as both graph 2 and 3 has the same trend relation and both graph must be positive relationship.
Graph 2: PUSPAKOM growth rate of sales from year 2005 – 2009
Table 3: Table of PUSPAKOM Total sales increase with Growth Rate from year 2005 ??“ 2009
Year Sales (Million) Total Sales increase (mil)
2005 70 –
2006 80 10
2007 96 16
2008 100 4
2009 105 5
Table 3 shows the total amount of sales increase from year 2005 to 2009.
Graph 3: PUSPAKOM Total amount of Sales increase from year 2005 – 2009
In conclusion, from year 2005 ??“ 2009, PUSPAKOM total sales increase from 70 million in 2005, 80 million of total sales in 2006, 96 million total sales in 2007, 100 million total sales in 2008 and 105 million total sales in 2009. In 2005 to 2006, total amount of sales increase is 10 million, 16 million in 2006 to 2007, 4 million in 2007 to 2008 and 5 million in 2008 to 2009. This data and illustration can be shown on table 3 and graph 3.
With reference to Graph 1, PUSPAKOM incur a positive sales trend with a positive growth trend (refer graph 2). Starting from year 2005, Growth rate from 2005 ??“ 2006 is 13.1%, 2006 ??“ 2007 is 18.23% which is the highest among 5 years, 2007 ??“ 2008 is 4.08% and 2008 ??“ 2009 is 4.88%.
However, based on graph 2 and graph 3, even though PUSPAKOM incur a positive growth rate, the growth rate trend starting to decrease starting from year 2007 to 2009. This is not a good sign or indicator to PUSPAKOM as if PUSPAKOM let this trend to continue, they may suffer to decreasing rate of sales growth rate in the long run.
However, if we analyze deeper, PUSPAKOM is a company that will not get big impact to any economic recession as PUSPAKOM is an authorized inspection service provider and their sole existence in Malaysia could give huge advantage.
However, in order to improve the financial condition, even though PUSPAKOM financial will not get so much impact on the economic trend, their profit margin will get affected if no action. The reduction of the company??™s profit margin will draw out investors and also reduced the trust of the stake holder.
PUSPAKOM should do something in order to increased their growth rate such as, looking for new business opportunity, better marketing strategy or improve internal sales team by providing a better training and coaching.