FACULTY OF BUSINESS MANAGEMENT

FIN 242

FUNDAMENTAL OF FINANCE

ROLE PLAY : SHORT – TERM FINANCING

GROUP : JBA1114E

PREPARED BY :

NO. NAME STUDENT NO.

1.

2. UNGKU SARAH MAIMUNAH BINTI UNGKU AZMAN 2022843656

3. NUR HASYA BINTI HAMISAN 2022644732

4.

5.

PREPARED FOR:
PN. NIK NUR SHAFIKA MUSTAFA

DATE OF SUBMISSION:
 TABLE OF CONTENT

CHAPTER 1 : COMPANY PROFILE.................................................................................................................2

CHAPTER 2 : ANALYSIS OF SHORT TERM FINANCING NEEDS.......................................................................2
CHAPTER 3 : CONCLUSION AND RECOMMENDATION.................................................................................2
REFERENCES 3
 CHAPTER 1
COMPANY PROFILE

ATA IMS Berhad is a Malaysia-based electronics manufacturing services (EMS) provider

catering to international brands. The Company is principally involved in manufacturing and sales
of precision plastic injection of molded parts, secondary process, sub assembly, full assembly of
the finished products for the electronic industry and are predominantly carried out in Malaysia.
The Company's industry expertise includes home care, environmental care, lighting, Internet of
things (IOT), automotive and medical.
It delivers different types of vacuum cleaners, such as cordless and canister vacuums.
The Company delivers air purifiers and fans equipped with in-house high efficiency particulate air
(HEPA) filter technology and wi-fi connectivity.
It offers vertically integrated capabilities, such as product design and engineering, supply
chain management, mold design and fabrication, plastic injection molding, box build assembly,
painting, filter, printed circuit board, and logistics.

The financial performance for ATAIMS was decreasing in year 2022 until 2nd quarter 2023 with
the net profit margin of -0.4%, -27.6% and -16%. This shows that ATAIMS face a challenge in
their company due to post covid effect.

*You may find a company profile based on the listed company in Bursa Malaysia.
www.bursamarketplace.com
www.malaysiastockbiz.com
CHAPTER 2
ANALYSIS OF SHORT-TERM FINANCING NEEDS

The company urgently needs to secure financing to expand their business and address
immediate operational needs, maintain production levels, and capitalize on a time-sensitive
supplier discount (it can be any other factor as mention below). Here is the analysis for the three
options of short term financing:

Show the working for all the 3 options:

OPTION 1: Discounted loan with compensating balance

n
Interest = % of interest ×loan×
360

6
Interest = 0.1 × 400 000×
12

Interest = RM 20 000

Compensating Balance = RM 50 000

Loan= RM 400 000

Interest 360
EIR = ×
Loan−Interest −Compensating Balance n

20 000 12
EIR = ×
400 000−20 000−50 000 6

EIR = 12 .12 %
OPTION 2: Revolving credit agreement

n
Interest ¿ ( % of interest ) ×loan ×
12

6
¿ 0.12 × 400,000×
12

¿ RM 24,000

Commitment Fee ¿ ( % of commitment Fee ) ×Unused

¿ 0.05 ×(450,000−400,000)

¿ 0.05 ×50,000

¿ RM 2,500

Compensating Balance ¿ ( % of Compensating Balance ) × Loan

¿ 0.1 × 400,000

¿ RM 40,000

Interest +Commitment Fee 12

EIR ¿
Loan−Compensating Balance
× n

24,000+ 2,500 12
¿
400,000−40,000 × 6

¿ 0.1472 ×100

¿ 14.72 %
OPTION 3:

EIR =
 CHAPTER 3

CONCLUSION AND RECOMMENDATION

Make a conclusion which option is the best for your company. You may include the following
information as part of the reason in making a decision.

 Cost: Compare interest rates, fees, and other costs associated with each option.
 Term: Assess whether the financing term aligns with the company's needs.
 Flexibility: Evaluate the flexibility in terms of usage and repayment.
 Risk Tolerance: Consider the level of risk associated with each option, including interest
rate risk and credit risk.
 Collateral Requirements: Determine if collateral is required.
 Regulatory Considerations: Understand any regulatory constraints or guidelines that
mayapply. E.g. Sharia-compliant
REFERENCES