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This is a fictional teaching example, not a real client engagement, audit, financing opinion or benchmark.
Executive summary
- Revenue: RM1,250,000. Gross profit: RM350,000 (28.0%). Operating profit: RM100,000 (8.0%).
- Closing cash is RM340,000, down RM80,000 from opening RM420,000 despite a positive operating profit.
- Receivables increased RM230,000 to RM1.85m; inventory increased RM150,000 to RM2.4m. These movements merit investigation, not a diagnosis.
REVENUERM 1.25m
GROSS MARGIN28.0%
OPERATING MARGIN8.0%
Revenue and profitability
| Item | RM |
|---|---|
| Monthly revenue | RM 1,250,000 |
| Cost of goods sold | RM (900,000) |
| Gross profit | RM 350,000 |
| Operating expenses | RM (250,000) |
| Operating profit | RM 100,000 |
Illustrative arithmetic: 1,250,000 − 900,000 = 350,000; 350,000 − 250,000 = 100,000.
Cash movements
| Opening cash | RM 420,000 |
| Cash collected | RM 1,090,000 |
| Payments made | RM (1,170,000) |
| Closing cash | RM 340,000 |
420,000 + 1,090,000 − 1,170,000 = 340,000
Working capital & operational signals
| Accounts receivable | RM 1,850,000 (+RM 230,000) |
| Inventory | RM 2,400,000 (+RM 150,000) |
Management action tracker
| Action | Next step | Responsible | Due |
|---|---|---|---|
| Collection discipline | Review overdue customer balances and agree collection owners. | Finance Manager | Next 2 weeks |
| Inventory cash | Review slow-moving stock and upcoming purchase commitments. | Operations + Finance | Next month |
| 13-week forecast | Reconcile forecast inflows/outflows to invoices and payroll. | CFO Lead + Finance | Weekly |
Questions to ask at the monthly review
- Which customers are delaying receipts, and why?
- How much cash is tied up in slow-moving stock?
- What would a machine purchase do to the 13-week forecast?
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