hm enterprise sdn bh1

8/8/2019 Hm Enterprise Sdn Bh1

1/24

HM ENTERPRISE SDN BHD

RATIO ANALYSIS

NO RATIO DEFINITION CALCULATION MEDIAN

( Industry

average)

RANGE ASSESSMENT

1 Current

Ratio(CR)

Current assets

Current

Liabilities

5,267,338

2,289,591

= 2.3:1

1.5:1 3.1:1

To

1.2:1

Better than industry

average (median).

Strong indication

that the company

able to pay its

current liabilities.

2 Quick

Ratio(QR)

Cash +account

ReceivableCurrent

Liabilities

1,894,074

2,289,591= 0.83:1

1.2:1 2.1:1To

0.6:1

Worse than industry

average but slightlyhigher than the

minimum range of0.6 given to a

commercial

construction

company.

3 Current

Liabilities

to Net

Worth

Ratio.

(CL/NW)

Current

Liabilities

Net Worth

2,289,591

65,904

= 34.74:1

1.12:1 0.32:1

To

2.4:1

Worse than industry

average and higher

than upper end of

the range. Short-

term creditors

would have morecapital at risk,

which is not in good

position to go in.

4 Debt to

Equity

Ratio

(DER)

Total

Liabilities

Net Worth

6,813,629

65,904

= 103.38:1

1.3:1 0.5:1

To

2.7:1

Worse than industry

average and out of

the range given to a

commercial

construction

company. The

company is highly

dependent on debt

capital and may notto service its debt.

5 FixedAssets to

Net Worth

Ratio(FA/NW)

Net FixedAssets

Net Worth

1,592,50165,904

= 24.16:1

0.24:10.08:1To

0.64:1

Worse than industryaverage. The ratio

shows that the

company has aheavy investment in

fixed. Fixed assets

require a constant

stream of income to

offset their loss invalue and monthly

installment

servicing.


2/24

6 Current

Assets to

Total

Assets ratio

(CA/TA)

Current Assets

Total Assets

5,267,383

6,879,533

=0.765:1

or 76.5%

_

Between

0.70:1

and

0.80:1

CA/TA is within the

suggestion rate

given to a

commercial

construction

industry. 76.5% of

the companysassets tied up in

current assets.

Indicates that the

assets of the

company is

considered very

liquid.

7 Collection

Period

(CP)

Account

Receivable

(AR) x 365

/ revenue

AR = (1,284,559

+234,707) / 2

= 759,633

CP = 759,633 (365)

5,648,339

=49.08 days

48 days 22 days

To

75 days

The CP is slightly

higher than the

average but within

the typical range.

The company isfunding the

construction cost to

the client for 48

days.

8 Average

age of

account

payable

(AAAP)

Account

payable(AP) x

365 /(material

+ sub-

contract)

AP=(1,198,112 +

931,485) / 2

= 1,064,798.5

AAAP=1,064,798

x 365 /

5,350,016

= 72.64 daysor 73 days

45 days _

Worse than industry

average of 45 days

indicating that the

company is slow to

pay its bills. The

average age of

account payable is

24 days greater thanits collection period.

9 Assets to

RevenueRatio

(ARR)

Total Assets

Revenue

ATA=(6,879,533 +

2,547,506) /2= 4,713,516.5

ARR=4,713,516.5

5,648,339

= 0.83 or 83%

29% 19%To

55%

Worse than industry

average. Its alsohigher than upper

end of the typical

range indicating that

the company

performing too

much worth to their

assets.

10 Working

Capital

Turns

(WCT)

Revenue

Working

Capital

AWC=ACA ACL

=(5,267,383

+1,728,733) /2

(2,289,591+2,104,704) /2

=1,300,910.5WCT=5,648,339

1,300,910.5

= 4.34:1

12.1:1 23:1

To

6.1:1

Worse than industry

average and also

less than the

minimum typicalrange of 6.1 given to

a commercialconstruction

industry. The

company appears

not properly

capitalized or over

capitalized.


3/24

11 Account

Payable to

Revenue

Ratio

(APRR)

Account

Payable

Revenue

AAP =(1,198,112+

931,485 ) / 2

= 1,064,798.5

APRR=1,064,798.5

5,648,339

= 18.85%

7.9% 2.9%

To

13.0%

Greater than

industry average

and also higher than

upper range given to

a commercial

constructionindustry. The

company is highly

funding by suppliers

and sub-contractors.

12 Gross

ProfitMargin

(GPM)

Gross profit

Revenue

298,323

5,648,339=0.0528 or 5.28%

17% -

Worse than industry

average. The lowerGPM suggests that

the company has a

higher cost of

construction works.

The company need

to do a better

control over its

construction costand increase its

profit.

13 General

OverheadRatio

(GOR)

General

OverheadRevenue

625,150

5,648,339= 0.11 or 11%

Less than10%

-

Worse than industry

average. Thecompany needs to

reduce its general

overhead expenses

or increase its

revenue without

increasing the

general overhead.

14 After taxProfit

Margin

(ATPM)

Net ProfitAfter Tax

Revenue

(286,000)5,648,339

=(0.0506) or

(5.06%)

2.2% 8.7%

To

0.6%

Worse than industryaverage. The

company run the

operation under lost.

15 Return on

Assets

(ROA)

Net Profit

After Tax

Total Assets

ATA=(6,879,533

+2,547,500) / 2

=4,713,516.5

ROA=(286,600)

4,713,516.5

= (0.0608) or

(6.08%)

6.5% 21.7%

To

2.0%

ROA of the

company shows a

negative trend of

(6.08%).

Improvement in the

aftertax profit

margin will help

increase thispercentage.

16 Return onEquity

(ROE)

Net Profit aftertax / Equity

ROE=(286,600)201,098

=(1.425) or(142.52%)

16.7% 53%

To5.4%

Worse than industryaverage. Needs to

improve after taxprofit margin.

17 Degree of fixed

Assets

Net FixedAssets / Total

Fixed Assets

1,592,5011,714,280

=0.93 or 93%

- 60%

To

Worse than therange given to a

commercial


4/24

Newness

(DFAN)

40% construction

industry.

SAMA PELANGIN SDN BHD

RATIOS ANALYSIS


( Industry

average)

RANGE ASSESSMENT

1 Current

Ratio(CR)

Current assets

Current

Liabilities

3,489,581

3,306,239

= 1.O5 : 1

1.5: 1 3.1:1

to

1.2:1

Worse than industry

average. The

companys CR

below 1.5:1 is

considered under

capitalized and may

run into financial

problem. Need toincrease cash capital

through debtfinancing or

converting of fixed

assets to cash.

2 Quick

Ratio

(QR)

Cash +account

Receivable

Current

Liabilities

1,484,073

3,306,239

= 0.45:1

1.2:1 2.1:1

To

0.6:1

Worse than industry

average and also

lower than the

minimum range

given to a

commercial


company with QR

less than one is

considered not

liquid. The company

will need to raise up

their cash either

through debt

financing or

converting theirlong term assets to

cash.

3 Current

Liabilities

to NetWorth

Ratio.

(CL/NW)

Current

Liabilities

Net Worth

3,306,239

317,995

= 10.39:1

1.12:1 0.32:1

To2.4:1

Worse than industry

average and higher

than upper limit ofthe range given to a

commercial

construction

industry. Short-term

creditors wouldhave more capital at

risk which is not in

good position to go


5/24

in.

4 Debt to

Equity

Ratio

(DER)

Total

Liabilities

Net Worth

3,359,498

317,995

= 10.56:1

1.3:1 0.5:1

to

2.7:1

Worse than industry

average and out of


commercial

constructioncompany. The

company is highly

dependent on debt

capital. The ratioindicates that the

company may not

to service its debt.

5 Fixed

Assets to

Net Worth

Ratio

(FA/NW)

Net Fixed

Assets

Net Worth

187,912

317,995

= 0.59:1

0.24:1

0.08:1

To

0.64:1

Worse than industry

average but well

within the typical

range. The high

ratio indicates that

the company has a

heavy investment infixed assets.. Fixed

assets require a

constant stream of

income to offset

their loss in value

and monthly

installment

servicing.

6 Current

Assets to

TotalAssets ratio

(CA/TA)

Current Assets

Total Assets

3,489,581

3,677,493

=0.95:1or 95%

_

Between

0.70:1

And0.80:1

95% of the

companys assets

tied up in currentassets. The

companys assets

would be very

liquid.

7 Collection

Period

(CP)

Account

Receivable

(AR) x 365

/ revenue

AR = (1,059,125

+909,854) / 2

= 984,489.5

CP =984,489.5(365)

8,146,949

=44 days

48 days 22 days

To

75 days


average. On

average, the

company is funding

the construction cost

to the client for 44days. The

recommended CPfor a commercial

construction

company is 45 days.


6/24

8 Average

age of

account

payable(AAAP)

Account

payable(AP) x

365 /(material

+ sub-contract)

AP=(1,153,331 +

1,162,007) / 2

= 1,157,669

AAAP=1,157,669

x 365 /

7,158,240

= 59 days

45 days _

Worse than industry

average of 45 days

indicating that the

company is slow topay its bills. The

average age of

account payable is

15 days greater thanits collection period-

Which is an

indication that the

company is

withholding

payments from its

suppliers and sub-

contractors evenafter the client has

paid them for the

works.

9 Assets to

Revenue

Ratio

(ARR)

Total Assets

Revenue

ATA=(3,677,493 +

3,355,689) /2

= 3,516,591

ARR=3,516,591

8,146,949

= 0.43 0r 43%

29% 19%

To

55%

Worse than industry

average but slightly

lower than upper

end of the typical

range. Its does not

appear that the

company is

performing too

much using theirassets.

10 Working

CapitalTurns

(WCT)

Revenue

WorkingCapital

AWC=ACA ACL

=(3,489,581+3,090,218) /2

(3,306,239

+2,994,464) /2

=139,548

WCT=(8,146,949-

284,514) /

139,548= 56.34

12.1 23To

6.1

WCT of the

company is muchhigher than industry

average and also

greater than the

maximum typical

range of 23 given to

a commercial


company appears

not to be properly

capitalized or under

capitalized.

11 Account

Payable to

Revenue

Ratio

(APRR)

Account

Payable

Revenue

AAP =(1,153,331+

1,162,007) /2

= 1,157,669

APRR=1,157,669

8,146,949

= 0.14Or 14%

7.9% 2.9%

To

13.0%

Greater than

industry average



a commercial


company is highly


7/24



12 Gross

Profit

Margin

(GPM)

Gross profit

Revenue

566,204

8,146,949

=0.0695 or 6.95%

17% -

Worse than industry

average. The lower

GPM suggests that

the company has ahigher cost of

construction works.

The company need

to do a bettercontrol over its

construction cost

and increase its

profit.

13 General

Overhead

Ratio

(GOR)

General

Overhead

Revenue

443,831

8,146,949

= 0.054 or 5.4%

Less than

10%

-

Within the

suggestion rate of

less than 10% given

to a commercial

construction

company. Thecompany spent

5.4% of its revenue

on general

overhead.

14 After tax

Profit

Margin

(ATPM)

Net Profit

After Tax

Revenue

29,319

8,146,949

=0.0036 or 0.36%

2.2% 8.7%

To

0.6%

Worse than industry

average and also

lower than the

minimum range of

0.6% given to a

commercial

constructioncompany.

15 Return on

Assets

(ROA)

Net Profit

After Tax

Total Assets

ATA=(3,677,493

+3,355,689 / 2

=3,516,591

ROA=29,319

3,516,591

= 0.0083 or

0.83%

6.5% 21.7%

To

2.0%

Worse than industry

average and also

below than the

minimum range of a

commercial

construction

company.

Improvement in the

aftertax profit

margin will helpincrease this

percentage.16 Return on

Equity

(ROE)

Net Profit after

tax / Equity

AE=(317,254

+361,225) / 2

= 339,239.5

ROE= 29,319

339,239.5

= 0.0864 or

8.64%

16.7% 53%

to

5.4%

The after tax return

on equity is worse

than industry


higher than

minimum range for

a commercial

construction


8/24

company.

17 Degree of

fixed

AssetsNewness

(DFAN)

Net Fixed

Assets / Total

Fixed Asset

187,912

265,471

=0.70 or 70%

-

60%

to

40%

Greater than a

target range

between 60% to40% indicates that

the company would

have a lot of new

machine, which isusually involve by

large loan payment.


9/24

SYARIKAT YUSOFF YASSIN SDN BHD

RATIOS ANALYSIS


( Industry

average)

RANGE ASSESSMENT

1 Current

Ratio(CR)

Current assets

Current

Liabilities

7,171,964

5,795,725

= 1.24:1

1.5:1 3.1:1

to

1.2:1

worse than industry

average (median)

but slightly higher

than the lower end

of the range. Strong

indication that the

company is under

capitalized and mayrun into financial

problem in future

year. Because of the

current ratio is

greater than 1.0:1,

indicating that the

company is able to

meet its short-termcash needs.

2 Quick

Ratio(QR)

Cash +account

ReceivableCurrentLiabilities

4,585,923

5,795,725= 0.79:1

1.2:1 2.1:1To0.6:1

Worse than industry

average but slightlyhigher than theminimum range of

0.6:1 given to a

commercial

construction

company. The

company with QR

less than 1.0:1 is

considered notliquid and need to

increase their cash

either through

converting its long term assets to cash

or debt financing.

3 Current

Liabilities

to Net

Worth

Ratio.

(CL/NW)

Current

Liabilities

Net Worth

5,795,725

2,421,306

= 2.4:1

1.12:1 0.32:1

To

2.4:1

Worse than industry

average. Short-term

creditors would

have more capital at

risk, which is not in

good position to go


10/24

in. The higher ratio

shows an indication

of intensive used of

suppliers and sub-

contractors.

4 Debt to

EquityRatio

(DER)

Total

LiabilitiesNet Worth

5,990,972

2,421,306= 2.47:1 1.3:1 0.5:1To

2.7:

Worse than industry

average. The highratio indicates that

the company is

highly dependent on

debt capital toperform their

business. The

company may not to

service its debt

especially during

the down turn in the

economic.

5 Fixed

Assets to

Net WorthRatio

(FA/NW)

Net Fixed

Assets

Net Worth

1,240,314

2,421,306

= 0.51:1

0.24:1

0.08:1

To

0.64:1

Worse than industry

average but still

within the typicalrange given to a

construction

company. 51% of

the companys

equity is tied up in

fixed assets. The

company has a

heavy investment in

fixed assets. Fixed

assets require aconstant stream of

income to offset

their loss in valueand monthly

installment

servicing.

6 Current

Assets to

TotalAssets ratio

(CA/TA)

Current Assets

Total Assets

7,171,964

8,412,278

=0.85:1 or85%

_

Between

0.70:1

and0.80:1

CA/TA is greater

than the suggestion

rate given to acommercial

construction

industry. 85% of the

companys assets is

tied up in current

assets. Indicates thatthe assets of the

company is

considered very

liquid.


11/24

7 CollectionPeriod

(CP)

AccountReceivable

(AR) x 365

/ revenue

AR = (3,158,056+

9,339,549) / 2

= 6,248,802.5

CP = 6,248,802.5 x365/

42,740,122

= 53.36 days

Or 53 days.

48 days 22 days

to

75 days

The CP is slightlyhigher than the

industry average but

within the typical

range given to aconstruction

industry.

The company is

funding the

construction cost to

the client for 53

days or 53 days to

collect the paymentsfrom client.

8 Average

age of

account

payable

(AAAP)

Account

payable(AP) x

365 /(material

+ sub-

contract)

AP=(4,809,942 +

11,764,035 / 2

= 8,286,988.5

AAAP=8,286,988.5

x 365 /

42,740,122

= 70.77 days

Or 71 days

45 days _

Worse than industry

average of 45 days

indicating that the

company is slow to

pay its bills. The

average age of

account payable is

18 days greater than

its collection period.

9 Assets to

Revenue

Ratio

(ARR)

Total Assets

Revenue

ATA=(8,412,278 +

15,708,772) /2

= 12,060525

ARR=12,060,525

42,740,122= 0.28 or 28%

29% 19%

To

55%

ARR of the

company is slightly

lower than the


still within thetypical range given

to a commercial

construction

industry. The

company appears to

be fairly performing

its assets.

10 Working

Capital

Turns

(WCT)

Revenue

Working

Capital

AWC=ACA ACL

=(7,171,964 +

14,363,951) /2

(5,795,725 +13,229,443) /2=1,255,373.5

WCT=42,740,122

1,255,373.5

= 34.04

12.1 23

To

6.1

WCT is greater than

the industry average


upper end of thetypical range. Thecompany is

considered under

capitalized and need

to increase the

availability of their

current assets.


12/24

11 Account

Payable to

Revenue

Ratio(APRR)

Account

Payable

Revenue

AAP =(4,491,494+

3,970,962)/2

= 4,231,228

APRR=4,231,22842,740,122

= 0.0989 or

9.89%

7.9% 2.9%

To

13.0%

Greater than


still lower than the

upper end of typicalrange between 2.9%

to 13% given to a

commercial

construction

company. The

company is highly



12 Gross

ProfitMargin

(GPM)

Gross profit

Revenue

1,721,016

42,740,122=0.0403

Or

4.03%

17% -

Worse than industry

average. The lowerGPM suggests that

the company has a

higher cost of

construction works.

The company need

to do a better

control over its

construction cost

and increase its

profit.

13 General

Overhead

Ratio(GOR)

General

Overhead

Revenue

1,023,505

42,740,122

= 0.0239Or

2.39%

Less than

10%

-

Better than the

suggested rate of

less than 10%. Thecompany appears to

be properly

managed their

overhead expenses.

14 After tax

Profit

Margin

(ATPM)

Net Profit

After Tax

Revenue

291,615

42,740,122

=0.0068

Or

0.68%

2.2% 8.7%

To

0.6%

Worse than industry


higher than the

minimum range of

0.6%.The companyneeds to works on

its profitabilityeither by cutting

costs and increasing

the profit and

overhead markup.


13/24

15 Return on

Assets

(ROA)

Net Profit

After Tax

Total Assets

ATA=12,060,525

ROA= 291,615

12,060,525=0.0241 or

2.41%

6.5% 21.7%

to

2.0%

ROA of the

company is less than

industry average for


company but well

within the range.

Improvement in

aftertax profit

margin will help

increase this

percentage.

16 Return on

Equity(ROE)

Net Profit after

tax / Equity

AE=2,421,306 +

2,129,691 / 22,275,498.5

= 0.1281

or

12.81%

16.7% 53%to

5.4%

Worse than industry

average. Needs toimprove in after

tax profit margin.

However ROE of

the company still

within the range.

17 Degree of

fixed

Assets

Newness

(DFAN)

Net Fixed

assets / Total

Fixed Assets

1,240,314

1,491,854

=0.83

Or

83%

- 60%

to

40%

Greater than a target

range between 60%

to 40% indicates

that the company

would have a lot of

new machine, whichis usually involve by

large loan payment

and interest

expenses.


14/24

HAMPARAN MEWAH SDN BHD

RATIOS ANALYSIS


( Industry

average)

RANGE ASSESSMENT

1 Current

Ratio(CR)

Current assets

CurrentLiabilities

614,203

535,334= 1.15:1

1.5:1 3.1:1to

1.2:1

Worse than industry

average (median)and slightly lower

than the minimumrange of 1.2:1 given

to a commercial

construction

industry. The

company is

considered undercapitalized.

However, CR is

still greater

than1.0:1 indicates

that the company is

able to pay its

short-term

liabilities.

2 Quick

Ratio

(QR)

Cash +account

Receivable

Current

Liabilities

460,603

535,334

= 0.86:1

1.2:1 2.1:1

to

0.6:1

Worse than industry


higher than the

minimum range of0.6:1 given to a

commercial

construction

company. The

company with QR

less than 1.0:1 is

considered not

liquid and need to

raise up its cashcapital.

3 CurrentLiabilities

to Net

Worth

Ratio.

(CL/NW)

CurrentLiabilities

Net Worth

535,334106,030

= 5.04:1

1.12:1 0.32:1

To

2.4:1

Worse than industryaverage. Short-term

creditors would


risk, which is not a

good position to go


15/24

in.

4 Debt to

Equity

Ratio(DER)

Total

Liabilities

Net Worth

535,334

106,030

= 5.04:1

1.3:1 0.5:1

To2.7:1

Worse than industry

average and out of

the range given to acommercial

construction

company. The

company is highly

dependent on debt

capital and may not


5 Fixed

Assets to

Net WorthRatio

(FA/NW)

Net Fixed

Assets

Net Worth

27,161

106,030

= 0.26:1

0.24:1

0.08:1

To

0.64:1

FA/NW of the

company is slightly

higher than theindustry average but

well within the

typical range. The

company appears to

be properly

managed their

investment in fixed

assets.

6 Current

Assets to

Total

Assets ratio

(CA/TA)

Current Assets

Total Assets

614,203

641,364

=0.95:1

Or

95%

_

Between

0.70:1

And

0.80:1

CA/TA is greater

than the suggestion

rate given to a

commercial

constructionindustry. 95% of the

companys assets

tied up in current

assets. Indicating

that the assets of the

company would be

very liquid.

7 Collection

Period

(CP)

Account

Receivable

(AR) x 365

/ revenue

AR = (306,514

+138500) / 2

= 222,507

CP =222,507(365)3,725,193

=22 days

48 days 22 days

To

75 days


average and equal

with the minimum

typical range. It isalso below the

recommended CP of45 days. The

company is funding


to the client for 22

days.

8 Average

age of

account

Account

payable(AP) x

365 /(material

AP=(312,740 +

583,415) / 2

= 448,077.5

45 days _

Slightly higher than

industry average of

45 days indicating


16/24

payable

(AAAP)

+ sub-

contract) AAAP=448,077.5

x 365 /

3,492,929

=46.82 or

47days

that the company is

slow to pay its

bills. The AAAP is


collection period.

9 Assets to

RevenueRatio

(ARR)

Total Assets

Revenue

ATA=(641,364 +

720,978) /2= 681,171

ARR= 681,171

3,725,193

= 0.18 0r 18%

29% 19%To

55%

The companys

ARR is lower thanindustry average

and also below than

the lower end of the

range. Companies

with ARR below the

lower end of the

range are

underutilizing theirassets.

10 WorkingCapital

Turns

(WCT)

RevenueWorking

Capital

AWC=ACA ACL=(614,203

+709,731) /2

(535,334

+604,188) /2

=92,207.5

WCT=(3,725,193-

3,492,929) /

92,207.5

= 2.52

12.1:1 23:1

To

6.1:1

Worse than industryaverage and also

less than the

minimum typical

range of 6.1 given to

a commercial

construction

industry. The

company appears

not properly

capitalized or overcapitalized.

11 Account

Payable to

Revenue

Ratio

(APRR)

Account

Payable

Revenue

AAP =(312,740+

583,415) /2

= 448,077.5

APRR=448,0775.5

3,725,193= 0.12

Or 12%

7.9% 2.9%

To

13.0%

Greater than

industry average

and slightly lower

than upper end of

the range given to acommercial

construction

industry. The

company is highly


and sub-contractors.12 Gross

Profit

Margin

(GPM)

Gross profit

Revenue

168,981

3,725,193

=0.045

or 4.5%

17% -

Worse than industry

average. The lower

GPM suggests that

the company has a

higher cost of

construction works.The company need

to do a better


17/24

control over its

construction cost

and increase its

profit.

13 GeneralOverhead

Ratio

(GOR)

GeneralOverhead

Revenue

180,0533,725,193

= 0.048

or 4.8%

Less than

10%

-Better than thesuggestion rate of

less than 10%. The

company appears to

be properly

managed their

overhead costs.

14 After tax

Profit

Margin

(ATPM)

Net Profit

After Tax

Revenue

(10,763)

3,725,193

=(0.0029)

or (0.29%)

2.2% 8.7%

To

0.6%

Worse than industry

average. The

company running

their businessoperation under lost.

15 Return on

Assets

(ROA)

Net Profit

After Tax

Total Assets

ATA=(641,364

+720,978 / 2

=681,171ROA=(10,763)

681,171

= (0.0158) or

(1.58%)

6.5% 21.7%

To2.0%

ROA of the

company shows a

negative trend of(1.58%) due to

ATPM of the

company is

negative.

Improvement in the

aftertax profit

margin will help

increase this

percentage.16 Return on

Equity

(ROE)

Net Profit aftertax / Equity

AE=(106,030+116,793) / 2

= 222,823

ROE= (10,763)

111,411.5

= (0.0966) or

(9.66%)

16.7% 53%

to

5.4%

Worse than industryaverage. Needs to

improve in the after

tax profit margin.

17 Degree of

fixed

Assets

Newness

Net Fixed

Assets / Total

Fixed Asset

27,161

31,747

=0.85 or 85%

-

60%

to

40%

greater than the

range given to a

commercial

construction

industry. However

its only involved avery small amount

of assets transaction.


18/24

VILLA EMAS SDN BHD

RATIOS ANALYSIS


( Industry

average)

RANGE ASSESSMENT

1 CurrentRatio(CR)

Current assetsCurrent

Liabilities

780,593387,728

= 2.01:1

1.5:1 3.1:1

To

1.2:1

Worse than industryaverage. The

companys CR

below 1.5:1 is

considered under

capitalized and may

run into financial

problem. Need to

increase cash capital

through debtfinancing or

converting of fixed

assets to cash.

2 Quick Ratio

(QR)

Cash +accountReceivable

Current

Liabilities

318,351387,728

= 0.82:1

1.2:1 2.1:1

To

0.6:1

Worse than industryaverage and also

lower than the

minimum range

given to a

commercial


company with QR

less than one is

considered not

liquid. The company

will need to raise up

their cash eitherthrough debt

financing or

converting theirlong term assets to

cash.

3 Current

Liabilities

to Net

Worth

Current

Liabilities

Net Worth

387,728

412,752

=0.94:1

1.12:1 0.32:1

To

2.4:1

Worse than industry

average and higher

than upper limit of



19/24

Ratio.

(CL/NW)

commercial

construction

industry. Short-term

creditors would


risk which is not in

good position to goin.

4 Debt to

EquityRatio

(DER)

Total

LiabilitiesNet Worth

391,123

412,752=0.95:1

1.3:1 0.5:1To

2.7:1

Worse than industry

average and out ofthe range given to a

commercial

construction

company. The

company is highly

dependent on debt

capital. The ratio

indicates that thecompany may not


5 Fixed

Assets to

Net Worth

Ratio

(FA/NW)

Net Fixed

Assets

Net Worth

23,282

412,752

=0.0564

or 5.64%

0.24:1

0.08:1

To

0.64:1

Worse than industry

average but well

within the typical

range. The high

ratio indicates that

the company has a

heavy investment in

fixed assets.. Fixed

assets require a

constant stream ofincome to offset

their loss in value

and monthlyinstallment

servicing.

6 Current

Assets to

Total

Assets ratio

(CA/TA)

Current Assets

Total Assets

780,593

803,875

=0.97

or 97%

_

Between

0.70

And

0.80

95% of the

companys assets

tied up in current

assets. The

companys assetswould be very

liquid.

7 CollectionPeriod

(CP)

AccountReceivable

(AR) x 365/ revenue

CP =469,336 (365)

2,337,346=

48 days 22 days

To75 days

Better than industryaverage. On

average, thecompany is funding


to the client for 44

days. The

recommended CP

for a commercialconstruction

company is 45 days.


20/24

8 Averageage of

account

payable

(AAAP)

Accountpayable(AP) x

365 /(material

+ sub-

contract)

AP=(1,153,331 +1,162,007) / 2

= 1,157,669

AAAP=1,157,669

x 365 /

7,158,240

= 59 days

45 days _ Worse than industryaverage of 45 days

indicating that the

company is slow to

pay its bills. The

average age of

account payable is


its collection period-Which is an

indication that the

company is

withholding

payments from its

suppliers and sub-

contractors even

after the client haspaid them for the

works.

9 Assets to

RevenueRatio

(ARR)

Total Assets

Revenue

ATA=(803,875 +

437,842) /2= 620,858.5

ARR=620,858.5

2,337,346= 0.2656

Or 26.56%

29% 19%To

55%

Worse than industry

average but slightlylower than upper

end of the typical

range. Its does notappear that the

company is

performing too

much using their

assets.

10 Working

CapitalTurns

(WCT)

Revenue

WorkingCapital

AWC=ACA ACL

=(780,593+437,842) /2

(387,728

+38,115) /2

=396,296

WCT=2,337,346

396,296= 5.89:1

12.1 23:1To

6.1:1

WCT of the

company is muchhigher than industry

average and also

greater than the

maximum typical

range of 23 given to


industry. The

company appears

not to be properlycapitalized or under

capitalized.

11 Account Account Greater than


21/24

Payable to

Revenue

Ratio

(APRR)

Payable

Revenue

APRR= 204,956

2,337,346

= 0.0876

Or 8.76%

7.9% 2.9%

To

13.0%

industry average



a commercial

construction

industry. The

company is highlyfunding by suppliers


12 GrossProfit

Margin

(GPM)

Gross profitRevenue

144,5083,337,346

=0.618 or

6.18%

17% -Worse than industryaverage. The lower

GPM suggests that

the company has a

higher cost of

construction works.

The company need

to do a better

control over itsconstruction cost

and increase its

profit.

13 General

Overhead

Ratio

(GOR)

General

Overhead

Revenue

122,384

2,337,346

= 0.524 or

5,24%

Less than

10%

-

Within the

suggestion rate of

less than 10% given

to a commercial

construction

company. The

company spent

5.4% of its revenue

on generaloverhead.

14 After tax

Profit

Margin

(ATPM)

Net Profit

After Tax

Revenue

13,025

2,337,346

=0.0056

Or 0.56%

2.2% 8.7%

To

0.6%

Worse than industry

average and also

lower than the

minimum range of

0.6% for a

commercial


15 Return on

Assets

(ROA)

Net Profit

After Tax

Total Assets

ATA=(803,875

+437,842 / 2

=620,858.5ROA=13,025

620,858.5= 0.0209

2.09%

6.5% 21.7%

To2.0%

Worse than industry

average and also

below than theminimum range of a

commercialconstruction

company.

Improvement in the

aftertax profit

margin will help

increase thispercentage.

16 Return on Net Profit after AE=(412,752 The after tax return


22/24

Equity

(ROE)

tax / Equity +399,727) / 2

= 406,239.5

ROE= 13,025

406,239.5

= 0.032

Or 3.2%%

16.7% 53%

to

5.4%

on equity is worse

than industry


higher than

minimum range for

a commercial


17 Degree of

fixed

Assets

Newness

Net Fixed

Assets / Total

Fixed Asset

23,282

28,338

=0.82

or 82%

- 60%

to

40%

Greater than target

range between 60%

to 40% indicates

that the company

would have a lot of

new machine, which

is usually involve by

large loan payment.


23/24

Table 1.1 Summary of Financial Ratio Analysis

SUMMARY OF FINANCIAL RATIO ANALYSIS

No Ratios Company

A

Company

B

Company

C

Company

X

Company

Y

Company

Z

Median Range

1

CR 2.3:1 1.05:1 1.24:1 1.15:1 2.01:1 1.5:1

3.1

to

1.2

2

QR 0.83:1 0.45:1 0.79:1 0.86:1 0.82:1 1.2:1

2.1

To

0.6

3

CL/NW 34.74:1 10.39:1 2.4:1 5.04:1 0.94:1 1.12:1

0.32

To

2.4

4

DER 103.38:1 10.56:1 2.47:1 5.04:1 0.95:1 1.3

0.5

To

2.7

5

FA/NW 24.16:1 0.59:1 0.51:1 0.26:1 0.056:1 0.24

0.08

To

0.64

6

CA/TA 0.765:1 0.95:1 0.85:1 0.95:1 0.97:1 -

0.70

To

0.80

7

CP 49 days 44 days 53 days 22 days

48 days 22 days

To

75 days

8

AAAP 73 days 59 days 71 days 47 days 59 days

45 days -

9

ARR 83% 43% 28% 18% 26.56% 29%

19%

To

55%

10

WCT 4.34:1 56.34:1 34.04:1 2.52:1 5.89:1 12.1

23

To

6.1

11

APRR 18.85% 14% 9.89% 12% 8.76% 7.9%

2.9%

To13.0%

12

GPM 5.2% 6.95% 4.03% 4.5% 6.18% 17%

_

13

GOR

11% 5.4% 2.39% 4.85% 5.24%

Less

than

10%

-

14

ATPM (5.06%) 0.36% 0.68% (0.029%) 0.056% 2.2%

8.7%

To


24/24

0.6%

15

ROA (6.08%) 0.83% 2.41% (1.58%) 2.09% 6.5%

21.7%

To

2.0%

16ROE (142.52%) 8.64% 12.81% (9.66%) 3.2% 16.7%

53%To

5.4%17

DFAN 93% 70% 83% 85% 82% -

60%

To

40%

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