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MASTER IN ISLAMIC FINANCE PRACTICE (MIFP)

FINANCIAL AND MANAGERIAL ACCOUNTING


COURSE CODE: AC5013
SEMESTER SEPTEMBER 2017

ASSIGNMENT 1 (FINANCIAL REPORTING AND


FINACIAL STATEMENTS ANALYSIS)

NAME: NOR MOHAMED OSMAN

STUDENT ID: 1500136

LECTURER: PROF DR. ZULKARNAIN


DATE: 23/11/2017
Introduction

Financial Statement Analysis is a method of reviewing and analyzing a company’s accounting


reports (financial statements) in order to measure its past, present or projected future
performance. This process of reviewing the financial statements allows for better economic
decision making. Financial statements provide an account of a company’s past performance, a
picture of its current financial strength and a glimpse into the future potential of a firm. So that I
have selected five companies from public listed companies with the same industry. And I will
apply the required information in my selected of five companies like: to do and vertical analysis
and horizontal analysis and also financial ratio of all five companies.

Down here, I am going to display the five companies that I am going to apply the required
information in the above. The following companies are the selected of my choice of selecting the
public listed companies are:

1. ABLE GROUP BERHAD

2. THONG GUAN INDUSTRIES BERHAD

3. ADVENTA BERHAD

4. ANN JOO RESOURCES

5. ANCOM BERHAD
ABLE GROUP BERHAD

Company (1)

The vertical analysis of ABLE GROUP financial statement shows the relationship of each item
to its base amount, which is the 100% figure. Every other item on the statement is then reported
as a percentage of that base. For the income statement, a net sale is the base.

Income Statement for the Year Ended 31 December 2016

2016
Dollar Amount in millions Amount Percent of Total
Revenues $9,894 100%
Cost of sales (8,473) 85.6
Gross Profit $1,421 14.4
Other income $291 2.9
Selling and marketing expense (20) 0.2
Administrative expense (2,397) 24.2
Other expense (26) 0.3
Finance costs (138) 1.4
Loss before tax (869) (8.8)
Income tax - -
Net loss (869) (8.8)

Balance sheet for the Year Ended 31 December 2016

ABLE GROUP BERHAD

2016
Dollar Amount in millions Amount Percent of Total
Asset
Current Asset
Inventories 3,342 6.8%
Property Development Cost 35,839 74.9
Amount owing by contract customers 1,753 3.5
Trade and other receivables 3,658 7.4
Amount owing by subsidiaries - -
Current tax assets 15 0.03
Deposits placed with licensed banks 3,051 6.2
Cash and bank balances 173 0.35
Total Current Assets 47,831 96.6%
Property Plant and Equipment 1,009 2
Intangible Asset - -
Investment Property 659 1.3
Total noncurrent Assets 1,668 3.4
Total Assets 49,499 100%
Liabilities
Current Liabilities
Amount owing to contract customers 6 0.01
Trade and Other Payable 2,739 5.5
Loan and borrowings 898 1.8
Total current liabilities 3,643 7.4
Long term Liabilities
Loan and borrowings 28 0.06
Total long term liabilities 28 0.06
Total Liabilities 3,671 7.4
Shareholder’s Equity
Share capital 39,585 80%
Other reserves 569 1.1
Retained profits 5,674 11.5
Total stockholder’s Equity 45,828 92.6
Total Liabilities & Equity 49,499 100%

Company (2

THONG GUAN INDUSTRIES BERHAD

The vertical analysis of THONG GUAN financial statement shows the relationship of each item
to its base amount, which is the 100% figure. Every other item on the statement is then reported
as a percentage of that base. For the income statement, a net sale is the base.

Income Statement for the Year Ended 31 December 2016

2016
Dollar Amount in millions Amount Percent of Total
Revenues $742,868 100%
Cost of sale s (624,819) 84%
Gross Profit $118,049 15.9%
Other income $9,789 1.3%
Administrative expense (27,077) 3.6%
Selling and marketing expense (29,434) 4%
Other expenses (3,531) 0.5%
Result from operating activities 67,796 9.1%
Interest income 1,715 0.2%
Finance costs (1,367) 0.2%
Profit before tax 68,144 9.2%
Tax Expense (10,716) 1.4%
Profit for the financial year 57,428 7.7%
Total Other comprehensive income for the financial year (1,834) 0.2%
Total comprehensive income for the financial year $55,594 7.5%
Balance sheet for the Year Ended 31 December 2016

THONG GUAN INDUSTRIES BERHAD

2016
Dollar Amount in millions Amount Percent of Total
Asset
None Current Asset
Property, plant and equipment $138,905 22.4%
Prepaid lease payments 12,684 2%
Intangible asset 222 0.04%
Investment in subsidiaries - -
Other investments 567 0.09%
Deferred tax asset 1,113 0.2%
Fixed deposit with a licensed bank 30 0.005%
Total None Current Asset $153,521 24.8%
Current Asset
Inventories 157,059 27.4%
Current tax assets 587
Trade and other receivables 156,034 15.1%
Cash and cash equivalents 152,610 4.7%
Total Current Assets 466,290 60.6%
Total Assets 619,811 100%
Liabilities
Current Liabilities
Loans and borrowings 45,368 7.4%
Trade and Other Payable 117,468 19%
Current Tax Payable 889 0.1%
Total current liabilities 163,725 26.4%
None Current Liability
Deferred tax liabilities 6,431 1%%
Loans and borrowings 11,372 1.8%
Total None Current Liabilities 17,803 2.9%
Total Liabilities 181,528 29.3%
Shareholder’s Equity
Share capital 118,307 19%
Reverse acquisition reserve 311,606 50.3%
Total Equity attributable to owners of the Company 429,913 69.4%
Non-controlling interests 8,370 1.4%
Total stockholder’s Equity 438,283 70.7%
Total Liabilities & Equity 619,811 100%
Company (3)

The vertical analysis of a ADVENTA BERHAD financial statement shows the relationship of
each item to its base amount, which is the 100% figure. Every other item on the statement is then
reported as a percentage of that base. For the income statement, a net sale is the base.

Income Statement for the Year Ended 31 December 2016

2016
Dollar Amount in millions Amount Percent of Total
Revenues $39,931 100%
Cost of sales (25,319) 63.4
Gross Profit 14,612 36.6
Other income 694 1.7
Administrative expense (4,948) 12.4
Selling and marketing expense (3,118) 7.8
Other Operating Expense (3,254) 8.4
Finance costs (1,588) 4
Profit/loss before tax 2,398 6
Income Tax Expense (1,714) 4
Profit/loss for the year, representing tool 684 1.7
comprehensive income/loss financial year
Profit/loss attribute to:
Owners of parent 684 1.7
Total comprehensive income $684 1.7
Balance sheet for ADVENTA BERHAD

2016
Dollar Amount in millions Amount Percent of Total
Asset
None Current Asset
Property, plant and equipment 53,595 39.7
Investment - -
Intangible Assets 31,592 23.4
Deferred tax assets 424 0.3
Total None Current Asset 85,611 63.4
Current Asset
Inventories 15,318 11.3
Trade and other receivables 12,378 9.2
Other current assets 825 0.6
Tax recoverable 4 0.003
Cash and bank balances 21,001 15.5
Total Current Assets 49,528,256 36.6
Total Assets 135,140,216 100%
Liabilities
Current Liabilities
Trade and Other Payable 12,976,419 9.6
Income tax payable 122,108 0.09
Loan and borrowing 9,403,471 7
Total current liabilities 22,501,998 16.7
None Current Liability
Loss and borrowing 31,531,615 23.3
Total None Current Liabilities 31,531,615 23.3
Total Liabilities 54,033,613 40
Shareholder’s Equity
Share capital 53,475,020 39.6
Share premium 4,829,789 3.6
Retained earning 22,801,794 16.9
Total stockholder’s Equity 81,106,603 60
Total Liabilities & Equity 135,140,216 100%
Company (4)

The vertical analysis of a ANN JOO RESOURCES statement shows the relationship of each
item to its base amount, which is the 100% figure. Every other item on the statement is then
reported as a percentage of that base. For the income statement, a net sale is the base.

Income Statement for the Year Ended 31 December 2016

2016
Dollar Amount in millions Amount Percent of Total
Revenues 1,870,050 100%
Cost of sales (1,505,322) 80.5
Gross Profit 364,728 19.5
Other income 2,428 0.1
Administrative expense (76,637) 4.1
Distribution Expense (40,841) 2.2
Other Operating Expense (6,250) 0.3
Results from operating activities 243,428 13
Interest income 2,228 0.12
Finance costs (43,516) 2.3
Operating Profit 202,140 10.8
Share of results of associates (12)
Profit/(Loss) before tax 202,128 10.8
Income Tax Expense (35,353) 1.9
Profit/loss for the year 166,775 8.9
Exchange differences on translating foreign operations
Change in fair value of equity securities classified as
available-for-sale 870 0.05
Net movement on cash flow hedges 31 0.002
Foreign currency forward contracts (223) 0.01
Other comprehensive income for the year, net of tax 678 0.04
Total comprehensive income for the year 167,453 9%
BALANCE SHEET FOR ANN JOO RESOURCES

2016
Dollar Amount in millions Amount Percent of Total
Asset
None Current Asset
Property, plant and equipment 1,019,188 43.9
Prepaid lease payments 10,527 0.5
Investment properties 4,011 0.2
Intangible Assets 7,468 0.3
Investment in subsidiaries - -
Investment in associate 486 0.02
Other Investment 60 0.003
Deferred tax assets 50,969 2.2
Total None Current Asset 1,092,709 47.1
Current Asset
Inventories 830,764 35.8
Receivables and prepayments 336,276 14.5
Current tax assets 6,138 0.3
Cash and bank balances 54,941 2.4
Total Current Assets 1,228,119 52.9
Total Assets 2,320,828 100%
Liabilities
Current Liabilities
Loan and borrowing 956,657 41.2
Payable and accrual 210,828 9.1
Derivative liabilities 221 0.01
Current tax liabilities 179 0.008
Total current liabilities 1,167,885 50.3
None Current Liability
Loss and borrowing 1,831 0.08
RCPS - Liability component 58,610 2.5
Provision for retirement benefits 6,307 0.3
Deferred tax liabilities 18,056 0.8
Total None Current Liabilities 84,804 3.7
Total Liabilities 1,252,689 54
Shareholder’s Equity
Share capital 522,842 23.8
Treasury shares (71,389) 3.1
Redeemable Convertible Cumulative Preference 3,926 0.2
Shares (“RCPS”) - Equity component
Other reserves 86,920 3.7
Retained earnings 525,840 22.7
Total stockholder’s Equity 1,068,139 46
Total Liabilities & Equity 2,320,828 100%
Company (5)

The vertical analysis of ANCOM BERHAD financial statement shows the relationship of each
item to its base amount, which is the 100% figure. Every other item on the statement is then
reported as a percentage of that base. For the income statement, a net sale is the base.

Income Statement for the Year Ended 31 December 2016

2016
Dollar Amount in millions Amount Percent of Total
Revenues 1,509,312 100%
Cost of sales (1,321,177) 87.5
Gross Profit 188,135 12.5
Other operating income 23,503 1.6
Distribution Cost (73,236) 4.9
Administrative expense (96,546) 6.4
Other Operating Expense (9,413) 0.6
Finance costs (13,038) 0.9
Share of results of associates, net of tax (1,643) 0.1
Share of results of joint ventures, net of tax (540) 0.04
Profit/(Loss) before tax 17,222 1.1
Taxation (14,880) 1
Profit for the financial year 2,342 0.2

Balance sheet for the Year Ended 31 December 2016

ANCOM BERHAD

2016
Dollar Amount in millions Amount Percent of Total
Asset
None Current Asset
Property, plant and equipment 235,551 25.8
Investment properties 371 0.04
Investment in subsidiaries - -
Investment in associate 3,023 0.3
Investment in joint venture - -
Other Investment 692 0.08
Intangible assets 4,499 0.5
Goodwill on consolidation 96,700 10.6
Deferred tax assets 26,230 2.9
Total None Current Asset 367,066 40.2
Non-current assets held for sale 51 0.006
Current Asset
Inventories 119,846 13.1
Trade and other receivables 315,773 34.6
Amounts owing by associates 5,685 0.6
Amounts owing by joint ventures 56 0.006
Current tax assets 3,291 0.4
Other investments 1,179 0.1
Cash and bank balances 99,835 11
Total Current Assets 545,665 60
Total Assets 912,782 100%
Liabilities
Current Liabilities
Borrowing 213,683 23.4
Trade and other Payable 222,535 24.4
Amounts owing to associates 101 0.01
Derivative liabilities -
Current tax liabilities 4,730 0.5
Total current liabilities 441,049 48.3
None Current Liability
Borrowing 15,855 1.7
Provision for retirement benefits 3,808 0.4
Deferred tax liabilities 10,572 1.2
Total None Current Liabilities 30,808 3.4
Total Liabilities 471,284 51.6
Shareholder’s Equity
Share capital 218,956 24
Treasury shares (2,377) 0.3
Reserve 65,906 7.2
Non-controlling interests 159,013 17.4
Total stockholder’s Equity 441,498 48.4
Total Liabilities & Equity 912,782 100%
Perform a horizontal analysis for (5 years: 2016, 2015, 2014, 2013, 2012) on items of Statement
of Income (Profit & Loss) and Statement of Financial Position.

2016 2015 2014 2013 2012


Dollar Amount in Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
millions
Revenues $9,894 173% $27,726 1386% $18,749 1228% $5,141 (109) % $5,699 100%
Cost of sales (8,473) 195% (25,294) 1481% (16,111) 1270% (3,763) (113) % (4,347) 100%
Gross Profit $1,421 105% 2,432 179% 2,638 195% 1,378 102% 1,352 100%
Other income $291 (195)% 355 (193)% 589 (189)% 948 (183) % 5,722 100%
Selling M. Exp (20) (120)% (18) (128)% (12) (152)% (15) (140) % (25) 100%
Administrative (2,397) (115)% (2,814) (107)% (2,756) (102) (2,540) (110) % (2,836) 100%
expense
Other expense (26) (199)% (802) (189)% (37) (199)% (666) (191)% (7,364) 100%
Finance costs (138) (136) (578) 1113% (177) (134)% (144) (147)% (271) 100%
Profit Loss (869) (174)% (1,425) (158)% 245 (192)% (1,039) (169)% (3,422) 100%
before taxation
Discontinued Op 100%
Loss on Dis. Op. - - - - - - - - (5,035) 100%
net of tax
Net income/ loss (869) (189)% (1,425) (183)% 245 (197)% (1,039) (187)% (8,457) 100%

In one horizontal analysis approach, a base year is selected and the dollar amount of each
financial statement item in subsequent years is converted to a percentage of the base year dollar
amount. Assuming 2012 is the base year, 2013, 2014, 2015 and 2016 revenues were (109%,
1228%, 1386% and 173% of the base year amount, as shown in the following calculations:

2013 Revenue, $5141 / 2012 Revenue, $5,699 = (109) %

2014Revenue, $18,749/2012 Revenue, $5,699 = 1228%


Similar computations would be made for the remaining income statement items as shown below:

2015 Revenue, $ $27,726 / Revenue 2012 $5,699 = 1386%

2016 Revenue, $9,894 / Revenue 2012 $5,699 = 173% and also same the reset of it.
Balance sheet for the Year Ended 31 December 2016

ABLE GROUP BERHAD

2016 2015 2014 2013 2012


Dollar Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
Amount in
millions
Asset
Current Asset
Inventories $3,342 (25.4)% 3,598 (19.7) $4,314 (3.7)% $4,502 0.47% 4,481 100%
Property 35,839 100% 33,943 100% 32,075 100% 29,736 100 - -
DCost
Amount $1,753 87,550% 5,857 292,750% 2,548 127,300% 278 13,800% 2 100%
owing by
contract Cu.
Trade & 3,658 (21)% 5,634 21.7% 8,840 91% 3,980 (14)% 4,628 100%
other
receivables
Current tax 15 (80.3)% 7 (90.8)% 95 25% 86 13.2% 76 100%
assets
Deposits 3,051 (74.4)% 5,164 (56.6)% 4,765 (60)% 8,578 (27.9)% 11,897 100%
placed with
licensed
banks
Cash & bank 173 (60.5)% 262 (40.2)% $640 46.1% 601 37.2% 438 100%
balances
Total Current 47,831 122.2% $54,465 153% $53,277 11.52% $47,761 121.9% $21,522 100%
Assets
Property 1,009 (13.8)% 1,165 (0.5)% 1,275 8.9% 1,078 (7.9)% 1,171 100%
Plant and
Equipment
Land held for 28,202 100%
property
development
Investment 659 (72.2)% 675 (71.5)% 691 (70.8)% 707 (70.2)% 2,370 100%
Property
Total 1,668 (94.7)% 1,840 (94.2)% 1,966 (93.8)% 1,785 (94.4)% $31,740 100%
noncurrent
Assets
Total Assets 49,499 (7.1)% $56,305 5.7% 55,243 3.71% 49,546 (7)% $53,265 100%
Liabilities
Current
Liabilities
Amount 6 (98.6)% 30 (93)% 211 (50.8)% 160 (62.7)% 429 100%
owing to
contract
customers
Trade and 2,739 49.3% 3,578 95% 2,059 12.3% 764 (58.3)% 1,834 100%
Other
Payable
Loan and 898 8.4% 5,948 641.6% 4,775 495.3% 737 (8.1)% 802 100%
borrowings
Total current $3,643 18.9% $9,556 211.8% $7,045 211.8% $1,661 (45.8)% $3,065 100%
liabilities
Long term
Liabilities
Loan and 28 (97.8)% 51 (96)% 73 (94.2)% 5 (99.6)% 1,252 100%
borrowings
Total long 28 (97.8)% 51 (96)% 73 (94.2)% 5 (99.6)% 1,252 100%
term
liabilities
Total 3,671 (15)% 9,607 122.5% $7,118 64.9% $1,666 (61.4)% $4,317 100%
Liabilities
Shareholder’s
Equity
Share capital 39,585 0% 39,585 0% 39,585 0% 39,585 0% 39,585 100%
Other 569 (5.3)% 570 (5.2)% 572 572 (4.8)% 601 100%
reserves
Retained 5,674 (35.2)% 6,543 (25.3%) 7,968 (9.1)% 7,723 (11.9)% 8,762 100%
profits
Total 45,828 (6.4)% 46,698 (4.6)% 48,125 (1.7)% 47,880 (2.2)% 48,948 100%
stockholder’s
Equity
Total 49,499 (7.1) $56305 5.7% $55,243 3.7% 49,546 (7)% $53,265 100%
Liabilities &
Equity

Perform a horizontal analysis for (5 years: 2016, 2015, 2014, 2013, 2012) on items of Statement
of Income (Profit & Loss) and Statement of Financial Position.

THONG GUAN INDUSTRIES BERHAD

2016 2015 2014 2013 2012


Dollar Amount Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
in millions
Revenues $742,868 17.7% 710,998 12.6% 740,227 17.3% 720,276 14.1% 631,193 100%
Cost of sales (624,819) 11.2% (604,990) 7.7% (661,869) 17.8% (644,767) 14.7% (561,945) 100%
Gross Profit $118,049 70.5% 106,008 53.1% 78,358 13.2% 75,509 9% 69,247 100%
Other income $9,789 121.6% 5,496 24.% 2,224 (49.7% 4,247 (3.9)% 4,418 100%
Administrativ (27,077) 25.7% (25,234) 17.1% (24,525) 13.8% (22,843) 6% (21,545) 100%
e expense
Selling and (29,434) 39.9% (26,744) 27.1% (23,361) 11% (21,425) 1.8% (21,045) 100%
marketing
expense
Other (3,531) 126.2% 17,140) 998% (13,353) 755.4% (3,471) 122.4% (1,561,) 100%
expenses
Result from 67,796 129.7% 42,386 43.6% 19,343 (34.5% 32,017 8.5% 29,512 100%
operating
activities
Interest 1,715 178% 2,069 235.3% 622 0.8% 726 17.7% 617 100%
income
Finance costs (1,367) 64.3% (1,330) 59.9% (1,146) 37.7% (906) 8.9% (832) 100%
Profit before 68,144 132.6% 43,125 47.2% 18,819 (35.8% 31,837 8.7% 29,297 100%
tax
Tax Expense (10,716) 724.9% (3,469) 167% (421) (67.6% (2,997) 130.7% (1,299) 100%
Profit for the 57,428 105.1% 39,656 41.6% 18,398 (34.3% 28,840 3% 27,998 100%
financial year
Total Other (1,834) 48.7% 13,319 980.2% 3,311 168.5% 6,948 463.5% (1,233) 100%
comprehensiv
e income for
the financial
year
Total $55,594 107.7% 52,975 97.9% 21,709 (18.9% 35,788 33.7% 26,764 100%
comprehensiv
e income for
the financial
year
BALANCE SHEET OF THONG GUAN INDUSTRIES BERHAD

2016 2015 2014 2013 2012


Dollar Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
Amount in
millions
Asset
None Current
Asset
Property, $138,905 27.2% $133,187 22% $123,583 13.2% 111,515 2.15% 109,164 100%
plant and
equipment
Prepaid lease 12,684 13.4% 12,825 14.7% 11,954 6.9% 11,381 1.8% 11,183 100%
payments
Intangible 222 % - - - - 100%
asset
Investment in - - - 100%
subsidiaries
Other 567 (65)% 567 (65)% 348 (78.6)% 1,016 (37.4)% 1,623 100%
investments
Deferred tax 1,113 - 3,850 - 3,941 - 788 - - 100%
asset
Fixed deposit 30 - 30 - 30 - - - - 100%
with a
licensed bank
Total None $153,521 25.9% 150,459 23.4% 139,856 14.7% 124,700 2.2% 121,970 100%
Current Asset
Current Asset
Other Innvest - - 2,523 - 6,474 - 12,700 - - 100%
Inventories 157,059 40.8% 158,618 42.2% 192,830 72.8% 130,291 16.8% 111,582 100%
Trade and 156,034 92.9% 122,087 50.9% 114,936 42.2% 108,260 33.8% 80,900 100%
other
receivables
Current tax 587 2.4% 845 47.5% 2,080 263% 2,121 270.2% 573 100%
assets
Cash and 152,610 93.2% 103,896 31.5% 91,560 15.9% 70,250 (11)% 79,010 100%
cash
equivalents
Total Current 466,290 71.4% 387,969 42.6% 407,880 49.9% 323,622 19% 272,065 100%
Assets
Total Assets 619,811 57.3% 538,428 36.6% 547,736 39% 447,534 13.6% 394,035 100%
Liabilities
Current
Liabilities
Loans and 45,368 39.8% 34,758 7.1% 76,324 135.% 42,233 30.1% 32,460 100%
borrowings
Trade and 117,468 47.1% 84,694 6% 98,171 22.9% 97,873 22.5% 79,870 100%
Other
Payable
Current Tax 889 47.2% 234 61.3% 55 90.9% 535 11.4% 604 100%
Payable
Total current 163,725 45% 119,686 6% 174,550 54.6% 140,641 24.5% 112,934 100%
liabilities
None Current
Liability
Loans and 11,372 11.9% 16,834 65.6% 20,559 102.2% 7,424 (27)% 10,167 100%
borrowings
Deferred tax 6,431 3.1% 5,412 (13.2)% 5,135 (17.7)% 6,348 1.8% 6,237 100%
liabilities
Total None 17,803 8.5% 22,246 35.6% 25,694 56.6% 13,772 (16)% 16,404 100%
Current
Liabilities
Total 181,528 40.4% 141,932 9.7% 200,244 54.8% 154,413 19.4% 129,338 100%
Liabilities
Shareholder’s
Equity
Share capital 118,307 12.5% 105,212 0.007% 105,212 0.007% 105,205 100% 105,205 100%
Reverse 311,606 99% 284,488 81.7% 236,867 51.3% 184,318 17.7% 156,554 100%
acquisition
reserve
Total Equity 429,913 64.2% 389,700 48.9% 342,079 30.7% 289,523 10.6% 261,759 100%
attributable
to owners of
the Company
Non- 8,370 184.9% 6,796 131.3% 5,413 84.2% 3,598 22.5% 2,938 100%
controlling
interests
Total 438,283 65.6% 396,496 49.8% 347,492 31.3% 293,121 10.7% 264,697 100%
stockholder’s
Equity
Total 619,811 57.3% 538,428 36.6% 547,736 39% 447,534 13.6% 394,035 100%
Liabilities &
Equity
Perform a horizontal analysis for (5 years: 2016, 2015, 2014, 2013, 2012) on items of Statement
of Income (Profit & Loss) and Statement of Financial Position.

ADVENTA BERHAD

2016 2015 2014 2013 2012


Dollar Amount Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
in millions
Revenues $39,931 181.3% $41,881 195% 34,796 145.2% 27,376 92.9% 14,193 100%
Cost of sales (25,319) 195.2% (27,195) 217% (19,408 126.3% (16,084) 87.5% (8,578 100%
)
Gross Profit 14,612 160.3% 14,686 161.5% 15,388 174.1% 11,291 101.1% 5,614 100%
Other income 694 3982.4 665 3811.8 485 2752.9 77,382 455088 17 100%
% % % .2%
Administrativ (4,948) 250.7% (4,112) 191.4% (3,800) 169.3% (3,031) 3811.8 1,411 100%
e expense %
Selling and (3,118) 664.2% (3,703) 653.2% (3,073) 653.2% (486) 19.1 408 100%
marketing
expense
Other (3,254) 179.3% (1,701) 46% (1,918 64.8% (1,531) 31.4% 1,165 100%
Operating
Expense
Finance costs (1,588) (40)% (978) (63)% (434) (83.6% (627) (76.3% 2,647 100%
Profit/loss 2,398 413.5% 4,858 940.3% 6,646 1323.1 82,996 17672. 467 100%
before tax % 2%
Income Tax (1,714) (21.4) (1,768) (18.9)% (2,183) 0.14% (1,200) (50)% 2,180 100%
Expense %
Profit/loss for 684 (17.7) 3,090 271.8% 4,463 437% 81,795 9743% (831) 100%
the year, %
Profit/loss 100%
attribute to:
Owners of 684 (49.3) 3,090 129.2% 4,463 231% 583 (56.8) 1,348 100%
parent % %
Profit from - - - - - - - - 24,147 100%
discontinued
operations,
net of tax
Profit net of - - - - - - - - 25,496, 100%
tax
Other 2,687 100%
comprehensiv
e income
Total $684 (97)% 3,090 (86.5)% 4,463 (80.4) 82,379 261.2% 22,808 100%
comprehensiv %
e income
ADVENTA BERHAD BALANCE SHEET

2016 2015 2014 2013 2012


Dollar Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
Amount in 000
millions
Asset
None
Current
Asset
P.P.E $53,595 53.1% $51,175 46.2% $44,497 27.1% $35,898 92.6% $35,001, 100%
Investment - - - - - 100%
Inventory P. 7,500 - 100%
Intangible 31,592 349.6% 28,759 309.3% 18,178, 158.7% 11,717 66.7% 7,027, 100%
Assets
Deferred tax 424 (93.1) 1,805, (70.5% 3,216 (47.4) 5,086 (16.8) 6,110 100%
assets % % %
T. None C.A 85,611 77.8% 81,740 69.8% 65,892 36.9% 60,202 25.1% 48,140 100%
Current
Asset
Inventories 15,318 100.5% 11,582 51.6% 9,279 21.5% 8,716, 14% 7,640 100%
Trade 12,378 247.1% 17,955 403.5% 13,028 265.3% 4,585 28.6% 3,566 100%
&other recei
Other C.A 825 (30.5% 387 (67.4% 2,690, 126.6% 1,179 (0.7)% 1,187 100%
Tax 4 14 - 167, - 100%
recoverable
Cash &bank 21,001 1229.1 22,122 1300.1 5,849 270.2% 23,513 1388.2 1,580 100%
balances % % %
Total C. A 49,528 254.4% 52,061 272.5% 30,848 120.7% 38,161 173.1% 13,975 100%
Total Assets 135,140 (74.5) 133,801 (74.8) 96,740 (81.8) 98,364 (81.4) 530,118 100%
% % % %
Liabilities 100%
Current 100%
Liabilities
Trade 12,976 (46)% 14,847 (38.2) 13,003 (45.9) 13,993 (41.8) 24,027 100%
&Other % % %
Payable
Derivatives - - - - - - 34 16 100%
Income tax 122 6000% 1900% 850% 14000% 6900% 17200% 8500 200% 100%
payable
Loan 9,403 (3.3)% 10,444 7.4% 2,283, (76.5) 5,429 (44.1) 9,720 100%
&borrowing % %
Total C.L 22,501 (33.4) 25,292 (25.1) 15,391 (54.4) 19,630 (41.9) 33,766 100%
% % % %
None C. L 100%
Loss 31,531 380% 28,086, 330% 4,016 (37.9) 5,865 (9.3)% 6,466 100%
&borrowing %
Total None 31,531 380% 28,086, 330% 4,016 (37.9) 5,865 (9.3)% 6,466, 100%
C Liabilities %
Total L. 54,033 (81.4) 53,379 (81.66) 19,408 (93.3) 25,495 (91.2) 291,071 100%
% % % %
Shareholder’ 100%
s Equity
Share 53,475 (30)% 53,475 (30)% 53,475 (30)% 53,475 (30)% 76,392 100%
capital
Share 4,829 (88.8) 4,829 (88.8) 4,829 (88.8) 4,829, (88.8) 43,026 100%
premium % % % %
Reserve of (11,858) 100%
disposal
Retained 22,801 (82.6) 22,117 (83.1) 19,027 (85.50 14,563 (88.9) 130,801 100%
earning % % % %
Total 81,106 (66.1) 80,422 (66.4) 77,332 (67.6) 72,868, (69.5) 239,047 100%
stockholder’ % % % %
s Equity
Total 135,140 (74.5) $133,801 (74.8) $96,740 (81.8) $98,364 (81.4) $530,11 100%
Liabilities & % % % % 8
Equity

Perform a horizontal analysis for (5 years: 2016, 2015, 2014, 2013, 2012) on items of Statement
of Income (Profit & Loss) and Statement of Financial Position.

ANN JOO RESOURCES BERHAD

2016 2015 2014 2013 2012


Dollar Amount Percen Amount Percen Amount Percen Amount Percen Amount Perce
Amount in t t t t nt
millions
Revenues 1,870,050 (11.4) 1,760,928 (16.6) 2,291,974 8.6% 2,155,373 2.1% 2,110,760 100%
% %
Cost of (1,505,322) (26.1) (1,731,852) (15)% (2,078,825 2% (1,957,785 (3.9)% (2,038,049) 100%
sales %
Gross Profit 364,728 401.6% 29,076 (60)% 213,149 193.1% 197,588 171.7% 72,711 100%

Other 2,428 (93.1) 4,061 (88.4) 14,540 (58.6) 6,505 (81.5) 35,102 100%
income % % %
Administrati (76,637) (9.3)% (71,064) (15.9) (79,520 (5.8)% (80,019) (5.3)% (84,457) 100%
ve expense %
Distribution (40,841) 33.8% (37,085) 21.5% (42,208) 38.3% (37,002 21.2% (30,523) 100%
Expense
Other (6,250) 478.2% (7,889) 629.8% (27,077) 2404.8 (26,263 2362.8 (1,081) 100%
Op.Expense % %
Results 243,428 2851.4 (82,901) 905.1% 78,884 856.4% 60,809 637.3% (8,248) 100%
from Op. %
Activities
Interest 2,228 35.4% 2,459 49.4% 2,429 47.6% 1,890 14.8% 1,646 100%
income
Finance (43,516) 43.1% (60,092) 97.6% (56,323) 85.2% (58,217 91.4% (30,418) 100%
costs
Operating 202,140 446% (140,534) 279.6% 24,990 (32.5) 4,482 (87.9) (37,020) 100%
Profit % %
Share of (12) (89.2) (10) (91)% (20) (82)% (2) (98.2) (111) 100%
result % %
Profit/(Loss 202,128 444.4% (140,544) 278.5% 24,970 (32.6) 4,480 (87.9) (37,131) 100%
) before tax % %
Income Tax (35,353) 93.6% 5,069 (72.2) (1,582) (91.3) 7,788 (57.4) 18,264 100%
Expense % % %
Profit/loss 166,775 784% (135,475) 618% 23,388 24% 12,268 (35)% (18,867) 100%
for the year

BALANCE SHEET ANN JOO RESOURCES BERHAD

2016 2015 2014 2013 2012


Dollar Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
Amount in
millions
Asset
None Current
Asset
P.P.E 1,019,188 (11.2)% 1,038,971 (9.4)% 1,077,284 (6.1)% 1,117,367 (2.6)% 1,147,310 100%
Prepaid lease 10,527 (10.8)% 10,846 (8.1)% 11,165 (5.4)% 11,484 (2.7)% 11,802 100%
payments
Investment 4,011 (4.5)% 4,058 (3.4)% 4,105 (2.2)% 4,152 (1.1)% 4,199 100%
properties
Intangible 7,468 0.1% 7,182 (3.7)% 7,182 (3.7)% 7,182 (3.7)% 7,459 100%
Assets
Investment in 486 498 8 28 - -
associate
Other 60 (76.3)% 29 (88.5)% 29 (88.5)% 17 (93.3)% 253 100%
Investment
Deferred tax 50,969 7.4% 78,166 64.6% 67,445 42.1% 61,238 29% 47,475 100%
assets
Total None 1,092,709 (10.3)% 1,139,750 (6.5)% 1,167,218 (4.2)% 1,201,468 (1.4)% 1,218,498 100%
Current Asset
Current Asset
Inventories 830,764 (38)% 972,887 (27.4)% 1,165,046 (13)% 1,449,827 8.2% 1,339,427 100%
Receivables 336,276 18.3% 265,793 (6.5)% 324,254 14.1% 387,249 36.2% 284,286 100%
& Payments
Derivative - 171 -
assets
Current tax 6,138 (44.7)% 4,139 (62.7)% 3,302 (70.3)% 6,760 (39.1)% 11,107 100%
assets
Cash &bank 54,941 17.8% 62,415 33.8% 61,812 32.5% 52,805 13.2% 46,652 100%
balances
Total Current 1,228,119 (27)% 1,305,405 (22.4)% 1,554,414 (7.6)% 1,896,641 12.8% 1,681,472 100%
Assets
Total Assets 2,320,828 (20.4)% 2,445,155 (16.2)% 2,721,632 (6.7)% 3,098,109 6.2% 2,916,326 100%
Liabilities
Current
Liabilities
Loan 956,657 (24.1)% 1,300,283 3.2% 1,183,539 (6)% 1,518,574 20.6% 1,259,700 100%
&borrowing
Payable & 210,828 12.5% 197,394 5.4% 231,400 23.5% 202,131 7.9% 187,334 100%
accrual
Derivative 221 - - - -
liabilities
Current tax 179 (82.9)% 730 (30.1)% 1,878 79.7% 1,397 33.7% 1,045 100%
liabilities
Liabilities - - - - - - - - 3,673 100%
directly
associated
with assets
Total current 1,167,885 (19.5)% 1,498,407 3.2% 1,416,817 (2.4)% 1,722,102 18.6% 1,451,752 100%
liabilities
None Current
Liability
Loss and 1,831 (99.5)% - (100)% 220,000 (29.9)% 304,480 (23.8)% 399,690 100%
borrowing
RCPS - 58,610 - - -
Liability
component
Provision for 6,307 (14.8)% 5,942 (19.8)% 6,238 (15.7)% 6,703 (9.5)% 7,404 100%
retirement
benefits
Deferred tax 18,056 12.5% 14,230 (11.3)% 15,084 (6)% 15,629 (2.6)% 16,043 100%
liabilities
Total None 84,804 (80)% 20,172 (95.2)% 241,322 (43)% 326,812 (22.8)% 423,137 100%
Current
Liabilities
Total 1,252,689 (33.2)% 1,518,579 (19)% 1,658,139 (11.6)% 2,048,914 9.3% 1,874,889 100%
Liabilities
Shareholder’s
Equity
Share capital 522,842 0.03% 522,708 0% 522,708 0% 522,708 0% 522,708 100%
Treasury (71,389) 0.2% (71,366) 0.2% (71,343) 0.1% (71,284) 0.04% (71,259) 100%
shares
(“RCPS”) - 3,926 - - -
Equity
component
Other 86,920 (27.6) 86,135 (28.2)% 82,547 (31.2)% 82,007 (31.7)% 120,046 100%
reserves
Retained 525,840 13% 389,099 (16.4)% 529,581 13.8% 515,764 10.9% 465,268 100%
earnings
Total 1,068,139 2.7% 926,576 (11)% 1,063,493 2.1% 1,049,195 0.7% 1,041,437 100%
stockholder’s
Equity
Total 2,320,828 (20.4)% 2,445,155 (16.2)% 2,721,632 (6.7)% 3,098,109 6.2% 2,916,326 100%
Liabilities &
Equity

Perform a horizontal analysis for (5 years: 2016, 2015, 2014, 2013, 2012) on items of Statement
of Income (Profit & Loss) and Statement of Financial Position.

ANCOM BERHAD

2016 2015 2014 2013 2012


Dollar Amount Percen Amount Percen Amount Percen Amount Percen Amount Percen
Amount in t t t t t
millions
Revenues 1,509,312 (13.8) 1,552,476 (11.3) 1,864,145 6.5% 2,032,564 16.1% 1,750,204 100%
% %
Cost of sales (1,321,17 (14.9) (1,371,893 (11.7) (1,653,061 6.4% (1,838,205 18.3% (1,553,271 100%
7) % ) % ) ) )
Gross Profit 188,135 (4.5)% 180,583 (8.3)% 211,084 7.2% 194,359 (1.3)% 196,933 100%
Other Op. 23,503 168.1% 22,808 160.2% 28,968 230.4% 5,844 (33.3) 8,767 100%
income %
Distribution (73,236) 11.6% (69,240) 5.5% (71,694) 9.3% (65,290) (0.5)% (65,607) 100%
Cost
Administrative (96,546) 2.7% (87,640) (6.8)% (98,182) 4.4% (91,252) (2.9)% (94,011) 100%
expense
Other Op. (9,413) (56.6) (4,764) (78)% (13,024) (40)% (24,861) 14.6% (21,694) 100%
Expense %
Finance costs (13,038) (6)% (11,032) (20.4) (12,605) (9.7)% (14,405) 3.9% (13,868) 100%
%
Share of (1,643) 424.9% (8) (97.4) - (147) (53)% (313) 100%
results of %
associates, net
of tax
Share of (540) (980) (770) - -
results of joint
ventures, net
of tax
Profit/(Loss) 17,222 68.7% 29,727 191.2% 43,777 328.9% 4,248 (58.4) 10,207 100%
before tax %
Taxation (14,880) 51.8% (24,466) 149.6% (19,142) 95.3% (16,781) 71.2% (9,803) 100%
Profit for the 2,342 479.7% 5,261 1202.2 24,635 5997.8 (12,533) 3002.2 404 100%
financial year % % %
BALANCE SHEET ANCOM BERHAD

2016 2015 2014 2013 2012


Dollar Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
Amount in
millions
Asset
None Current
Asset
P.P.E 235,551 1.7% 228,382 (1.4)% 191,487 (17.3)% 228,418 (1.3)% 231,537 100%
Investment 371 145.7% 132 (12.6)% 139 (7.9)% 145 (4)% 151 100%
properties
Investment in 3,023 20.2% 1,802 (28.3)% 2,509 (0.2)% 3,509 39.5% 2,515 100%
associate
Investment in - 480 980 - -
joint venture
Other 692 (82.8)% 9,686 140.5% 695 (82.7)% 735 (81.7)% 4,027 100%
Investment
Intangible 4,499 (80.9)% 3,094 (86.9)% 3,634 (84.6)% 15,243 (35.4)% 23,578 100%
assets
Goodwill on 96,700 27.3% 79,908 5.2% 71,618 (5.8)% 74,529 (1.2)% 75,992 100%
consolidation
Deferred tax 26,230 (18.7)% 26,557 (17.7)% 29,649 (8.1)% 32,735 1.5% 32,259 100%
assets
Other recive - - 1,592 1,966 -
Total None 367,066 (0.8)% 350,041 (5.4)% 302,303 (18.3)% 357,280 (3.5)% 370,059 100%
Current Asset
Non-current 51 51 -
assets held for
sale
Current Asset
Inventories 119,846 (36.6)% 114,487 (39.4)% 125,563 (33.5)% 190,756 1% 188,935 100%
Trade and 315,773 (10.2)% 328,794 (6.5)% 324,721 (7.7)% 348,414 (1)% 351,826 100%
other
receivables
Amounts 5,685 (31.1)% 2,971 (64)% 1,772 (78.5)% 3,731 (54.8)% 8,250 100%
owing by
associates
Amounts 56 51 345 - -
owing by
joint ventures
Derivative - - 17 39 -
Current tax 3,291 (35.9)% 3,988 (22.3)% 2,074 (59.6)% 855 (83.3)% 5,134 100%
assets
Other 1,179 (45.3)% 1,511 (29.9)% 3,635 68.6% 863 (60)% 2,156 100%
investments
Cash and 99,835 16.3% 122,663 42.9% 127,702 48.8% 69,224 (19.3)% 85,812 100%
bank balances
Total Current 545,665 (15)% 574,465 (10.5)% 585,829 (8.8)% 613,882 (4.4)% 642,113 100%
Assets
Total Assets 912,782 (9.8)% 924,557 (8.6)% 888,132 (12.3)% 971,162 (4)% 1,012,172 100%
Liabilities
Current
Liabilities
Borrowing 213,683 (11)% 233,710 (2.6)% 210,986 (12.1)% 271,742 13.2% 239,986 100%
Trade and 222,535 (28.2)% 228,832 (26.5)% 232,177 (25.4) 263,304 (15.4)% 311,296 100%
other Payable
Amounts 101 676.9% 30 130.8% 523 3923% 508 3807.7% 13 100%
owing to
associates
Derivative - 23 - 1 469 100%
liabilities
Current tax 4,730 196.2% 3,681 130.5% 636 (60.2)% 2,573 61.1% 1,597 100%
liabilities
Total current 441,049 (20.3)% 466,276 (15.7)% 444,322 (19.7)% 538,128 (2.8)% 553,361 100%
liabilities
None Current
Liability
Borrowing 15,855 (21.5)% 19,371 (4.1)% 6,336 (68.6)% 13,273 (34.3)% 20,202 100%
Provision for 3,808 34% 3,198 12.4% 2,882 1.3% 2,862 0.6% 2,846 100%
retirement
benefits
Deferred tax 10,572 (23.4)% 13,751 (0.4)% 13,461 (2.5)% 14,768 7% 13,803 100%
liabilities
Government - - - - 600 100%
Gant
Total None 30,808 (17.7)% 36,320 (3)% 22,679 (39.4)% 30,903 (17.5)% 37,451 100%
Current
Liabilities
Total 471,284 (20.2)% 502,596 (14.9)% 467,001 (21)% 569,031 (3.6)% 590,812 100%
Liabilities
Shareholder’s
Equity
Share capital 218,956 0 218,956 0 218,956 0 218,956 0 218,956 100%
Treasury (2,377) 4.2% (2,127) (6.6)% (2,108) (7.6)% (2,056) (9.9)% (2,281) 100%
shares
Reserve 65,906 (19.6)% 66,814 (18.5)% 61,931 (24.5)% 54,153 (34)% 81,994 100%
Non- 159,013 29.6% 138,318 12.7% 142,352 16% 131,078 6.8% 122,691 100%
controlling
interests
Total 441,498 (90.7)% 421,961 (0.1)% 421,131 (0.05)% 402,131 (4.6)% 421,360 100%
stockholder’s
Equity
Total L. & 912,782 (1)% 924,557 (8.7)% 888,132 (12.3)% 971,162 (4)% 1,012,172 100%
Equity
Ratio Analysis of the five companies from 2015 to 2016

Financial Ratio Analysis

The financial ratio is a ratio of selected values from the firm’s financial statements. These ratios
are used to evaluate the overall financial condition of a corporation to determine the strength and
weaknesses.

ABLE GROUP 2016 2015


1. Liquidity Ratio
Current Ratio= CA/CL 13.13 5.70
2016 47,831/3,643
2015 54,465/9,556
Quick Ratio= CA-INV/CL 12.213 5.333
2016 47,831-3,342/3,643
2015 54,465-3,598/9,556
2. Profitability Ratio 2016 2015
Return on Asset= Net income/Average total asset -1.755% -2.53%
2016 -869/49,499
2015 -1,425/56,305
Return on Equity= Net income/Total Equity -1.896% -3.05%
2016 -869/45,828=
2015 -1,425/46,698=
3. Solvency Ratio 2016 2015
Debt to Equity= Total Debt/Total Equity 8% 20.5%
2016 3,671/45,828
2015 9,607/46,698
Debt to Asset= Total Debt/Total Asset 7.41% 17%
2016 3,671/49,499
2015 9,607/56,305
4. Cash Flow Ratio 2016 2015
Cash flow Operating Activities/Net sale= -3.140 0.880
2016 2,729/ (-869)
2015 -1,255/(-1,425)
Cash flow operating activity/Average total liability 0.743 -0.131
2016 2,729/3,671
2015 -1,255/9607

Liquidity ratio measures the ability of a company to meet its short term obligations. This ratio is
important to short term creditors and bondholders.
a) Current Ratio
Current ratio is the number of times current assets cover current liabilities. It is a measure of the
company’s solvency or its ability to meet current liabilities as they are due. The current ratio of ABLE has
been increasing from a high of 5.70 in year 2015 to the highest of 13.13 in year 2016. However, it has
return back to a high of 13.13 in recent year of 2016. This shows that ABLE is able to cover its current
liabilities 13.13 times using its current assets.
b) Quick Ratio
The current ratio may be refined further by removing inventories from the equation, which is the least
liquid of current assets. This ratio is known as the quick ratio or simple acid test ratio. In 2016, ABLE is
able to cover its current liabilities 12.212 using quick assets. This shows that even after removing
inventories from its current assets, ABLE is still able to cover its current liabilities 12.212 times over.
Higher inventory list due to higher demand from year to year has significantly decreased the quick ratio
(5.323 in 2015).
Profitability ratios show a company's overall efficiency and performance. Profitability ratios are divided
into two types: margins and returns.
a) Return on Asset
This ratio indicates how profitable a company is relative to its total assets. The return on assets ratio
illustrates how well management is employing the company’s total assets to make a profit. The higher the
return, the more efficient management is in utilizing its asset base. The ROA ratio is calculated by
comparing net income to average total assets, and is expressed as a percentage.
The return on asset of ABLE has been decreasing from -2.53%in year 2015 to the lowest of -1.755% in
year 2016. However, it has return back to a lowest of -1.755% in recent year of 2016. This shows that
ABLE management is not utilizing their assets efficiently. There were in loss of the amount $(869) in year
2016 and also $(1,425) in year 2015.

b) Return on Equity

This ratio indicates how profitable a company is by comparing its net income to its average shareholders’
equity. The return on equity ratio measure how much the shareholders earned for their investment in the
company. The higher the ratio percentage, the more efficient management is in utilizing its equity based
and the better return is to investors.

The return on equity of ABLE has been decreasing from -3.05%in year 2015 to the lowest of -1.896%in
year 2019. However, the company has earned the lowest rate of 0.019 in the year 2016. This shows that
the ABLE company has not utilized their equity because of the company has not been doing a good job
using the investors’ money.
Solvency ratios measure the stability of a company and its ability to repay debt. These ratios are of
particular interest to bank loan officers. They should be of interest to you, too, since solvency ratios give a
strong indication of the financial health and viability of your business.
a) Debt to Equity
This ratio indicates the degree of financial leverage being used by the business and includes both short-
term and long-term debt. A Company rising debt-to-equity ratio implies higher interest expenses, and
beyond a certain point, it may affect a company’s credit rating, making it more expensive to raise more
debt. Debt to Equity ratio of ABLE Group has 8% in year 2016 and 20.5% in year 2015. This shows that
the ABLE company has 92% of asset in year 2016 while 8% is debt and also it has 79.5% assets in year
2015 while 20.5% was debt. so that ABLE group has high solvency ratio, because of its equity is too high
comparing its debt. The financial leverage appears to be at comfortable levels, with debt at only 8% of
equity and only
b) Debt to Assets
Another leverage measure, this ratio quantifies the percentage of a company's assets that have been
financed with debt (short-term and long-term). A higher ratio indicates a greater degree of leverage, and
consequently, financial risk. So that Debt to Asset ratio of ABLE group has 7.41% in year 2016 and 17%
in year 2015. This shows that the ABLE Company has 92.59% of assets in year 2016 while 7.41% is debt
and it has 83% of assets in year 2015 while 17% was debt in year 2015. but financial leverage appears to
be at comfortable levels, with debt at only 8% of equity in year 2016 and also 20.5% debt in 2015 and
only 7.4% of assets financed by debt in year 2016 and also 17% of assets financed by debt in year 2015.

Cash flow analysis uses ratios that focuses on cash flow and how solvent, liquid, and viable the company is.
Here are the most important cash flow ratios with their calculations and interpretation.
a) Operating activities to net sale
This ratio, which is expressed as a percentage, compares a company’s operating cash flow to its net sales or
revenues, which gives investors an idea of the company’s ability to turn sales into cash. It would be worrisome
to see a company’s sales grow without a parallel growth in operating cash flow. Positive and negative changes
in a company’s terms of sale and/or the collection experience of its accounts receivable will show up in this
indictor. So that the ABLE Company’s cash flows of year 2016 is -3.14, and also in year 2015 was 0.88. so
that the investors will take and idea that the company will not have ability to turn sales in to cash because of its
in debt of -3.14 times to the cash flow of the company in year 2016. This shows that every $1 of operating
cash flow will generate $-3.14 times Net Sale in year 2016 and also every $1 of operating cash flow will
generate $0.88 times of net sale in year 2015.
b) Operating activities to average total liability
The operating cash flow ratio is a measure of the number of times a company can pay off current debts
with cash generated in the same time period. A higher number means a company can cover its current
debts more times, which is a good thing. Companies with a high or increasing operating cash flow ratio
are in good financial health. Those that are struggling to cover liabilities may be in trouble, at least in the
short-term. So that the ABLE Company’s operating activities to total liabilities in year 2016 is 0.74 time
to their cash of the company can provide beyond its liability payments. And also in year 2015 was -0.13
times, this ratio provides an indication of a company's ability to not cover total debt with its yearly cash
flow from operations. The lower the percentage ratio, the lowest the company's ability to carry and service
its total debt.

THONG GUAN INDUSTRIES BERHAD 2016 2015


1. Liquidity Ratio
Current Ratio= CA/CL 2.848 3.241
2016 466,290/ 163,725
2015 387,969/ 119,686
Quick Ratio= CA-INV/CL 1.889 1.916
2016 466,290-157,059/ 163,725
2015 387,969-158,618/119,686
2. Profitability Ratio 2016 2015
Return on Asset= Net income/Average total asset 9.265% 7.365%
2016 57,428/619,811
2015 39,656/538,428
Return on Equity= Net income/Total Equity 13.1% 10%
2016 57,428/438,283
2015 39,656/396,496
3. Solvency Ratio 2016 2015
Debt to Equity= Total Debt/Total Equity 41.42% 35.80%
2016 181,528/438,283
2015 141,932/396,496
Debt to Asset= Total Debt/Total Asset 29.29% 26.36%
2016 181,528/619,811
2015 141,932/538,428
4. Cash Flow Ratio 2016 2015
Operating cash flow/Net sale= 1.3 2
2016 75,340/57,428
2015 80,648/39,656
Cash flow operating activity/Average total liability 0.415 0.568
2016 75,340/181,528
2015 80,648/141,932
Liquidity ratio measures the ability of a company to meet its short term obligations. This ratio is
important to short term creditors and bondholders.
a) Current Ratio
Current ratio is the number of times current assets cover current liabilities. It is a measure of the
company’s solvency or its ability to meet current liabilities as they are due. The current ratio of THONG
GUAN has been decreasing from 3.241 in year 2015 to 2.848 in year 2016. However, it has return back to
a lowest of 2.848 in recent year of 2016. This shows that THONG GUAN is able to cover its current
liabilities 2.848 times using its current assets.
b) Quick Ratio
The current ratio may be refined further by removing inventories from the equation, which is the least
liquid of current assets. This ratio is known as the quick ratio or simple acid test ratio. In 2016, THONG
GUAN is able to cover its current liabilities 1.889 using quick assets. This shows that even after removing
inventories from its current assets, THONG GUAN is still able to cover its current liabilities 1.889 times
over. Higher inventory list due to higher demand from year to year has significantly increases the quick
ratio (1.916 in 2015).
Profitability ratios show a company's overall efficiency and performance. Profitability ratios are divided
into two types: margins and returns.
a) Return on Asset
This ratio indicates how profitable a company is relative to its total assets. The return on assets ratio
illustrates how well management is employing the company’s total assets to make a profit. The higher the
return, the more efficient management is in utilizing its asset base. The ROA ratio is calculated by
comparing net income to average total assets, and is expressed as a percentage.
The return on asset of THONG GUAN has been increased from 7.365%in year 2015 to the heights of
9.265% in year 2016. However, it has return back to the heights of 9.265% in recent year of 2016. This
shows that THONG GUAN management is doing good job, because they have heights return of that they
have well managed their total assets to make profit and utilized their assets efficiently.

b) Return on Equity

This ratio indicates how profitable a company is by comparing its net income to its average shareholders’
equity. The return on equity ratio measure how much the shareholders earned for their investment in the
company. The higher the ratio percentage, the more efficient management is in utilizing its equity based
and the better return is to investors.
The return on equity of THONG GUAN has been increasing its profit from 10% in year 2015 to the
heights profit of 13.1% in year 201. However, the company has earned the heights rate of 13.1% in the
year 2016. This shows that the THONG company has utilized their equity because of the company has
been doing a good job using the investors’ money.

Solvency ratios measure the stability of a company and its ability to repay debt. These ratios are of
particular interest to bank loan officers. They should be of interest to you, too, since solvency ratios give a
strong indication of the financial health and viability of your business.
c) Debt to Equity
This ratio indicates the degree of financial leverage being used by the business and includes both short-
term and long-term debt. A Company rising debt-to-equity ratio implies higher interest expenses, and
beyond a certain point, it may affect a company’s credit rating, making it more expensive to raise more
debt. Debt to Equity ratio of THONG GUAN has 41.42% in year 2016 and 35.80% in year 2015. This
shows that the THONG Company has 58.58% of equity in year 2016 while 41.42 % is debt and also it
has 64.2% equity in year 2015 while 35.80% was debt. So that THOGUN has middle solvency ratio,
because of its equity is too close comparing its debt. The financial leverage appears to be at comfortable
levels, with debt at only 41.42% of equity in year 2016 and also with debt at only 35.8% in year 2015, it
appears that in year 2015 has lower debt comparing to the year of 2016.
d) Debt to Assets
Another leverage measure, this ratio quantifies the percentage of a company's assets that have been
financed with debt (short-term and long-term). A higher ratio indicates a greater degree of leverage, and
consequently, financial risk. So that debt to asset ratio of THOGUN GUAN has 29.9% in year 2016 and
26.36% in year 2015. This shows that THOGUN Company has 70.1% of assets in year 2016 while
29.9% is debt and also it has 73.64% of assets in year 2015 while 26.36% was debt in year 2015. But
financial leverage appears to be at comfortable levels, with debt at only 29.9% of assets in year 2016 and
also with debt of 26.36% of assets in 2015 and only 29.9% of assets financed by debt in year 2016 and
also 26.36% of assets financed by debt in year 2015.

Cash flow analysis uses ratios that focus on cash flow and how solvent, liquid, and viable the company is.
Here are the most important cash flow ratios with their calculations and interpretation.
a) Operating cash flow to net sale
This ratio, which is expressed as a percentage, compares a company’s operating cash flow to its net sales or
revenues, which gives investors an idea of the company’s ability to turn sales into cash. It would be worrisome
to see a company’s sales grow without a parallel growth in operating cash flow. Positive and negative changes
in a company’s terms of sale and/or the collection experience of its accounts receivable will show up in this
indictor. So that the THOGUN Company’s operating cash flows of year 2016 is 1.3times and also in year 2015
was 2 times. so that the investors will take and idea that the company will have ability to turn sales in to cash
because of it have normal net sale, the company terms of sale is positive as appeared in year 2016. This shows
that every $1 of operating cash flow will generate $1.3 Net Sale in year 2016 and also every $1 of operating
cash flow will generate $2 of net sale in year 2015.
B) Operating activities to average total liability
The operating cash flow ratio is a measure of the number of times a company can pay off current debts
with cash generated in the same time period. A higher number means a company can cover its current
debts more times, which is a good thing. Companies with a high or increasing operating cash flow ratio
are in good financial health. Those that are struggling to cover liabilities may be in trouble, at least in the
short-term. So that the THONG GUAN Company’s operating activities to total liabilities in year 2016 is
0.42 time to their cash of the company can provide beyond its liability payments. And also in year 2015
was 0.57 times to their cash of the company can provide beyond its liability payments. This ratio provides
an indication of a company's ability to cover total debt with its yearly cash flow from operations.

ADVENT BERHAD 2016 2015


1. Liquidity Ratio
Current Ratio= CA/CL 2.201 2.058
2016 49,528/22,501
2015 52,061/25,292
Quick Ratio= CA-INV/CL 1.520 1.600
2016 49,528-15,318/22,501
2015 52,061-11,582/25,292
2. Profitability Ratio 2016 2015
Return on Asset= Net income/Average total asset 0.5% 2.3%
2016 684/135,140
2015 3090/133,801
Return on Equity= Net income/Total Equity 0.8% 3.8%
2016 684/81,106
2015 3090/80,422
3. Solvency Ratio 2016 2015
Debt to Equity= Total Debt/Total Equity 66.6% 66.4%
2016 54,033/81,106
2015 53,371/80,422
Debt to Asset= Total Debt/Total Asset 40% 39.9%
2016 54,033/135,140
2015 53,371/133,801
4. Cash Flow Ratio 2016 2015
Operating cash flow/Net sale= 5.721 0.840
2016 3,914,581/684,150
2015 2,595,658/3,089,997
Cash flow operating activity/Average total liability 0.072 0.048
2016 3,914,581/54,033,613
2015 2,595,658/53,379,300

Liquidity ratio measures the ability of a company to meet its short term obligations. This ratio is
important to short term creditors and bondholders.
a) Current Ratio
Current ratio is the number of times current assets cover current liabilities. It is a measure of the
company’s solvency or its ability to meet current liabilities as they are due. The current ratio of ADVENT
BERHAD has been increasing its assets from a high of 2.058 in year 2015 to the higher of 2.201 in year
2016. However, it has return back to a high of 2.2times in recent year of 2016. This shows that ADVENT
is able to cover its current liabilities 2.2 times using its current assets.
b) Quick Ratio
The current ratio may be refined further by removing inventories from the equation, which is the least
liquid of current assets. This ratio is known as the quick ratio or simple acid test ratio. In 2016, ADVENT
is able to cover its current liabilities 1.5times using quick assets. This shows that even after removing
inventories from its current assets, ADVENT is still able to cover its current liabilities 1.5 times over.
Higher inventory list due to higher demand from year to year has significantly increased the quick ratio
(1.6 in year 2015).
Profitability ratios show a company's overall efficiency and performance. Profitability ratios are divided
into two types: margins and returns.
a) Return on Asset
This ratio indicates how profitable a company is relative to its total assets. The return on assets ratio
illustrates how well management is employing the company’s total assets to make a profit. The higher the
return, the more efficient management is in utilizing its asset base. The ROA ratio is calculated by
comparing net income to average total assets, and is expressed as a percentage.
The return on asset of ADVENT has been decreasing from 2.3%in year 2015 to the lowest of 0.5% in
year 2016. However, it has return back to a lowest of 0.5% in recent year of 2016. This shows that
ADVENT management is not utilizing their assets efficiently.

b) Return on Equity

This ratio indicates how profitable a company is by comparing its net income to its average shareholders’
equity. The return on equity ratio measure how much the shareholders earned for their investment in the
company. The higher the ratio percentage, the more efficient management is in utilizing its equity based
and the better return is to investors.

The return on equity of ADVENT has been decreasing from 3.8% in year 2015 to the lowest of 0.8% in
year 2016. However, the company has earned the lowest rate of 0.8% in the year 2016. This shows that
the ADVENT company has not utilized their equity because of it has 99.2% of equity in year 2016 while
0.8% is net sale and also it has 96.2% of equity in year 2015 while 3.8% is net sale the company has not
been doing a good job using the investors’ money.

Solvency ratios measure the stability of a company and its ability to repay debt. These ratios are of
particular interest to bank loan officers. They should be of interest to you, too, since solvency ratios give a
strong indication of the financial health and viability of your business.
e) Debt to Equity
This ratio indicates the degree of financial leverage being used by the business and includes both short-
term and long-term debt. A Company rising debt-to-equity ratio implies higher interest expenses, and
beyond a certain point, it may affect a company’s credit rating, making it more expensive to raise more
debt. Debt to Equity ratio of ADVENT is 66.6% in year 2016 and 66.4% in year 2015. This shows that
the ADVENT Company has 33.4% of equity in year 2016 while 66.6% is debt and also it has 33.6% of
equity in year 2015 while 66.4% was debt. So that ADVENT group has low solvency ratio in terms of
their debt, because of its debt is too high comparing its equity. The financial leverage appears to be at
comfortable levels, with debt at only 66.6% of equity in year 2016 and also with debt at only 66.4% 0f
equity in year 2015,
b) Debt to Assets
Another leverage measure, this ratio quantifies the percentage of a company's assets that have been
financed with debt (short-term and long-term). A higher ratio indicates a greater degree of leverage, and
consequently, financial risk. So that Debt to Asset ratio of ADVENT is 40% in year 2016 and 39.9% in
year 2015. This shows that the ADVENT Company has 60% of assets in year 2016 while 40% of is debt
and it has 60.1% of assets in year 2015 while 39.9% was debt in year 2015. But financial leverage
appears to be at comfortable levels, with debt at only 40% of assets in year 2016 and also 39.9% debt in
2015 and only 40% of assets financed by debt in year 2016 and also 39.9% of assets financed by debt in
year 2015.

Cash flow analysis uses ratios that focuses on cash flow and how solvent, liquid, and viable the company is.
Here are the most important cash flow ratios with their calculations and interpretation.
a) Operating cash flow
This ratio, which is expressed as a percentage, compares a company’s operating cash flow to its net sales or
revenues, which gives investors an idea of the company’s ability to turn sales into cash. It would be worrisome
to see a company’s sales grow without a parallel growth in operating cash flow. Positive and negative changes
in a company’s terms of sale and/or the collection experience of its accounts receivable will show up in this
indictor. So that the ADVENT Company’s operating cash flows of year 2016 is 5.721times, and also in year
2015 was 0.84 times. so that the investors will take and idea that the company will have ability to turn sales in
to cash because of it has normal net sale, the company terms of sale is positive as appeared in year 2016. This
shows that every $1 of operating cash flow will generate $5.7 Net Sale in year 2016 and also every $1 of
operating cash flow will generate $0.84 of net sale in year 2015.
b) Operating activities to average total liability
The operating cash flow ratio is a measure of the number of times a company can pay off current debts
with cash generated in the same time period. A higher number means a company can cover its current
debts more times, which is a good thing. Companies with a high or increasing operating cash flow ratio
are in good financial health. Those that are struggling to cover liabilities may be in trouble, at least in the
short-term. So that the ADVENT Company’s operating activities to total liabilities in year 2016 is 0.07
time to their cash of the company can provide beyond its liability payments. And also in year 2015 was
0.048 times to their cash of the company can provide beyond its liability payments. This ratio provides an
indication of a company's ability to cover total debt with its yearly cash flow from operations. The lower
the percentage ratio, the lowest the company's ability to carry and service its total debt.

ANN JOO RESOURCES BERHAD 2016 2015


1. Liquidity Ratio
Current Ratio= CA/CL 1.052 0.871
2016 1,228,119/1,167,885
2015 1,305,405/1,498,407
Quick Ratio= CA-INV/CL 0.340 0.222
2016 1,228,119-830,764/1,167,885
2015 1,305,405-972,887/1,498,470
2. Profitability Ratio 2016 2015
Return on Asset= Net income/Average total asset 7.2% -5.5%
2016 166,775/2,320,828
2015 -135,475/2,445,155
Return on Equity= Net income/Total Equity 15.6% 14.6%
2016 166,775/1,068,139
2015 -135,475/926,576
3. Solvency Ratio 2016 2015
Debt to Equity= Total Debt/Total Equity 117.3% 163.9%
2016 1,252,689/1,068,139
2015 1,518,579/926,576
Debt to Asset= Total Debt/Total Asset 54% 62.1%
2016 1,252,689/2,320,828
2015 1,518,579/2,445,155
4. Cash Flow Ratio 2016 2015
Cash flow Operating activities/Net sale 1.823 -1.00
2016 304,053/166,775
2015 135,508/-135,475
Cash flow operating activity/Average total liability 0.243 0.089
2016 304,053/1,252,689
2015 135,475/1,518,579

Liquidity ratio measures the ability of a company to meet its short term obligations. This ratio is
important to short term creditors and bondholders.
a) Current Ratio
Current ratio is the number of times current assets cover current liabilities. It is a measure of the
company’s solvency or its ability to meet current liabilities as they are due. The current ratio of ANN
JOO has been increasing from a higher of 0.87 in year 2015 to the highest of 1.05 in year 2016. However,
it has return back to a highest of 1.05 times in recent year of 2016. This shows that ANN JOO is able to
cover its current liabilities 1.05 times using its current assets.
B) Quick Ratio
The current ratio may be refined further by removing inventories from the equation, which is the least
liquid of current assets. This ratio is known as the quick ratio or simple acid test ratio. In 2016, ANN JOO
is able to cover its current liabilities 0.34 times using quick assets. This shows that even after removing
inventories from its current assets, ANN JOO is still able to cover its current liabilities times over. Higher
inventory list due to higher demand from year to year has significantly decreased the quick ratio (2.22 in
year 2015).
Profitability ratios show a company's overall efficiency and performance. Profitability ratios are divided
into two types: margins and returns.
a) Return on Asset
This ratio indicates how profitable a company is relative to its total assets. The return on assets ratio
illustrates how well management is employing the company’s total assets to make a profit. The higher the
return, the more efficient management is in utilizing its asset base. The ROA ratio is calculated by
comparing net income to average total assets, and is expressed as a percentage.
The return on asset of ANN JOO has been increasing from -5.5%in year 2015 to the highest of 7.2% in
year 2016. However, it has return back to a highest of 7.2% in recent year of 2016. This shows that ANN
JOO management is doing good job which is utilizing their assets efficiently in year 2016.

b) Return on Equity
This ratio indicates how profitable a company is by comparing its net income to its average shareholders’
equity. The return on equity ratio measure how much the shareholders earned for their investment in the
company. The higher the ratio percentage, the more efficient management is in utilizing its equity based
and the better return is to investors.

The return on equity of ANN JOO has been increasing from -14.6% in year 2015 to the highest of 15.6%
in year 2016. However, the company has earned the highest rate of 15.6% in the year 2016. This shows
that the ANN JOO company has been utilizing their equity because of the company has been doing a
good job using the investors’ money.

Solvency ratios measure the stability of a company and its ability to repay debt. These ratios are of
particular interest to bank loan officers. They should be of interest to you, too, since solvency ratios give a
strong indication of the financial health and viability of your business.
a) Debt to Equity
This ratio indicates the degree of financial leverage being used by the business and includes both short-
term and long-term debt. A Company rising debt-to-equity ratio implies higher interest expenses, and
beyond a certain point, it may affect a company’s credit rating, making it more expensive to raise more
debt. Debt to Equity ratio of ANN JOO has 117% in year 2016 and 163.9% in year 2015. This shows
that the ANN JOO Company has -17% of equity in year 2016 while 117% is debt and also it has -63.9%
equity in year 2015 while 163.9% was debt. so that ANN JOO has lowest solvency ratio, because of its
debt is too high above hundred comparing its equity. the financial leverage appears not to be at
comfortable levels, with debt at only 117% of equity in year 2016.
b) Debt to Assets
Another leverage measure, this ratio quantifies the percentage of a company's assets that have been
financed with debt (short-term and long-term). A higher ratio indicates a greater degree of leverage, and
consequently, financial risk. So that Debt to Asset ratio of ANN JOO has 54% in year 2016 and 62% in
year 2015. This shows that the ANN JOO Company has 46% of assets in year 2016 while 54% is debt
and also has 38% of assets in year 2015 while 62% was debt in year 2015. But financial leverage appears
to be at comfortable levels, with debt at only 54% of equity in year 2016 and also 62% debt in 2015 and
only 54% of assets financed by debt in year 2016 and also 62% of assets financed by debt in year 2015.
Still there is a large amount of asset financed by debt that will lead the company in to Bankrupt/insolvent.

Cash flow analysis uses ratios that focuses on cash flow and how solvent, liquid, and viable the company is.
Here are the most important cash flow ratios with their calculations and interpretation.
c) Operating cash flow
This ratio, which is expressed as a percentage, compares a company’s operating cash flow to its net sales or
revenues, which gives investors an idea of the company’s ability to turn sales into cash. It would be worrisome
to see a company’s sales grow without a parallel growth in operating cash flow. Positive and negative changes
in a company’s terms of sale and/or the collection experience of its accounts receivable will show up in this
indictor. So that the ANN JOO company’s cash flows of year 2016 is 1.8times and also in year 2015 was -1
times, so that the investors will take and idea that the company will not have ability to turn sales in to cash
because of the historical background of the company is not good, like in year 2015 the company is in debt as
appeared in the table, but the company terms of sale is positive as appeared in year 2016. This shows that every
$1 of operating cash flow will generate $1.8 Net Sale in year 2016 and also every $1 of operating cash flow
will generate $-1 of net sale in year 2015.
b) Operating activities to average total liability
The operating cash flow ratio is a measure of the number of times a company can pay off current debts
with cash generated in the same time period. A higher number means a company can cover its current
debts more times, which is a good thing. Companies with a high or increasing operating cash flow ratio
are in good financial health. Those that are struggling to cover liabilities may be in trouble, at least in the
short-term. So that the ANN JOO Company’s operating activities to total liabilities in year 2016 is 0.24
time to their cash of the company can provide beyond its liability payments. And also in year 2015 was -
0.09 times to their cash of the company can provide beyond its liability payments. This shows that every $1
of operating activities to average total liability will generate $0.24 total liability in year 2016 and also every $1
of operating activities generate $-0.09 of the total assets in year 2015.

ANCOM BERHAD 2016 2015


1. Liquidity Ratio
Current Ratio= CA/CL 1.24 1.23
2016 545,665/441,049
2015 574,465/466,276
Quick Ratio= CA-INV/CL 0.97 0.99
2016 545,665-119,846/441,049
2015 574,465-114,487/466,276
2. Profitability Ratio 2016 2015
Return on Asset= Net income/Average total asset 0..26% 0.57%
2016 2,342/912,782
2015 5,261/924,557
Return on Equity= Net income/Total Equity 0.53% 1.25%
2016 2,342/441,498
2015 5,261/421,961
3. Solvency Ratio 2016 2015
Debt to Equity= Total Debt/Total Equity 106.7% 119.1%
2016 471,284/441,498
2015 502,596/421,961
Debt to Asset= Total Debt/Total Asset 51.6% 54.4%
2016 471,284/912782
2015 502,596/924,577
4. Cash Flow Ratio 2016 2015
Operating cash flow/Net sale= 21.832 10.121
2016 51,132/2,342
2015 53,249/5,261
Cash flow operating activity/Average total liability 0.108 0.106
2016 51,132/471,284
2015 53,249/502,596

Liquidity ratio measures the ability of a company to meet its short term obligations. This ratio is
important to short term creditors and bondholders.
a) Current Ratio
Current ratio is the number of times current assets cover current liabilities. It is a measure of the
company’s solvency or its ability to meet current liabilities as they are due. The current ratio of ANCOM
has been increasing from a high of 1.23 in year 2015 to the highest of 1.24 in year 2016. However, it has
return back to a high of 1.24 in recent year of 2016. This shows that ANCOM is able to cover its current
liabilities 1.24 times using its current assets.
b) Quick Ratio
The current ratio may be refined further by removing inventories from the equation, which is the least
liquid of current assets. This ratio is known as the quick ratio or simple acid test ratio. In 2016, ANCOM
is able to cover its current liabilities 0.97 times using quick assets. This shows that even after removing
inventories from its current assets, ANCOM is still able to cover its current liabilities 0.97 times over.
Higher inventory list due to higher demand from year to year has significantly increased the quick ratio
(0.99times in year 2015).
Profitability ratios show a company's overall efficiency and performance. Profitability ratios are divided
into two types: margins and returns.
a) Return on Asset
This ratio indicates how profitable a company is relative to its total assets. The return on assets ratio
illustrates how well management is employing the company’s total assets to make a profit. The higher the
return, the more efficient management is in utilizing its asset base. The ROA ratio is calculated by
comparing net income to average total assets, and is expressed as a percentage.
The return on asset of ANCOM has been decreasing from 0.57%in year 2015 to the lowest of 0.26% in
year 2016. However, it has return back to a lowest of 0.26% in recent year of 2016. This shows that
ANCOM management is not utilizing their assets efficiently.

b) Return on Equity
This ratio indicates how profitable a company is by comparing its net income to its average shareholders’
equity. The return on equity ratio measure how much the shareholders earned for their investment in the
company. The higher the ratio percentage, the more efficient management is in utilizing its equity based
and the better return is to investors.

The return on equity of ANCOM has been decreasing from 1.25% in year 2015 to the lowest of 0.53% in
year 2016. However, the company has earned the rate of 0.53% in the year 2016. This shows that the
ANCOM company hast not utilized their equity because of the company has no doing a good job using
the investors’ money.

Solvency ratios measure the stability of a company and its ability to repay debt. These ratios are of
particular interest to bank loan officers. They should be of interest to you, too, since solvency ratios give a
strong indication of the financial health and viability of your business.
f) Debt to Equity
This ratio indicates the degree of financial leverage being used by the business and includes both short-
term and long-term debt. A Company rising debt-to-equity ratio implies higher interest expenses, and
beyond a certain point, it may affect a company’s credit rating, making it more expensive to raise more
debt. Debt to Equity ratio of ANCOM has 106.7% in year 2016 and 119.11% in year 2015. This shows
that the ANCOM company has -6.7% of equity in year 2016 while 106.7% is debt and also it has -19.1%
assets in year 2015 while 119.1% was debt. so that ANCOM gr has lowest solvency ratio, because of its
debt is too high comparing its equity as percentage. the financial leverage appears not to be at comfortable
levels, with debt at only 106.7% of equity in year 2016 and also with debt at only 119.1% of equity in
year 2015.
g) Debt to Assets
Another leverage measure, this ratio quantifies the percentage of a company's assets that have been
financed with debt (short-term and long-term). A higher ratio indicates a greater degree of leverage, and
consequently, financial risk. So that Debt to Asset ratio of ANCOM has 51.6% in year 2016 and 54.4%
in year 2015. This shows that the ANCOM company has 48.4% of assets in year 2016 while 51.6% is
debt and it has 45.6% of assets in year 2015 while 54.4% was debt in year 2015. but financial leverage
appears to be at comfortable levels, with debt at only 51.6% of equity in year 2016 and also 54.4% debt
in 2015 and only 51.6% of assets financed by debt in year 2016 and also 54.4% of assets financed by debt
in year 2015.

Cash flow analysis uses ratios that focuses on cash flow and how solvent, liquid, and viable the company is.
Here are the most important cash flow ratios with their calculations and interpretation.
d) Operating cash flow
This ratio, which is expressed as a percentage, compares a company’s operating cash flow to its net sales or
revenues, which gives investors an idea of the company’s ability to turn sales into cash. It would be worrisome
to see a company’s sales grow without a parallel growth in operating cash flow. Positive and negative changes
in a company’s terms of sale and/or the collection experience of its accounts receivable will show up in this
indictor. So that the ANCOM company’s cash flows of year 2016 is 21.8 times and also in year 2015 was 10.
so that the investors will take and idea that the company will have ability to turn sales in to cash because of its
in debt, the company terms of sale is negative as appeared in year 2016.
This shows that every $1 of operating cash flow will generate $21.8 Net Sale in year 2016 and also every $1 of
operating cash flow will generate $10 of net sale in year 2015. So that this company has good cash flow
comparing to other companies.
b) Operating activities to average total liability
The operating cash flow ratio is a measure of the number of times a company can pay off current debts
with cash generated in the same time period. A higher number means a company can cover its current
debts more times, which is a good thing. Companies with a high or increasing operating cash flow ratio
are in good financial health. Those that are struggling to cover liabilities may be in trouble, at least in the
short-term. So that the ANCOM Company’s operating activities to total liabilities in year 2016 is 0.1 time
to their cash of the company can provide beyond its liability payments. And also in year 2015 was 0.1
times to their cash of the company can provide beyond its liability payments. This ratio provides an
indication of a company's ability to cover total debt with its yearly cash flow from operations. This shows
that every $1 of operating activities to average total liability will generate $0.1 total liability in year 2016 and
also every $1 of operating activities generate $0.1 of the total assets in year 2015. So that company has low
debt comparing to other companies and can continuous its’s operation related to the cash and so on.

Based on the above analyses, the potential companies of making investments in the five selected are as
flows: comparing to all companies that I have discussed in the above are very difference in terms of
vertical analysis, horizontal analysis and financial ratio analysis. For example, the first company (ABLE)
net income/sale in terms of vertical analysis was loss, which shows that the company wouldn’t making
any investment because it’s in debt even the historical year, and also the balance of this company was in
debt according to the historical year. And also the horizontal analysis of the company as same as the
vertical analysis. The ratio analysis of (ABLE) company is good at liquidity and solvency but the
profitability and cash flow is in debt, because of the management of that company has not utilized the
assets and the equity they have.
The second company (THONG) net income/sale in terms of vertical analysis was high, because of they have
good revenue and also their balance sheet was good comparing to the asset and liability. And also the
horizontal analysis was good according to the historical year. The Balance sheet of this company was good
according to the historical year and the current year. The ratio analysis of this company has enough liquidity
ratio and also high profitability ratio and also normal solvency and normal cash flow.
The third company (ADVENT) net income/loss in terms of horizontal was very low comparing to the base
year and also with the vertical analysis with the same as horizontal analysis and also the balance sheet was not
dab whether vertical and horizontal and also the ratio analysis of the this company is not good at the second
company (THONG), because of the ratio analysis of ADVENT company at the side of the profitability is very
low and also at side of the solvency was high ratio that causes the company in to Bankruptcy/insolvency, and
also has normal liquidity and cash flow.
The fourth company (ANN JOO) net income/loss in terms of vertical and horizontal is very good but some of
the historical years are in debt and also the balance sheet of this company is very good according to the
historical years but the current year is very low comparing the past years and also the ratio analysis of the
company has good profitability and less liquidity and also it have very high rate of solvency that will cause
bankruptcy/insolvency of the company and even low cash flow that couldn’t run the business in to long time.
The fifth company that I have selected and discussed (ANCOM) net income/loss in terms of vertical and
horizontal was normal there is not much more expenses that revenue and also the balance sheet of the company
in terms of horizontal and vertical was normal no more liabilities than equity of the company and also in terms
of financial ratio the ANCOM company has low liquidity and lowest solvency and also low profitability but
only has good cash flow of the current year. So that all companies are in that situation that I have discussed on
the above.
The company of THONG is the best one of the five selected companies that I have discussed in the above and
the first one that I can say or I can make potential investment, because of all other companies are in debts in to
many different area and also same as the company that I have mentioned in the above, although the company
that I have mentioned in the above is lowest companies in terms of cash flow and in terms of profitability. So
that THONG is the only company that can able to run long time, in terms of profitability, liquidity, cash flow
and solvency and also can pay immediately its debt, because it has good solvency and profitability and even
cash flow. THONG company is the first company that can deserve the potential of making investments
comparing to the rest of the companies. There are some other companies which are making potential
investment, though some of them in debt in some area but capable to carry potential investment, those
companies are ADVENTA BERHAD and ABLE GROUP BERHAD. The second company that deserves
to make potential investment is ABLE, because of ABLE has good liquidity and good solvency that is
possible to return the company debt quickly and also solvency, since solvency ratios give a strong
indication of the financial health and viability of your business. So that is why I gave it second company.
The third company that deserves to make potential investment is ADVENT, because of ADVENT has
normal liquidity and normal cash flow and low profit, only it has bad solvency but the rest of ratio is not
bad so that comparing the rest of the companies the ADVENT is deserves to make potential investment.
The rest of tow companies are the lowest companies and they are in debt so that they are not deserves to
make potential investment.
The criteria that I can deem fit and provide my professional arguments are to compare the five companies at
the side of ratio analysis and I will rank all those companies to their best and worst. By comparing all five
companies I will do a table that I can classify the areas that they are good and bad, so that I will get good
measurement that I can rank their best. Down here is table that I can compare the companies in terms of ratio
analysis:

1 2 3 4 5

For the year Ended ABLE GROUP THONG GUAN ADVENTA ANN JOO ANCOM
of 2016-2015 BERHAD INDUSTRIES BERHAD RESOURCES BERHAD

2016 2015 BERHAD 2016 2015 2016 2015 2016 2015


2016 2015
Liquidity ratio 13.13 5.70 2.848 3.241 2.201 2.058 1.052 0.871 1.24 1.23
(Current & Quick) 0.34 0.22 0.97 0.99
12.213 5.333 1.889 1.916 1.520 1.60

Profitability ratio -1.755% -2.53% 9.265% 7.365% 0.5% 2.3% 7.2% 5.5% 0.26% 0.57%
(Return on assets 15.6% 14.6% 0.53% 1.25%
& Return on -1.896% -3.05% 13.1% 10% 0.8% 3.8%
equity)

Solvency ratio 8% 20.5% 41.42% 35.80% 66.6% 66.4% 117.3% 163.9% 106.7% 119.1%
(Debt to equity 54% 62.1% 51.6% 54.4%
&Debt to Assets) 7.41% 17% 29.29% 26.36% 40% 39.9%

Cash flow ratio -3.140 0.880 1.3 2 5.721 0.840 1.823 -1 21.8 10.12
(Cash return to 0.243 0.089 0.11 0.11
sale ratio & cash 0.743 -0.131 0.415 0.568 0.072 0.048
debt coverage
ratio)

As appeared in the above table, I have made comparison between the five companies that I have already
selected and discussed. In my best understanding of financial reporting and analysis, I would like to make
ranks for the five companies which indicates the best one and the worst one of them. In my best efforts of hard
working towards this assignment, I would provide ranks to the all five companies which is as flows
THONG GUAN INDUSTRIES BERHAD is the best company one when I compare it to the others that I
have selected and discussed so that I have provided it for the rank of A level. Because it has good liquidity
comparing to other companies and good/ higher profitability, the company has earned the heights profit
rate comparing to the others and also normal solvency comparing to the others, the financial leverage
appears to be at comfortable levels, with debt and good cash flow that can able to run the business for long
term. And it’s the best company that can make investment comparing to the others as appeared in the table
above. ABLE is the second best one comparing to the others, because of it has good liquidity comparing
to all companies and also good solvency which is the financial leverage appears to be higher comfortable
levels that would be paid their liability immediately but it has negative profitability and cash flow and is
not big effect of the company’s ongoing long time, though it has good solvency and liquidity, so that I
have provided it for the rank of B level.
ADVENT is the third best one comparing to the others, because of it has normal liquidity comparing the
rest of the selected companies and low profitability that might change the coming quarters or semiannual
or years and it has hope or high expectation that will generate good income if the management will do
good job of utilizing the assets and the equities of the companies. But it has high rate of solvency that will
cause bankruptcy/insolvency and also has good cash flow that can run the longtime of the company. So
that I have provide it for the rank of C level.
The rest of the two companies are the lowest and they have high rate of solvency and low cash flow and
also low liquidity and profitability comparing to the top three, so that I have provided for both of the
companies for the rank of level F. that means they have failed to appears the top and they are in debt they
can run their operation anymore, because of if the debt has been taken the companies will become
insolvency that is why they have been getting F levels.