Professional Documents
Culture Documents
Group Assignment
1.1 INTRODUCTION
In this project, we chose a reputable and well known company in Malaysia Astro
Malaysia Holdings. Of this company, we will analyze various types of ratio that we can
get data from the financial statements of this company. Our objective is to do research,
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so that we are able to understand how to calculate financial ratios, explain the
usefulness of financial ratios, the company's performance during the year and also
learning with the original financial data from a well-known company in Malaysia. We
chose the Astro Malaysia Holdings as an option for our review of the data because as
we know, this company has been known for a lot of good customers from Malaysia
itself, even been known to ASEAN. therefore, we are interested in finding out more
about the statistics of financial ratios of the company.
Astro Malaysia Bhd was incorporated as privately owned company in June 1, 1996,
operated under MEASAT satellite system to broadcast the digital direct service into the
customer. As an entertainment company, Astro Malaysia listed on the main market of
the Bursa Malaysia Securities Berhad on 21 September 2012. During the prospectus
session, Astro uphold 70.8% which owned by Astro, meanwhile the remaining shares
are held by institutional shareholder including cornerstone investor-high net worth
shareholder and retail shareholder.
Astros is now stands as the consumer and content leader in Malaysia and
ASEAN, focusing on 4 pillars as the main core businesses in entertainment purpose, for
instance on watch, listen, read and shop services where offered into the public
consumers. Malaysian people are embraced with a multi-tainment 360 O as the positive
approach of Astro in wrapped up the diversity of Malaysian people where an
entertainment is approaching the multidimensional and multicultural approach to
enhance the lives of all Malaysians into a whole new level of multimedia purpose. Multi-
tainment 360O encompass of all varieties Astros products e.g Astro Television, Astro
Radio, Astro Entertainment, Astro Digital Publications and Astro Digital and Astro Shop.
Over the years, the consumer of Astros provided with 184 TV channels accessed
through DTH (Direct-To-Home) satellite TV, IPTV (Multi-channel digital TV with
dedicated IP network and bandwith), OTT (Over-the-Top, video services accessed
through third partys network). From 184 TV channels, 73 are branded of Astro which 50
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channels showed in High Definition pictures. For about 4.4 million customers,
approximately 63 percent of Malaysian household subscribed an Astros content
including High Definition, Standard Definition, Personal Video Recorder, Video on
Demand, TV, IPTV platform services where accessed through Astro B.yond. In addition,
the non-subscription (NJOI) offered with 25 free TV channels and also 20 radio stations.
As the content leader, Astro accommodate radio listeners with the Malay, Chinese, Tamil
and English-language stations. The radio listeners of Astros were constituting 12.9
million weekly and 3.9 million unique visitors per month accessed through terrestrial and
digital platforms respectively. Additional service of Astros provided through Go Shop
that encourage 44 millions online viewers monthly.
From 2010 to 2014, the Astros award comprises of Golden award at Putra Brand
Awards, Brands of the Year 2012, Brand Icon 2013, CASBAA Convention (Chairman
Award) 2014, Silver Stevie Award 2014, Outstanding Business Awards 2014,
organization of the Year (Management Accounting) 2014. Currently, the company
chaired by Tun Dato Seri Zaki bin Tun Azmi as independent non-executive chairman,
employs a total workforce of 4,800 employees nationwide, headquartered at the All Asia
Broadcast Center in Technology Park Malaysia. Astro also has been operated 4 Astro
Lifestyle Center and 19 Customer Service Center to pursuit of the 1 st media brand
choice in ASEAN.
2. METHODOLOGY
a. Current Ratio
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The current ratio is called current because, unlike some other liquidity
ratios, it incorporates all current assets and liabilities. The current ratio is also
known as the working capital ratio.
1,218,174
102,522 = 11.8820740914
b. Quick Ratio
The quick ratio or acid test ratio is a liquidity ratio that measures the ability
of a company to pay its current liabilities when they come due with
only quick assets. Quick assets are current assets that can be converted
to cash within 90 days or in the short-term.
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Ratio
= 365 / 5.13
= 71 days
= 365 / 2.22
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= 164 days
Average Collection Period (2015)
= 365 / 1.88
= 194 days
b. Receivable Turnover
Accounts receivable turnover is the number of times per year that a
business collects its average accounts receivable. The ratio is intended to
evaluate the ability of a company to efficiently issue credit to its customers
and collect funds from them in a timely manner.
= 1.88 times
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c. Inventory Turnover
In accounting, the Inventory turnover is a measure of the number of
times inventory is sold or used in a time period such as a year.
The formula for calculating a companys total asset turnover, then, is:
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The formula for calculating a companys fixed asset turnover, then, is:
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= 343,492 / 1,011,065
= Sales / Net Fixed Asset
= 0.34
Fixed Asset Turnover (2015)
= Sales / Net Fixed Asset
= 457,982 / 172,660
= 2.65
a. Debt Ratio
The formula for calculating a companys total debt ratio, then, is:
= 10,108,169,000
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10,108,169,000
= 3,042,936,000 / 10,108,169,000
= 0.3010
= 10,030,477,000
10,030,477,000
= 3,017,647,000 / 10,030,477,000
= 0.3008
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= 9,821,785,000
9,821,785,000
= 2,882,438,000 / 9,821,785,000
= 0.2935
The formula for calculating a companys debt equity ratio, then, is:
Debt/Equity = TD / TE
= 0.4307
= 0.4303
= 0.4154
The formula for calculating a companys time interest earned, then, is:
year
year
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year
The formula for calculating a companys gross profit margin, then, is:
= 679,852 / 7
= 9693.14
= 343,492 / 343,492
=1
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= 457,982 / 457,982
=1
The formula for calculating a companys net profit margin, then, is:
= 620,045 / 679,859
= 91.20%
= 310,420 / 343,492
= 90.37%
= 426,896 / 457,982
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= 93.21%
= 620,045 / 10,108,169
= 6.13%
= 310,420 / 10,030,477
= 3.09%
= 426,896 / 9,821,785
= 4.34%
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= 620,045 / 7,065,233
= 8.77%
= 3,104.20 / 7,012,830
= 4.42%
= 426,896 / 6,939,347
= 6.15%
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The formula for calculating a companys earnings per share, then, is:
= 673,694,000 / 5,210,000,000
= 0.13
= 376,556,000 / 5,210,000,000
= 0.07
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= 415,457,000 / 5,210,000,000
= 0.08
The formula for calculating a companys price / earning ratio, then, is:
PE Ratio (2013)
= 2.860 / 0.13
= 22 times
PE Ratio (2014)
= 2.860 / 0.17
= 40.86 times
PE Ratio (2015)
= 2.860 / 0.08
= 35.75 times
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Current Ratio
The current ratio helps investors and creditors understand the liquidity of a
company and how easily that company will be able to pay off its current liabilities.
This ratio expresses a firm's current debt in terms of current assets. So a current
ratio of 4 would mean that the company has 4 times more current assets than
current liabilities.
A higher current ratio is always more favorable than a lower current ratio
because it shows the company can more easily make current debt payments.The
highest ratio was at 2013 was (11.8820740914) and declining at 2014
(5.0059629938) and also at 2015 (1.5084171812).
Quick Ratio
Higher quick ratios are more favorable for companies because it shows
there are more quick assets than current liabilities. A company with a quick ratio
of 1 indicates that quick assets equal current assets. This also shows that the
company could pay off its current liabilities without selling any long-term assets.
An acid ratio of 2 shows that the company has twice as many quick assets than
current liabilities. Therefore, Astro Company gain quick ratio was at
11.6516455005 in 2013 but declining in the next year to 4.9364832204,
1.4701695804.
Debt Ratio
A lower debt ratio usually implies a more stable business with the potential
of longevity because a company with lower ratio also has lower overall debt.
Each industry has its own benchmarks for debt, but .5 is reasonable ratio. At
2013 debt ratio was 0.3010 then 2014 was 0.3008 and 2015 was 0.2935.so the
best ratio debt was at 2015.
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A debt to equity ratio of 1 would mean that investors and creditors have an
equal stake in the business assets.but in this company debt ratio 2013 was
0.4307, 2014 was 0.4303 and 2015 was 0.4154.A lower debt to equity ratio
usually implies a more financially stable business. Companies with a higher debt
to equity ratio are considered more risky to creditors and investors than
companies with a lower ratio. Unlike equity financing, debt must be repaid to the
lender. Since debt financing also requires debt servicing or regular interest
payments, debt can be a far more expensive form of financing than equity
financing. Companies leveraging large amounts of debt might not be able to
make the payments.
The times interest earned ratio, sometimes called the interest coverage
ratio, is a coverage ratio that measures the proportionate amount of income that
can be used to cover interest expenses in the future.
viewed from the calculation of the Interest Earned Time Astro company,
EBIT (Earnings Before Interest and Taxes) fluctuations in the value that is in
2013, the data is then decreased from 620,045,000 to 310,420,000. But in the
last year its going up to 426,896,000.
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Receivable Turnover
Inventory Turnover
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uses assets to generate profit, not just sales revenue. The formula for return on
assets is Net Income divided by Average Total Assets. Notice that if you multiply
asset turnover (Sales divided by Average Total Assets) by profit margin (Net
Income divided by Sales), you get Net Income divided by Average Total Assets --
in other words, return on assets. In general, companies with high asset turnover
tend to have low profit margins, while those with low turnover tend to have higher
profit margins. 1.32 (2013), 0.05 (2014) and 0.065 (2015).
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This ratio also indirectly measures how well a company manages its
expenses relative to its net sales. That is why companies strive to achieve higher
ratios. They can do this by either generating more revenues why keeping
expenses constant or keep revenues constant and lower expenses.For astro
company in 2014 was 90.37 and increasing to at 2015 93.21%.so that the
revenues on sales was increased by 3,21 from previous year.
The return on assets ratio measures how effectively a company can earn
a return on its investment in assets. In other words, ROA shows how efficiently a
company can convert the money used to purchase assets into net income or
profits. Therefore, in 2014 was 3.09% and increased 2015 was at 4.34% from
that i could tell the return of assets increased 1% for asset values spending
management that means better from previous year.
Therefore, for 2014 was 4.42% at 2015 was at 6.15% that show the
values in 2015 is better than 2014 because that being said, investors want to see
a high return on equity ratio because this indicates that the company is using its
investors' funds effectively. Higher ratios are almost always better than lower
ratios, but have to be compared to other companies' ratios in the industry. Since
every industry has different levels of investors and income, ROE can't be used to
compare companies outside of their industries very effectively.
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There for in 2013 ,2014 ,2016 was 0.13 ,0.07 and 0.08 the highest was
0.17.so the better performance was 2014.
The price to earnings ratio indicates the expected price of a share based
on its earnings. As a company's earnings per share being to rise, so does their
market value per share. A company with a high P/E ratio usually indicated
positive future performance and investors are willing to pay more for this
company's shares.
The highest ratio was at 40.86 times in 2014 but declining 2015 at 35.75
times and the lowest was 22 times. A company with a lower ratio, on the other
hand, is usually an indication of poor current and future performance. This could
prove to be a poor investment. In general, a higher ratio means that investors
anticipate higher performance and growth in the future. It also means that
companies with losses have poor PE ratios.
a. Conclusion
So, we have make analysist about the financial performance from this
company for 3 years from the 2013 until 2015 and our judgement about this
company. Astro Malaysia has good financial performance it can be see from their
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gross profit margin but it only good for 2013 and also this company has a good
net profit margin for 3 years with more than 90 % each year. Although for ROA
and ROE this company is under 10 % they dont have interest for each year. They
also have a good value in Earning Per Share and Earning ratio. For the ratio this
company has good value in current ratio and quick ratio for 2 years from 2014
until 2015 but bad value for 2013 and they have a bad value for asset
management ratio and leverage ratio for 3 years.
b. Recommendation
This company should increase their performance for selling their product
and improve their quality management so they can reduce their ratio and their
own risk for their company and they can increase their profitability. These
companies also have to frequently perform maintenance on the performance of
the company
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5. References
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