Analysis

A) liquidity ratio

Liquidity refers to how easily assets can be converted into cash. Cash is the most liquid
asset. Therefore, liquidity ratios measure a company's ability to pay its debt obligations.
Thus, in this project we want to examine and analyse the liquidity of two companies
whether they were able to handle and cover their short-term obligation in the last five
years. The two companies are Genting plantation PHD and BATU KWAN PHD

LIQUIDITY RATIO
YEAR NAME OF current ratio quick ratio
COMPANY
2014 GENTING 4.49 4.21
PLANTATION
BATU 2.29 1.64
KAWAN
2015 GENTING 5.85 5.62
PLANTATION
BATU 2.00 1.56
KAWAN
2016 GENTING 5.50 5.12
PLANTATION
BATU 2.18 1.59
KAWAN
2017 GENTING 2.73 2.50
PLANTATION
BATU 2.33 1.76
KAWAN
2018 GENTING 2.42 2.09
PLANTATION
BATU 2.40 1.63
KAWAN

As we can see from the above table, both companies are in good at liquidity, means they
have ample cash to facilitate their day to day operations. Current ratio
demonstrates company’s’ ability to pay its current obligations. according the general rule
of thumb is that it should be at least 2:1. Therefore, both BATU KWAN AND GENTING
PLANTATION PHD have maintained a sound liquidity for the last five years since both
of their current ratio are above 2:1.

Current Ratio
8.00
6.00
4.00
2.00
0.00
2014 2015 2016 2017 2018

Current ratio (GENTING) Current ratio (BATU KWAN)

in this chart genting plantation had a higher current ratio in years 2014, 2015, and 2016
than BATU KWAN. GENTING’S ratio was even more than 5:1. This means GENTING
had a capability to pay its short-term obligations at least 5 times within a year. however,
for the last two years GENTING’S ratio declined to 2x. In addition to that we also need to
examine quick ratio which is actually a more stringent test of liquidity as it excludes the
least liquid asset which is inventory. Also, according to rule of thumb, this ratio should be
kept under 1:1. At this time BATU KWAN had a good quick ratio since its ratio near to 1:1
for all the past five years than GENTING. On the contrast, GENTING has had a huge ratio
on liquidity ratio for its past five years. This shows that genting are not utilizing its cash in
an efficient way since it seems they have an idle cash.

B) Asset Management Ratio:

Asset Management Ratios are the key to analysing how effectively and
efficiency a firm is managing its assets to generate revenue. These ratios are
also known as Activity or Turnover Ratios.
 Asset Management Ratios
YEAR NAME OF Inventory Days sales Fixed Assets Total assets
COMPANY turnover outstanding turnover turnover
2014 GENTING 6.54 58.94 0.42 0.29
PLANTATION
BATU KAWAN 8.84 54.14 1.29 0.81

2015 GENTING 7.75 88.69 0.29 0.19

PLANTATION
BATU KAWAN 11.75 71.75 1.27 0.75

2016 GENTING 8.49 124.48 0.30 0.20

PLANTATION
BATU KAWAN 8.70 48.87 1.34 0.86

2017 GENTING 14.02 80.38 0.32 0.21

PLANTATION
BATU KAWAN 8.48 44.51 1.59 1.02

2018 GENTING 15.63 90.90 0.33 0.24

PLANTATION
BATU KAWAN 7.73 41.81 1.38 0.93

Inventory turnover is a ratio showing how many times a company has sold and replaced
inventory during a given period. Low turnover implies weak sales, while a high ratio
implies strong sales. Inventory turnover of both companies seems to be similar, and it lies
a range between 15 up to 7 times. In the last year, 2018 GENTING sold its inventory 15
times while BATU KAWAN sold only 7 time during the year. Days sales outstanding
(DSO) is a measure of the average number of days that it takes a company to collect
payment after a sale has been made. In the last five years, both companies take more than
45 days to collect their receivables, but in 2018 GENTING had a difficulty to collect money
from customers since it took more than 120 days to collect receivables. The fixed asset
turnover ratio reveals how efficient a company is at generating sales from its existing fixed
asset.
 3) Debt Management Ratios

Debt Management Ratios

YEAR NAME OF Total debt to total assets Times interest earned
COMPANY
2014 GENTING 25.71% 45.71
PLANTATION
BATU KAWAN 37.37% 14.01

2015 GENTING 37.83% 4.93

PLANTATION
BATU KAWAN 41.47% 10.96

2016 GENTING 39.32% 7.53

PLANTATION
BATU KAWAN 38.58% 11.20

2017 GENTING 46.05% 6.18

PLANTATION
BATU KAWAN 36.43% 9.52

2018 GENTING 44.95% 1.90

PLANTATION
BATU KAWAN 35.61% 7.51

The debt management ratios measure how much a firm is leveraged. Leveraged is how much

debt is used to finance a company and debt generally represents a fixed cost of financing to a

firm.
 Debt Ratio
50.00%
45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
2014 2015 2016 2017 2018

GENTING BATU KAWAN

The debt ratio is a financial ratio that measures the extent of a company’s leverage or

proportion of a company’s assets that are financed by debt. Both BATU KAWAN and

GENTING have debt ratios which is less than 1. This means both of the companies have

more assets than debts. The last two years, GENTING has a higher debt ratio than BATU

KWAN, and it is nearly more than 45% of debt used to finance its asset.

Times interest earned (TIE) is a metric used to measure a company's ability to meet its debt

obligation, and it indicates how many times a company can cover its interest charges. In 2014,

GENTING had capability to pay its debt obligations at least 45 times with in that years while the

BATU KAWA was abled only to pay 14 times during that period.
4) Profitability Ratio
Profitability ratios are a class of financial metrics that are used to assess a business's ability to
generate income relative to its revenue, operating costs, balance sheet assets, and
shareholders' equity during a specific point in time. They show how well a company utilizes
its assets to produce profit and value to shareholders.

Profitability Ratios
YEAR NAME OF Operating Profit Return on Basic earning Return on
COMPANY margin margin Total assts power (BEP) common
(ROA) equity (ROE)
2014 GENTING 31.6% 23.0% 6.7% 9.3% 49.3%
PLANTATION
BATU 13.2% 4.5% 3.7% 10.0% 11.2%
KAWAN
2015 GENTING 18.0% 13.8% 2.6% 3.4% 24.5%
PLANTATION
BATU 9.7% 3.4% 2.6% 6.7% 8.6%
KAWAN
2016 GENTING 30.3% 22.9% 4.5% 6.0% 42.8%
PLANTATION
BATU 11.8% 4.9% 4.2% 9.2% 13.6%
KAWAN
2017 GENTING 25.6% 18.7% 4.0% 5.4% 42.1%
PLANTATION
BATU 8.4% 2.7% 2.8% 7.7% 8.8%
KAWAN
20147 GENTING 10.9% 8.7% 2.1% 2.7% 20.5%
PLANTATION
BATU 7.7% 2.5% 2.3% 6.3% 7.1%
KAWAN
YEAR NAME OF COMPANY Earnings per Price / earning (P/E) Market/
share Book
2014 GENTING
PLANTATION
BATU KAWAN
2015 GENTING
PLANTATION
BATU KAWAN
2016 GENTING
PLANTATION
BATU KAWAN
2017 GENTING
PLANTATION
BATU KAWAN
20147 GENTING
PLANTATION
BATU KAWAN