Financial Management

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Names: Student IDs:
Lee Ern Hui 0319703
NgWai Khong 0317980
Than Lek Mei 0315538
Hiew Li Ming 0319941
Jackson Ting Shii Hang 0324326
Chong Kai Xiang 0322935
Programme: Bachelor ofQuantity Surveying (Honours),SCHOOL OFARCHITECTURE, BUILDING & DESIGN
Email (Group Leader): michelle_lee0111@hotmail.com ContactNo (Group Leader): 0123323101
Subjectcode and title: QSB3413/QSB3414/FIN60203FINANCIAL MANAGEMENT
Module Lecturer/ Tutor: Tay Shir Men
Assignmentnumber: Group Written Assignment Due date: 8/12/2017
Assignmenttopic as stated in the guidelines provided: Businessand financial analyses and forecasts ofa company.
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Ng Wai Khong 7/12/2017
Than Lek Mei 7/12/2017
Hiew Li Ming 7/12/2017
Jackson Ting Shii Hang 7/12/2017
Chong Kai Xiang 7/12/2017
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A. A feedback form needs to be included with each assignment. Please complete all details clearly.
Student Names and IDs:
Lee Ern Hui 0319703
NgWai Khong 0317980
Than Lek Mei 0315538
Hiew Li Ming 0319941
Jackson Ting Shii Hang 0324326
Chong Kai Xiang 0322935
Programme: Bachelor ofQuantity Surveying (Honours),SCHOOLOF ARCHITECTURE,BUILDING & DESIGN
Email : michelle_lee0111@hotmail.com ContactNo : 0123323101
Module code and title: QSB3413/QSB3414/FIN60203FINANCIAL MANAGEMENT Module Lecturer/ Tutor: Tay Shir Men
Assignmentnumber: Group Written Assignment Due date: 8/12/2017 Word Count:
Assignmenttopic as stated in the guidelines provided: Business and financial analysesand forecasts ofa company.
ASSIGNMENT FEEDBACK GRADE/ MARK

3. B. This section will be completed by the lecturer/tutor assessing your assignment:
CRITERIA %
DISTINCTION
(7.5-10)
CREDIT
(6-7.4)
PASS
(5-5.9)
MARGINAL
FAIL(4-4.9)
FAIL
(0-3.9) SCORE
Executive summary,
introduction,background
and principalactivities, and
strategic plans ofthe
company
5 # Excellent
Well-researched, objective and
clearly written.
# Good # Fair # Poor # Confusing
Shows little or no research, biased or
irrelevant, lacks clarity.
Industry analysis 10 # Excellent
Relevant, up-to-date and well-
researched.
# Good # Fair # Poor # Erroneous
Irrelevant, outdated, little evidence of
research.
Financialanalysis 70 # Excellent
Accurate calculations ofthe latest
financial data over two years,
comparison with industry data, well-
reasoned analyses.
# Good # Fair # Poor # Erroneous
Multiple errors in calculations
showing lackofunderstanding,fails
to evaluate company by comparing
with relevantindustry data, no
reasoned analysis offinancial data.
Financialforecasts 10 # Excellent
Accurate calculationsand
correct conclusions. Excellent
evaluation of theprojectedcash
requirements.
# Good # Fair # Poor # Erroneous
Multipleerrorsin calculations
showing lackof understanding.
Forecasts withoutany basisor
justification. Missing or invalid
conclusionsand analyses.
Structure andpresentation,
language, reference of
sources
5 # Excellent
Excellentheadings/sub-headings,
layout, pagination. Excellent
grammar, spelling.Effective/accurate
use offigures and tables. Excellent
references ofsources.
# Good # Fair # Poor # Erroneous
Inappropriate or no headings, poor
and confusing layout, innappropriate
or no numbering. Weak grammar,
many spelling mistakes,
ineffective/inaccurate use offigures
and tables. Poor or no references of
sources.
Penalty
Total (100%)
Final score (25%)
Any additionalcomments(if there is any):Comments:
Assessed by: Date:
Sample Moderated by (ifany): Date:

4. 4
Contents
No. Page
Number
a) Company Background 1
b) Principal Activities of the Company 4
c) Revenue Contributions of Different Segments 8
d) Evaluation of the Current State of the Main/Major Industry or Industries in
Which the Company Operates
10
e) An analysis of the company’s strengths and weaknesses 13
f) The company’s strategic plans for seizing opportunities and for facing
challenges in its industry
14
g) Major Capital Investments 16
h) Ratios 18
i) Conclusion & Recommendation 36

5. 5
a) Company Background
Mah Sing Group Berhad was founded in 1965 is headquartered in Kuala Lumpur,
Malaysia. It is also recognized as one of the top leading property developer in Malaysia. This
company is listed on the Main Market of Bursa Malaysia Securities Berhad with a stock
named MAHSING and stock code of 8583. Mah Sing Group Berhad operates segments
incorporate properties, plastics and investment holding. The properties segment involves
investment and development of residential, commercial and industrial properties. The plastic
segment includes manufacture, assembly and trading of their plastic products. The other
segment includes investment holding operations, provision of management and property
support services, and trading of building materials.Their products offering and the ability to
cater to the diverse buyers and market segments is the key to remain more outstanding from
other developers.
The key personals of this company are listed below:
Board of Directors
Name& Designation
Jen. Tan Sri Yaacob Bin Mat Zain (R)
Chairman / Independent Non- Executive Director
Tan Sri Dato’ Sri Leong Hoy Kum
Group Managing Director / Group Chief Executive

6. 6
Datuk Ho Hon Sang
Chief Executive Officer / Executive Director
Dato’ Steven Ng PohSeng
Executive Director
Leong Yuet Mei
Executive Director
Captain Izaham Bin Abd. Rani (R)
Independent Non-Executive Director
LohKok Leong
Independent Non-Executive Director

7. 7
Jane Leong Jheng-Yi
Alternate Director to
Tan Sri Dato’ Sri Leong Hoy Kum
Based on Annual Report for financial year 2016, the total issued market share
capital is 3.711 billion. The company has total 2.425 billion numbers of shares.The company
has total of 16no. of shareholders. The three largest shareholders of the company are
MayangTerataiSdn. Bhd., PermodalanNasionalBhd and Employees Provident Fund which
own 27.0 %, 14.80% and 8.81% of shareholdings respectively.

8. 8
b) Principal Activities of the Company
Mah Sing Group Berhad is a well-known property developer in Malaysia. The
company specializes in property development where the group develops commercial,
residential and also industrial properties. Besides, Mah Sing Group Berhad is involved in
manufacturing and trading as well. it owns Mah Sing Plastic Industries (MSPI), one of the
largest high-tech plastic manufactures in Malaysia and Indonesia. The fundamental scope of
the group now obliges the high-end part of real estate market, with various key reasonable
tasks. Its branches are occupied with property expansions, property administration,
investment holding, exchanging of plastic and related items, arrangement of hospitality
administration services, and arrangement of utilities and administration services.
Property development activities in the main city is one of their best strategy that Mah
Sing Group had come across, it has numerous projects all across Kuala Lumpur, Klang
Valley, Johor Bahru as well as Sabah including 46 ongoing projects in these area.In 2015,
the Grouphas developeda famous iconic luxury condo at Mont Kiara.

9. 9
Figure 1: Icon Residence, Mont Kiara. The development’s concept is inspired by the
numerous towns along the mountains Mediterranean coast, which seem to tumble down the
cliffs. This condo consists ofluxury garden terrace in the sky and sky bridges that link three
iconic towers and private lift access for earmarked units.
In accordance with Annual Report 2016, thecurrentfamous development located at
Embassy Row, Jalan Ampang. It is the first development in Malaysia to have multi-level
thematic hanging gardens. It also has a one-of-a-kind facility deck dubbed the Altitude Club
which houses world class recreational and business facilities. M City has invested
approximately RM45million for the development’s entire landscaping presentation.

10. 10
Figure 2: M City, JalanAmpang,Kuala Lumpur. This is a mix development of SOHO, Service
Apartments and shops.This development consist of 4-tier Altitude Club opens up to infinity
pools, indoor rockclimbing wall, golf simulator, Sky gym, and other facilities that are brilliantly
back dropped by the breath taking cityscape.M City Mobile application also is one of the first
technology servicesin Malaysia.It allows M City residents to book facilities using their mobile
devices.
Besides that, the future planned developments are in heart of Kota Kinabalu near
KK Suria Mall. This project, with an estimated gross development value (GDV) of RM1.4
billion, is ideally located to take advantage of the superb natural features surrounding the city
with coral islands, emerald green sea and forest clad hills making up a picture-postcard
setting for this much anticipated new addition to the cityscape.

11. 11
Figure 3:KotaKinabalu Convention City (KKCC).The KKCC master plan will include hotels, a
corporate office tower, mall, lifestyle retail shops, F&B outlets and serviced residences. The
towers are interconnected by covered walkways with a central arena featuring deluxe
recreational and lifestyle facilities. The serviced residence tower takes full advantage of its
coastal location with each unit opening up to scenic panoramic sea views.

12. 12
c) Revenue Contributions of Different Segments
In year 2016, Mah Sing Group Berhad has a totalrevenue of RM2,957,617,000.00
from all of the segments, the major revenue contributions are coming from the property
development, plastics and investment holding.
In the year ended 31 December 2016, only the revenue from property development
was approximately RM2.6 billion and the operating profit was RM469.9 million. The
operating profit has increased by 2.6% mainly due to lower selling, marketing and
administrative expense in 2016. However, it is lower than the year 2015. The revenue is
decreased by 6.6% mainly due to the lower contribution from M City in JalanAmpang and
Icon City in Petaling Jaya.The upgrading of national infrastructure and connectivity will affect
the property industry, as homebuyers may choose to stay away from cities with ease of
public transport.
For year 2016, the plastic segment has continued to contribute positively to the group
performance. The revenue had grown by 11.8% from approximately RM231.9 million to RM
259.4 million and the operating profits improved by 11.8% from RM14.2 million to RM 15.9
million due to the higher sales of pallet, automotive and electrical parts too. Besides, the
operation of plastic division is not only in Malaysia, but also in Indonesia and United State. In
the plastic division, there are 35% of the operational sales and revenue which are derived
from export, and the major sales and revenue were in US dollar denomination. However, the
depreciation of the Malaysian Ringgit against US dollars resulted in cheaper pricing points
for the exports, making them more attractive to the international market.
Besides property and plastic development, investment holding also one of the major
revenue contributions which contributed the group for RM71,436,000, even though the
portion is smaller than the other two divisions. For example, the group has conduct some
investment activities such as, rental income, interest income, and dividend income from
subsidiary companies.

13. 13
Figure 4: Revenue Contributions of Different Segments in 2016
89%
9% 2%
Revenue Contributions
Property Development Plastics Development Investment Holding
RM2,626,784,000
RM259,397,000 RM71,436,000

14. 14
d) Evaluation of the Current State of the Main/Major Industry or Industries in Which
the Company Operates
Mah Sing is listed on the Main Board of Bursa Malaysia, and it is Malaysia’s premier
lifestyle developer with trendy, quality properties in prime and strategic locations.With 20
years of property development expertise. The company is a fully integrated developer of
residential, commercial and industrial projects. The projects in Malaysia are focused in the
property hotspots of Kuala Lumpur, Klang Valley, Penang Island, Johor Bahru and Kota
Kinabalu. Besides, the group has a diverse range of projects, from medium to high-end
landed and high-rise residential properties to Grade A office buildings, retail projects, SoHo
and industrial projects.
Futhermore, Mah Sing Group Berhadhas three major segments that are property
development, plastics and investment holding. The main revenue contribution to the group is
property development. The figures below are the breakdown of company’s revenue from
year 2013 to 2016.
RM2,005,596,000
RM2,904,723,000
3108506000
2957617000
2013 2014 2015 2016
Revenue

15. 15
Mah Sing group is one of the Malaysia’s most diversified property developers with
projects in the established Klang Valley. Besides, the net worth of the group as of 3/1/2017
is $320,000,000 US dollars which is about RM1,300,256,000. The figure below will show the
average growth rates of Mah Sing Group Bhd.
During the last five years, the company’s revenue growth is increased by 13.32%
from the year 2012 to the ended of year of 2016. On the other hand, the company’s earnings
per share has declined by 2.01%. Net income, capital spending, gross margin and cash flow
are also increased by 8.15%, 25.10%, 28.17%, and 15.47% respectively.
Moreover, Mah sing is one of the top property developers in Malaysia, who is one of
the Top 10 winners in The Edge Malaysia Top Property Developers Awards 2016 for 6 years
continuously. As one of the top property developers, Mah Sing has used RM30 billions as
gross development value in 2016.
The table below shows the gross development value for the property development:
PropertyDevelopment Gross Development Value
Residential buildings and townships RM18.8 billions
Shops, offices, retails and hotels RM10 billions
Industrial development RM1.4 billions
TOTAL RM30.2 billions

16. 16
Besides the property development there are plastics manufacturing segment, such
as Mah Sing Plastics Industries Sdn. Bhd, Vital Routes Sdn. Bhd. and P.T Mah Sing
Indonesia. These subsidiary company or factories are located at Malaysia and Indonesia. As
we discussed before there are 9% of the revenue is contributed by the plastic manufacturing
segment.
Based on the performance from the past years, we can see that Mah Sing is always
improving their performance year by year. For the next few years it will have a steady growth
of the group performance, since in the annual report of 2016, they had mentioned that they
would like to develop more affordable house for the younger generations in Klang Valley.
Not only in Klang Valley, the group also will develop in different place such as Titiwangsa,
Sentul, Cheras and Bukit Mertajam.
There are some challenges facing the industry. Nowadays, the economy is
getting worse in our country which is affecting the ability of people to purchase any property.
In this case, the company’s development sales performance might also be affected too.
Moreover, another challenge that will face by the property development is because of
the depreciation of the Ringgit Malaysia and the implementation of Government Service Tax
(GST). For example, most of the construction materials are imported from the other country,
since the weakening of Ringgit Malaysia, so, it will cause the construction cost to increase.
In the effect of this, the group should have to prepare solutions to solve the problems.

17. 17
e) An analysis of the company’s strengths and weaknesses
Strength:
In addition to residential developments, the group has a strong commercial presence with
Grade A buildings, integrated business parks and mixed-use commercial developments as
well as being one of the pioneers of sales of Grade A buildings and corporate offices in
Kuala Lumpur. The group’s strong balance sheet and net cash position make it nimble
enough to grab opportunities and deal with unforeseen market challenges, allowing it to
maintain a good balance between growth and stability, moving forward, the group will focus
on strengthening its business fundamentals, operationally and financially, and to continue to
deliver a steady and sustainable performance over the long term.
Weakness:
Based on the past worker’s experience, they advised that the company should improve in
the sales & marketing management. It is because when the staff get a good result on their
sales, they not get any praises or rewards from management or the superior themselves. In
opposite, when the staffs are under performing neither achieve the target set by their
manager and the manager or group leader will start questioning his members regarding the
issue of low sales or performing from time to time.
In this way, the management team should put more effort to understand what's the problem
sales staff facing and also always looking on what's the feedback of the client towards the
project, examples: the workmanship of the project is bad. Appointed agent get more benefit
than in house sales staff. When sales staff help agents to close sales, sales staff get nothing.
If the company really appreciate their own sales staff, they should not treat them like this
unfair. The pressure from the top management and CSO Office, All the thing come with
Memo can be as a trash, Commission want to claim always have some problem and stack in
the middle, prefer to fixes the problem, people put hard work and get nothing. There is very
small chance of moving up the corporate ladder salary increment and it shows that the
company doesn't appreciate their staffs although public listed but more likely operate it like
family owned business. Also, the company ruled by top management and it lacks of
democracy within the company whereby the lower level workers only can follow whatever
decided by the top management and has no chance to voice out their opinions in order to
improve the working environment for their company.

18. 18
f) The company’s strategic plans for seizing opportunities and for facing challenges in
its industry
Strategy Plan
Mah Sing Group is aware of the industry-wide market conditions. The implementation of the
Goods and Services Tax has affected market sentiment. The weakening ringgit and difficulty
in getting end financing and mortgage approvals due to tighter lending rules further slowed
down sales. These are challenges that all of us have to face. However, with a strong team, a
comprehensive range of products and a strong financial position, they believe they can
overcome these challenges.
Mah Sing always aim to carve out a niche in a crowded market and we do so with a belief in
the power of product branding and differentiation. We maintain our market leadership
position by rolling out products with relevant price points.
In addition, Mah Sing always keep in mind that they want all their buyers to have good rental
income and capital appreciation because we want repeat buyers.
Strategy (Mediumterm):
For the medium term, apart from property development, Mah Sing has look into plans to
diversify and explore different areas such as real estate investment trusts.

19. 19
Strategy (Long term):
For the long term, Mah Sing Group looking to target Malaysian and international buyers. At
present, their base of international buyers is small. Nevertheless, there has been growing
interest owing to a prolific rise in interest in Malaysian real estate in neighbouring countries
such as China, Hong Kong and Macau, Taiwan, Japan, Singapore and Indonesia.
Challenges:
Mah Sing are aware of the industry-wide market conditions. The implementation of
the Goods and Services Tax has affected market sentiment. The weakening ringgit and
difficulty in getting end financing and mortgage approvals due to tighter lending rules further
slowed down sales. These are challenges that all of them have to face. However, with a
strong team, a comprehensive range of products and a strong financial position, they believe
they can overcome these challenges.They will also always keep in mind that they want all
their buyers to have good rental income and capital appreciation because they want their
buyers look back.

20. 20
g) Major Capital Investments
According to Investopedia (2017), capital investment refers to funds invested in a firm or
enterprise for the purpose of increasing operational capacity and furthering its business
objectives. It is concerned with the deployment of capital for long-term uses. Companies
make continual capital investment to sustain existing operations and expand their
businesses for the future. Capital investment may also refer to a firm's capital assets or fixed
assets that is expected to be productive over many years such as manufacturing plants and
machinery. For this company, they have invested in mostly property, plant and equipment,
land held for property development and more. The table below shows the total amount of
investment from year 2013 to year 2016 as shown in Table 1. The amount of investment in
year 2016 is the least as Mah Sing had only invested in the land held for property
development.
Year Capital Investment
2013 RM562,326,000
2014 RM787,122,000
2015 RM291,820,000
2016 RM155,253,000
Table 1 Capital investment from year 2013 to 2016
Sources of capital investment may include equity investors, banks, financial
institutions, venture capital and angel investors. Companies make good decisions about
what kind and the amount of capital investment they should have which will lead to the
funding requirements. Therefore this decision affects the choice of financing sources.
The funding option of a firm is usually company's own operating cash flow. The major
sources of funding these investments are from operating activities and financing
activities in this company. Each year of the major sources of funding has in common are
proceeds from short-term borrowings and term loans.

21. 21
In year 2013, the sources of funding came from many ways which are
withdrawal of deposits pledged with licensedbank as collateral, proceeds from ESOS
exercised, withdrawal of deposits with licensed bank for Escrow Accounts and many
more. However, the major sources are the proceeds from Right Issue, proceeds from
term loans and proceeds from Warrant exercised. For year 2014, the major sources are
also from financing activities such as proceeds from ESOS exercised, proceeds from
term loans which is the largest amount, proceeds from Warrants exercised and followed
by proceeds from short-term borrowing
In financial year 2015, other than withdrawal of deposits pledged with licensed
bank as collateral, proceeds from Warrants exercised and short-term borrowings, the
major sources are proceeds from Right Issue and term loans. For the year 2016, major
funding from operating and financing activities are term loans just like other years, short-
term borrowings and also withdrawal of deposits in Debt Service Reserve Accounts. All
of the sources came from the operating activities of the property development. Capital
investment is meant to be beneficial to a company in the long run, but on the other hand,
it has some short-term downsides as well. Reduction in earnings, strain on liquidity from
payment demand on interest and maturing principals, and dilute earnings and ownership
if new equity is used will occur due to intensive and ongoing capital investment
(Investopedia 2017).

22. 22
h) Ratios
1. Current Ratio
The current ratio is a liquidity ratio that measures a company's ability to pay short-term and
long-term obligations. To gauge this ability, the current ratio considers thecurrent total assets
of a company (both liquid and illiquid) relative to that company'scurrent total liabilities.
Year Current Asset (Current Liabilities) Current Ratio (CR)
2016 MYR 4,640,273,000 MYR 1,496,366,000 3.10
2015 MYR 5,165,004,000 MYR 1,507,651,000 3.43
2014 MYR 4,064,289,000 MYR 1,598,105,000 2.54
2013 MYR 3,745,449,000 MYR 1,476,393,000 2.54

23. 23

24. 24
2. Quick Ratio
The quick ratio is a measure of how well a company can meet its short-term financial liabilities.
Also known as the acid-test ratio, it can be calculated as follows: (Cash + Marketable Securities
+ Accounts Receivable) / Current Liabilities.
Year Cash Account
Receivable
Current
Liabilities
Quick
Ratio (QR)
2016 MYR 923,769,000 MYR 1,039,732,000 MYR 1,496,366,000 1.31
2015 MYR 1,358,665,000 MYR 1,062,433,000 MYR 1,507,651,000 1.61
2014 MYR 639,176,000 MYR 818,338,000 MYR 1,598,105,000 0.91
2013 MYR 822,290,000 MYR 581,748,000 MYR 1,476,393,000 0.95

25. 25
3. InventoryTurnover
The Inventory turnover is a measure of the number of timesinventory is sold or used in a time
period such as a year. The equation forinventory turnover equals the cost of goods sold
divided by the average inventory.
Year Cost of Goods Sold Inventory InventoryTurnover (IT)
2016 MYR 2,212,152,000.00 MYR 359,989,000 6.15
2015 MYR 2,314,138,000.00 MYR 190,362,000 12.16
2014 MYR 2,122,164,000.00 MYR 154,754,000 13.71
2013 MYR 1,396,936,000.00 MYR 76,225,000 18.33

26. 26
4. Average Collection Period
The average collection period can be calculated as follows: 365 days in a year divided by the
accounts receivable turnover ratio. Assuming that a company has an accounts receivable
turnover ratio of 10 times per year, the average collection period is 36.5 days (365 divided by
10).
Year Account Payable
(Cost of Goods Sold/365
days)
Average Payment
Period(Days)
2016 MYR 1,496,366,000 MYR 740,353 2021.15
2015 MYR 1,507,651,000 MYR 643,066 2344.47
2014 MYR 1,598,105,000 MYR 694,800 2300.09
2013 MYR 1,476,393,000 MYR 661,830 2230.77

27. 27
5. Average Payment Period
The formula to obtain Average Payment Period is the account payable (current liabilities)
divided by Cost of Goods Sold which is divided by 365 days.
Year Account Payable
(Cost of Goods Sold/365
days)
Average Payment
Period(Days)
2016 MYR 1,496,366,000 MYR 740,353 2021.15
2015 MYR 1,507,651,000 MYR 643,066 2344.47
2014 MYR 1,598,105,000 MYR 694,800 2300.09
2013 MYR 1,476,393,000 MYR 661,830 2230.77

28. 28
6. Total Asset Turnover
This ratio measures how efficiently a firm is using its assets in generating sales. The formula to
obtain Total Asset Turnover is the Sales (Revenue) divided by Total Assets.
Year Sales Total Assets Total Asset Turnover
2016 MYR 2,957,617,000 MYR 6,220,155,000 0.48
2015 MYR 3,108,506,000 MYR 6,615,678,000 0.47
2014 MYR 2,904,723,000 MYR 5,305,986,000 0.55
2013 MYR 2,005,596,000 MYR 4,583,751,000 0.44

29. 29
7. Debt Ratio
This ratio indicates the percentage of the firm's assets that are financed by debt (implying that
the balance is financed by equity). This ratio can be obtained by the formula which is Total
Debt(total liabilities) divided by Total Assets.
Year
Total
Debt
Total
Assets Debt Ratio
2016 MYR 2,384,028,000 MYR 6,220,155,000 0.38
2015 MYR 2,931,583,000 MYR 6,615,678,000 0.44
2014 MYR 3,027,675,000 MYR 5,305,986,000 0.57
2013 MYR 2,620,472,000 MYR 4,583,751,000 0.57

30. 30
8. Times Interest Earned
This ratio indicates the amount of operating income available to service interest payments. The
formula used to obtain Times Interest Earned is the operating profits (Gross Profit – Income,
Selling & Administrative Expenses) divided by interest expense.
𝑇𝑖𝑚𝑒𝑠 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐸𝑎𝑟𝑛𝑒𝑑 =
𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝑃𝑟𝑜𝑓𝑖𝑡𝑠
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐸𝑥𝑝𝑒𝑛𝑠𝑒
Year Operating Profit Interest Expense Times Interest Earned
2016 MYR 477,576,000 MYR 4,333,000 110.22
2015 MYR 499,963,000 MYR 6,324,000 79.06
2014 MYR 453,449,000 MYR 4,664,000 97.22
2013 MYR 368,748,000 MYR 3,257,000 113.22

31. 31
9. Gross Profit Margin
The formula to obtain Gross Profit Margin is the Gross Profit (Revenue – Cost of Sales) divided
by the Net Sales (Revenue).
Year Gross Profit Sales Gross Profit Margin
2016 MYR 745,465,000.00 MYR 2,957,617,000.00 0.252
2015 MYR 794,368,000.00 MYR 3,108,506,000.00 0.256
2014 MYR 782,559,000.00 MYR 2,904,723,000.00 0.269
2013 MYR 608,660,000.00 MYR 2,005,596,000.00 0.303

32. 32
10. Operating Profit Margin
The formula to obtain Operating Profit Margin is the profit after operating expenses (Gross Profit
– Income, Selling & Administrative Expenses) divided by the Net Sales
Year
Gross Profit after
Operating Sales
Operating Profit
Margin
2016 MYR 477,576,000.00
MYR
2,957,617,000.00 0.161
2015 MYR 499,963,000.00
MYR
3,108,506,000.00 0.161
2014 MYR 453,449,000.00
MYR
2,904,723,000.00 0.156
2013 MYR 368,748,000.00
MYR
2,005,596,000.00 0.184

33. 33
11. Fixed Payment Coverage Ratio
The formula to obtain Fixed Payment Coverage Ratio is the Earning Before Interest and Taxes
add Lease Payments divided by the Interest Payment adding Lease Payments plus Principal
Payments and Preferred Stocks Dividends multiply with tax percentage. The Lease Payment is
derived from Non-Current Liability and the Principal Payment is derived from Term Loans only in
Non-Current Liabilities. There is no Preferred Stock in this case, so the numeral will be shown
as 0.
Year EBIT
Lease
Payment
Interest
Payment
Principal
Payment Preferred Tax
Fixed
Payment
Coverage
Ratio
2016
MYR
477,576,000
MYR
887,662,000
MYR
9,696,000
MYR
859,085,000 0 24 0.673
2015
MYR
499,963,000
MYR
1,423,932,000
MYR
10,054,000
MYR
1,099,789,000 0 25 0.663
2014
MYR
453,449,000
MYR
1,429,570,000
MYR
6,227,000
MYR
1,089,815,000 0 25 0.652
2013
MYR
368,748,000
MYR
1,144,079,000
MYR
6,013,000
MYR
756,470,000 0 25 0.701

34. 34
12. Net Profit Margin
The formula to obtain Net Profit Margin is Net Profit (Profit Before Tax) divided by Net Sales
(Revenue).
Year Net Profit Sales Net Profit Margin
2016
MYR
482,939,000.00
MYR
2,957,617,000.00 0.163
2015
MYR
503,693,000.00
MYR
3,108,506,000.00 0.162
2014
MYR
455,012,000.00
MYR
2,904,723,000.00 0.157
2013
MYR
371,504,000.00
MYR
2,005,596,000.00 0.185

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13. Return on Total Assets (ROA)
The formula to obtain Return on Total Assets is Earnings Available for common stock holders
divided by Total Assets
Year
Earnings Available for common
stock holders Total Assets
Return on Total
Assets(ROA)
2016 360,312,000.00 6,220,155,000 5.79
2015 384,634,000.00 6,615,678,000 5.81
2014 337,663,000.00 5,305,986,000 6.36
2013 279,261,000.00 4,583,751,000 6.09

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14. Return on Common Equity (ROE)
The formula to obtain Return on Common Equity is Net Income divided by Total Common
Equity
Year Net Income Total Common Equity
Return on Common Equity
(ROE)
2016 360,312,000.00 3,836,127,000 9.39
2015 384,634,000.00 3,684,095,000 10.44
2014 337,663,000.00 2,278,311,000 14.82
2013 279,261,000.00 1,963,279,000 14.22

37. 37
15. Earnings per Share (EPS)
The formula to obtain Earning per Share is Earnings Available for Common Stockholders
divided by Number of Shares of Common Stock Outstanding
Year
Earnings Available for
Common Stockholders
Number of Shares of
Common Stock
Outstanding
Earnings per Share
(EPS)
2016 360,312,000.00 2,409,419,000 0.15
2015 384,634,000.00 2,340,937,000 0.16
2014 337,663,000.00 1,446,849,000 0.23
2013 279,261,000.00 1,303,917,000 0.21

38. 38
16. Price per Earning (P/E)
The formula to obtain Price per Earning is Market Price per Share divided by Earnings per
Share
Year Market Price per Share
Earnings per
Share Price per Earning (P/E)
2016 1.43 0.15 9.56
2015 1.45 0.16 8.82
2014 1.65 0.23 7.07
2013 1.65 0.21 7.70

39. 39
17. Price per Book Ratio (P/B)
The formula to obtain Price per Book Ratio is Market Price per Share divided by Equity Book
Value per Share
Year
Market Price per
Share
Equity Book Value per
Share
Price per Book Ratio
(P/B)
2016 1.43 1.59 0.90
2015 1.45 1.57 0.92
2014 1.65 1.57 1.05
2013 1.65 1.51 1.10

40. 40
i) Conclusion & Recommendation
According to the four(4) financial years starting from 2016 to 2013, various financial analysis
tools and formula ratio are conducted to analyze the financial condition of Mah Sing Group
Berhad (MSGB). The liquidity of the company is decent where the Quick Ratio shows a hike
where MSGB has the ability to generate their current assets to pay their debts. Moreover, the
current ratio also rose but according to Muralidhar (2010), the ideal ratio for current ratio is 2:1.
MSGB ratio has reach to a ratio of 3:1 where a high ratio indicates under trading and over
capitalization. The decrease in Inventory Turnover shows that MSGB doesn’t effectively sell the
inventories, meanwhile the Average Collection Period has increase and the Average Payment
Period has decrease where the ability to receive and repay debts show signs of unsatisfying.
The Total Asset Turnover is constant and stable in the past 4 years. Furthermore, the Debt
Ratio has improved and reach an ideal ratio of lower than 0.4 where they are considered as
good Debt Ratio. Most of the investors will look for a company of having a Debt Ratio between
0.3 to 0.6 where MSGB are qualified to be considered to invest in. The Times Interest Earned
doesn’t show any enormous changes over the 4 years but a constant state means that the firm
is in better position to make principal and interest payments on time. Similar to Times Interest
Earned, the Fixed Payment Coverage Ratio also shows a stable growth over the year where
there is no significant drop in earnings which shows that the company can cover its fixed charge
at a faster rate.
In additional, the Gross Profit Margin for MSGB shows a drop over the years which mean the
money that are left over from revenues are lesser. The Operating Profit Margin is in the stable
state during 2016 to 2014 after a huge downturn since 2013, but the higher the Operating Profit
Margin means the company is earning more money derived from sales. Based on the scenario,
it shows that MSGB is earning an average of money throughout the 3 years. The Net Profit
Margin shows a similar status in terms of ratio as Operating Profit Margin, which means the
internal cash flow of MSGB is stable.

41. 41
The Return on Total Assets shows a stable sign in using their assets efficiently and effectively.
Unlike Return on Total Assets, the Return on Common Equity and Earning Per Shares shows a
slight drop over the years, which means the profit that are generated by the shareholder are
keen reducing and the company profitability is not that satisfying.
In a nutshell, although the Gross Profit Margin indicates the money generate from revenue has
become lesser, but the MSGB Quick Ratio still shows a satisfying result where the money to
repay debt is in the ideal state. It also shows that the excess money that are left are properly
invested where the value of money from present differs to the future. But the Inventory Turnover
doesn’t work progressively throughout the 4 years, which means over development doesn’t
bring profit in the short run but may differ in the long run as the value of the property may
appreciate over time. In terms of investing or not investing may need to be determined to other
similar company in accordance to Price per Earning and Price per Book Ratio.