Financial Management Report

Financial Management Group Assignment / Dec17
SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN
BACHELOR OF QUANTITY SURVEYING (HONOURS)
MARCH 2015 INTAKE
SEMESTER 5 (AUGUST 2017)
FIN60203 FINANCIAL MANAGEMENT
GROUP ASSIGNMENT: REPORT
GROUP NAME : GROUP 4
LECTURER : MS. TAY SHIR MEN
DATE OF SUBMISSION : 8TH DECEMBER 2017

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Names: Student IDs:
CHUANG JING 0322934
KOH WEN QI 0323355
LEONG KARR KHEI 0324362
LOH PEY MUN 0318572
LOH WEI LING 0319225
YEO DOR EEN 0316224
Programme: Bachelor ofQuantity Surveying (Honours),SCHOOL OFARCHITECTURE, BUILDING & DESIGN
Email (Group Leader): kohkoh3@hotmail.com ContactNo (Group Leader): 016-7379292
Subjectcode and title: QSB3413/QSB3414/FIN60203FINANCIAL MANAGEMENT
Module Lecturer/ Tutor: Tay Shir Men
Assignmentnumber: Group Written Assignment Due date: 8 December 2017
Assignmenttopic as stated in the guidelines provided: Businessand financial analyses and forecasts ofa company.
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Student Names and IDs:
CHUANG JING 0322934
KOHWEN QI 0323355
LEONG KARR KHEI 0324362
LOHPEY MUN 0318572
LOHWEI LING 0319225
YEO DOR EEN 0316224
Programme: Bachelor ofQuantity Surveying (Honours),SCHOOLOF ARCHITECTURE,BUILDING & DESIGN
Email : kohkoh3@hotmail.com ContactNo : 016-7379292
Module code and title: QSB3413/QSB3414/FIN60203FINANCIAL MANAGEMENT Module Lecturer/ Tutor: Tay Shir Men
Assignmentnumber: Group Written Assignment Due date: 8 December 2017 Word Count: 5469
Assignmenttopic as stated in the guidelines provided: Business and financial analysesand forecasts ofa company.
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
principal activities, and
strategic plans of the 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Irrelevant, outdated, little evidence of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.
Financial analysis 70 # Excellent
Accurate calculations of the latest financial
data over two years, comparison with
industry data, well-reasoned analyses.
Multiple errors in calculations showing
lack of understanding, fails to evaluate
company by comparing with relevant
industry data, no reasoned analysis of
financial data.
Financial forecasts 10 # Excellent
Accurate calculations and correct
conclusions. Excellent ev aluation
of the projected cash requirements.
Multiple errors in calculations
showing lack of understanding.
Forecasts without any basis or
justification. Missing or inv alid
conclusions and analy ses.
Structure and presentation,
language, reference of sources
5 # Excellent
Excellent headings/sub-headings, layout,
pagination. Excellent grammar, spelling.
Effective/accurate use of figures and
tables. Excellent references of sources.
Inappropriate or no headings, poor and
confusing layout, inappropriate or no
numbering. Weak grammar, many spelling
mistakes, ineffective/inaccurate use of
figures and tables. Poor or no references
of sources.
Penalty
Total (100%)
Final score (25%)
Any additionalcomments(if there is any):
Assessed by: Date:
Sample Moderated by (ifany): Date:
ASSIGNMENT FEEDBACK GRADE/ MARK

TABLE OF CONTENTS
CHAPTER TITLE PAGE
Assignment Cover Sheet
Assignment Feedback
Table of Contents
List of Tables
List of Figures
List of Appendices
1.0 Corporate Overview 1
1.1 Board of Directors 2
1.2 Vision and Mission 3
1.3 Shareholders 4
2.0 The Principle Activities of the Company 5
3.0 Analysis of the Revenue Contributions of the Different 6
Segments
4.0 Evaluation of Current State of the Main Industry 7 – 8
5.0 Company’s Strengths and Weaknesses
5.1 Strengths 9
5.2 Weaknesses 10
6.0 Company’s Strategic Plans 11
7.0 Company’s Major Capital Investment and Major Sources 12 – 14
of Funding
8.0 Evaluation on Financial Ratio
8.1 Liquidity 15
8.1.1 Current Ratio 16
8.1.2 Quick Ratio 17

TABLE OF CONTENTS (CONT’D)
CHAPTER TITLE PAGE
8.2 Activity 18
8.2.1 Inventory Turnover 19
8.2.2 Average Collection Period 20
8.2.3 Average Payment Period 21
8.2.4 Total Asset Turnover 22
8.3 Debt 23
8.3.1 Debt Ratio 24
8.3.2 Times Interest Earned 25
8.3.3 Fixed Payment Coverage Ratio 26
8.4 Profitability 27
8.4.1 Gross Profit Margin 28
8.4.2 Operating Profit Margin 29
8.4.3 Net Profit Margin 30
8.4.4 Return on Total Assets 31
8.4.5 Return on Common Equity 32
8.4.6 Earnings Per Share 33
8.5 Market Performance 34
8.5.1 Price-to-Earnings Ratio 35
8.5.2 Price-to-Book Ratio (P/B) 36
9.0 Company’s Free Cash Flow 37
10.0 Evaluation of Changes in Company’s Cash Flow 38 - 39
11.0 Conclusion and Recommendation 40
Reference
Appendices

LIST OF TABLES
TABLE NO. TITLE PAGE
1.1 List of Shareholders (4-Traders,2017) 4
8.1 Liquidity Ratio Analysis for the Last 4 Financial Years 15
8.2 Activity Ratio Analysis for the Last 4 Financial Years 18
8.3 Debt Ratio Analysis for the Last 4 Financial Years 23
8.4 Profitability Ratio Analysis for the Last 4 Financial Years 27
8.5 Market Ratio Analysis for the Last 4 Financial Years 34
9.1 Free Cash Flow for the Last 5 Financial Years 37

LIST OF FIGURE
FIGURE NO. TITLE PAGE
3.1 Revenue Contributions of the Different Segments from 6
2013 to 2016
7.1 Statements of Cash Flows for the Financials Year Ended 12
31 December 2014
31 December 2015
31 December 2016
7.4 Capital Commitments for the Financial Year Ended 13
31 December 2014
31 December 2015
31 December 2016
8.1 Current Ratio for the Last 4 Financial Years 16
8.2 Quick Ratio for the Last 4 Financial Years 17
8.3 Inventory Turnover for the Last 4 Financial Years 19
8.4 Average Collection Period for the Last 4 Financial Years 20
8.5 Average Payment Period for the Last 4 Financial Years 21
8.6 Total Asset Turnover for the Last 4 Financial Years 22
8.7 Debt Ratio for the Last 4 Financial Years 24
8.8 Times Interest Earned for the Last 4 Financial Years 25
8.9 Fixed Payment Coverage Ratio for the Last 4 Financial 26
Years
8.10 Gross Profit Margin for the Last 4 Financial Years 28
8.11 Operating Profit Margin for the Last 4 Financial Years 29
8.12 Net Profit Margin for the Last 4 Financial Years 30
8.13 Return on Total Assets for the Last 4 Financial Years 31
8.14 Return on Common Equity for the Last 4 Financial Years 32
8.15 Earnings Per Share for the Last 4 Financial Years 33

LIST OF FIGURE (cont’d)
FIGURE NO. TITLE PAGE
8.16 Price-to-Earnings Ratio (P/E) for the Last 4 Financial 35
Years
8.17 Price-to-Book Ratio (P/B) for the Last 4 Financial Years 36
10.1 Cash Flows Activities for the Last 5 Financial Years 38

LIST OF APPENDICES
APPENDIX TITLE
A Financial Data
AA Statement of Profit or Loss
AB Statement of Profit or Loss and Other Comprehensive Income
AC Statements of Financial Position
AD Statement of Cash Flows
B Ratio’s Formulas and Calculations
1 Current Ratio
2 Quick Ratio
3 Inventory Turnover
4 Average Collection Period
5 Average Payment
6 Total Asset Turnover
7 Debt Ratio
8 Time Interest Earned
9 Fixed Payment Coverage Ratio
10 Gross Profit Margin
11 Operating Profit Margin
12 Net Profit Margin
13 Return on Total Asset
14 Return on Common Equity
15 Earnings Per Share (EPS)
16 Price Earnings
17 Price Book Ratio

1
1.0 Corporate Overview
Recognized as one of the leading property developer in Malaysia, Mah Sing Group
Berhad with a 20-year history and a demonstrated reputation of developing and completing
prime private and business extends deliberately over Malaysia's property hotspots (Mah Sing,
2017). It is a fully integrated developer engages with residential, commercial and industrial
developments (Mah Sing Annual Report, 2016).
The organization was established by Leong Hoy Kum in 1965. The headquarter is
located at our country capital, Kuala Lumpur. Mah Sing Group was listed on the Main Board
of Bursa Malaysia in the year of 1992 and soon ventured into property development in 1994
(Mah Sing Annual Report, 2016). There are a total of 1879 employees in the company today.
Mah Sing Group aims to become a world class company with high quality products
and excellent services delivered to customers with the philosophy of maximizing shareholder’s
value.

2
1.1 Board of Directors
Jen. Tan Sri Yaacob Bin Mat
•Chairman / Independent
Non-Executive Director
Tan Sri Dato' Sri Leong Hoy
Kum
•Group ManagingDirector /
Group Chief Executive
Datuk Ho Hon Sang
•Chief Executive Officer /
Executive Director
Dato' Steven Ng Poh Seng
•Executive Director
Leong Yuet Mei
•Executive Director
Captain Izaham Bin Abd.
Rani (R)
•Independent Non- Executive
Director
Loh Kok Leong
•Independent Non-Executive
Director
Jane Leong Jheng-Yi
•Alternate Director to Tan Sri
Dato' Sri Leong Hoy Kum

3
1.2 Vision and Mission
Vision
 Inventing future living that enhances quality of life.
Mission
 Empowering our people towards personal and professional growth through
continuous learning.
 Anticipating future market trends and providing the right solutions.
 Delivering our quality promise.
 Caring for the people, community and the environment.

4
1.3 Shareholders
Holder Shares Percentage held
Mayang TerataiSdn. Bhd. 653,038,200 27.0%
Permodalan Nasional Bhd. 358,253,102 14.8%
Employees Provident Fund 214,289,061 8.86%
Hoy Kum Leong 190,319,007 7.87%
Lembaga Tabung Haji 141,143,900 5.84%
Kumpulan Wang Persaraan 112,551,085 4.65%
Lynas Capital Ltd. 61,000,000 2.52%
Value Partners Ltd 55,231,246 2.28%
Dimensional Fund Advisors LP 40,895,049 1.69%
Eastspring Investments (Singapore) Ltd. 26,866,145 1.11%
Table 1.1 List of shareholders (4-Traders, 2017)

5
2.0 The Principal Activities ofthe Company
There are currently 46 projects developed by Mah Sing Group Berhad acrossMalaysia.
The projects are located at Kuala Lumpur, Klang Valley, Penang, Johor Bahru and Kota
Kinabalu (Sabah). The company has a solid business with medium and high end landed and
high rise residential properties, Grade A buildings, integrated business parks and mixed
commercial developments. (The Wall Street Journal, 2017)
Apart from properties, Mah Sing Group also owns plastic segment that include
manufacture, assemble and trading of a range of plastic moulded products (The Wall Street
Journal, 2017). Mah Sing Plastic Industries Sdn. Bhd. (MSPI) is one of the main high-tech
plastic manufacturer company in Malaysia as well as in Indonesia. The investment holding and
others segment focuses on venture holding operations, provision of administration, properties
support administrations and trading of construction materials. (Mah Sing Annual Report, 2016)
In the 7th
consecutive year, the group has managed to achieve annual property sales in
the billion ringgit range. This feat has been maintained through the proper planning and
strategic launches of the products that meet current market demands (Mah Sing Annual Report,
2016).

6
3.0 Analysis ofthe Revenue Contributions ofthe Different Segments
Referring to the data from the annual report from year2013 to 2016, properties segment
of Mah Sing Group earnedthe most revenue compared to plastics segment and others. Revenue
on this segment getting increase from year 2013 to 2015, then slightly drop in value on 2016,
but it is still considered performing good.
Plastic segment has a stable performance every year and meanwhile other segments
have the best performance on 2016 compared to its performance on previous years. Properties
segment as the core business of the group earned the most revenue from major customers.
Overall, the findings show that properties segment is the best performer.
Figure 3.1 Revenue contributions of the different segments from 2013 to 2016
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
2013 2014 2015 2016
Revenue(RM)
Year
Revenue contributions of different segments from
2013 to 2016
Properties segment Plastics segment Others

7
4.0 Evaluation of Current State ofthe Main Industry
As justified by CIDB Malaysia, the construction industry is paramount to the
Malaysian economy and its growth. The construction industry currently contributes 4 per cent
to the Malaysian Gross Domestic Product (GDP). Furthermore, it is expected to contribute 5.5
per cent to the Malaysian GDP in the light of Malaysian vision 2020.
Malaysia’s construction industry is forecasted to bloom by eight percent to RM170
billion in 2017 as compared to 2016 which is 7.4 percent or RM166 billion. The reason being
that the industry is supported by a large number of major infrastructure projects, reported by
Bernama. As mentioned by Construction Industry Development Board’s (CIDB) CEO Datuk
Ahmad Asri Abdul Hamid, large-scale projects that will trigger this industry include the Mass
Rapid Transit Two in Klang Valley, Pan Borneo Highway linking Sarawak and Sabah and
Johor’s Refinery and PetrochemicalIntegrated Development (RAPID).
In order to maintain the steady growth of the industry, The Ministry of Works (MOW)
collaborating with Construction Industry Development Board (CIDB) had successfully
introduced the Construction Industry Transformation Programme (CITP). Our Prime Minister
highlighted that this programme could enforce the highest standards of quality, safety and
professionalism of the industry. Moreover, it could improve global competitiveness of local
construction industry.

8
4.0 Evaluation of Current State ofthe Main Industry (cont’d)
Besides, CITP also play a pivotal role in promoting Industrialised Building System
(IBS) and Building Information Modelling (BIM).According to MIDFResearch,they believed
that the construction company can boost their financial performance by adopting IBS and BIM.
(Borneo Post Online, 2016). As reported by The StarOnline, IBS would help to improve speed,
reduce reliance on manpower and would be capable to generate extra profits. As a result, it will
lead to reduction of rework and shorten deliverable times that benefit owners and the industry
at large.
Like any other industry, the domestic construction industry does encounter plenty of
challenges. The major problem inherited in every project is an acute shortage of manpower.
Due to the nature of labour intensive, Malaysia’s construction sector needs an estimated 1.3
million construction workers every year. Master Builders Association of Malaysia (MBAM)
president Foo Chek Lee disclosed that the industry needs 600,000 to 800,000 more foreign
workers in order to the meet estimated 1.3 million workers in the industry (Hoh, 2017 ).
Another challenge to address is that the unfavourable Malaysia Ringgit exchange rate.
The extent of fluctuation causes the material price to be more expensive. The price of steelbar
constantly change is a good example of the impact due to Ringgit’s fluctuation. In recent years,
the crude oil price has fluctuated tremendously. Several economic sectors including
construction sector has significantly affected by the oil price fluctuation. The cost of raw
material getting higher as the rising price of oil. For example, the supplier will increase the raw
material price to cover the higher shipping costs. The rise and fall phenomena had greatly
influenced the performance of this industry.

9
5.0 Company’s Strengths and Weaknesses
5.1 Strengths
1. Strong brand recognition. The group successfully built a strong brand name over the
years, in delivering satisfying and demanding products on a scheduled basis that meet
the either needs or requirements of purchasers.
2. Excellent quality and reliable services. The group recruited quality assurance teamthat
guarantee all their projects meet and exceed stringent quality standards. They are
adopting international best practices in ensuring quality and have sought CONQUAS
(Construction Quality Assessment System) certification by BCA Singapore (Building
and Construction Authority) for all new residential projects. Furthermore, the group
has the honour of being the first and only developer accorded the CONQUAS award
for an office building in Malaysia, which is The Icon Tun Razak.
3. Strong researchanddevelopment team.The group took initiatives to define and analyze
the current market’s needs. The team is able to identify latest trends that appeal to the
market. For instance, in the residential segment, they identified the trend of super-link,
semi-detached and bungalow developments in a gated-and-guarded environment with
plenty of facilities. For the industrial segment, the group seized the opportunity for
niche semi-detached industrial properties in the Klang Valley which consequently
achieved brisk sales for iParc 1, 2 and 3.
4. Geographical diversification. Domestically, the group has developments in three
regions which are Klang Valley, Johor and Penang. These regions are known as the
‘hottest spot’ in Malaysia due to their high population and limited medium-cost housing
supply. The group are looking forward diversify their construction business abroad in
China, Vietnam, Singapore and Australia.

10
5.2 Weaknesses
1. Relatively low inventory turnover over the past three years except Year 2013.
Generally, a low inventory turnover ratio is a signal of bad sales or surplus inventory
which can be interpreted as poor liquidity, overstocking and even obsolescence.
2. Poor financial management asthe Return on Common Equity decrease fromYear2013
to Year2016. The lower the ROE,the least betterthe company atgenerating profit with
the equity it has.
3. Lowering property prices to generate sales,intense competitions and high cost of
goods sold result in declining gross profit margin from Year 2013 to 2016.

11
6.0 Company’s Strategic Plans
An efficient strategic planning is very important for a company. As with any company
Mah Sing Group may face many opportunities and challenges. Opportunities always come
along with challenges; means profit come with risk. For example, competitor challenges,
market challenges, financial management and others. So, Mah Sing Group is focusedon finding
acceptable growth opportunities without taking on too much risk. In any financial year, the
fluctuation’s of the group’s revenue, profit and operating cash flow may occur depending on
the sales performance, value and construction progress of the projects undertaken of each year.
Although all the project are in the different construction stages,but Mah Sing Group will allow
and ensure the group to have a sustainability in terms of profit and healthy cash flow.
As with any business, the Group may face competition from its peer, but, Mah Sing
with a strong branding, strategically located land banks as well as an established track record,
the Group will continue to take measure to address the competition risk such as conducting
market intelligence studies to understand buyer’s needs, monitoring and adjusting development
products and marketing strategies in response to changing economic conditions and market
demand. Besides that, the property industry will face a challenge, which is changing
environment but Mah Sing Group have the confidents that with the Group’s strong brand name,
strategically placed established developments and right product strategies, so the Group will
continue to move forward resiliently.
As a key player in the property development industry, quality remains at the forefront
of everything. Mah Sing Group aim to improve the quality are always ongoing and to have
outlined several key initiatives to enhance the quality of the customer service, the Group
developments and also in their group people. Additionally, Mah Sing Group is looking or new
ways to raise the bar higher and to push the envelope further. Their aim is to ensure full
customer satisfaction through the consistent delivery of high quality projects and services.They
are confident that with their proven strategies before, a well-established brand name and the
right portfolio of products, the Group will continue to distinguish therselves in the property
market. “ Do not be afraid of changes. Change for the better and strive for excellence’, said by
the Group Chief Executive of the Group, Tan Sri Dato’ Sri Leong Hoy Kum. Mah Sing, which
will continue to work towards building better lives, reinvent spaces to enhance life.

12
7.0 Company’s Major Capital Investment and Major Sources ofFunding
Mah Sing Group Berhad operates in three segments are properties, plastics and
investment holding and management. Its properties segment is engaged in the investment,
construction, management and development of residential, commercial and industrial
properties. Its plastic segment is engaged in the manufacture, assembly, and sale of a range of
plastic molded products. Its and investment holding and management are investment holding
operations, provision of management and property support services and trading of building
materials. Below are the major capital investment of the Mah Sing Group Berhad in year 2014,
2015 and 2016.
Figure 7.1 Statements of Cash Flows for the Financial Year Ended 31 December 2014

13
7.0 Company’s Major Capital Investment and Major Sources ofFunding (cont’d)
Besides that, below are the capital commitments of the Mah Sing Group Berhadin year
2014, 2015 and 2016.
Figure 7.4 Capital Commitments for the Financial Year Ended 31 December 2014

14
7.0 Company’s Major Capital Investment and Major Sources ofFunding (cont’d)
The major sources of funding for these investments are the company comprises net
debt such as, borrowings offset by deposit, cash, bank balances and investment in short-term
funds and equity such as, comprising issued capital, reserves, Perpetual Sukuk and non-
controlling interests. Furthermore, the Group also issues their share capital, warrants, and
secured bond for funding. The Group also borrows for short or long term loan and overdraft
form bank.

15
8.0 Evaluation on Financial Ratio
8.1 Liquidity
Ratio 2013 2014 2015 2016
Current Ratio 2.537 2.543 3.426 3.101
Quick Ratio 0.851 0.726 1.234 0.969
Table 8.1: Liquidity Ratio Analysis for the Last 4 Financial Years

16
8.1.1 Current Ratio
Figure 8.1: Current Ratio for the Last 4 Financial Years
Current Ratio is a liquidity ratio that measures a company's ability to pay short-term
and long-term obligations. To be enabled to identify it, the current ratio considers the
current total assets of a company relative to that company's current total liabilities.
Current Ratio, stated in Year 2013 and Year 2014 has around the same value, but its
lower compared to the two following years. While, there is a sudden shoot up in Year 2015.
This shows that the company could meet its short-term financial obligations a lot better. Later
on, a slight drop in Year 2016, it is not a drastic drop hence the company is still able to handle
its commitments.
2.537 2.543
3.426
3.101
0
0.5
1
1.5
2
2.5
3
3.5
4
2013 2014 2015 2016
Percentage%
Year
CurrentRatio
Current Ratio

17
8.1.2 Quick Ratio
Figure 8.2: Quick Ratio for the Last 4 Financial Years
Quick Ratio is a measure of how well a company can meet its short-term financial
liabilities. It also known as the acid-test ratio.
Quick ratio stated in Year 2014 is the lowest among the 4 years, this shows the
company most possibly has difficulty meeting its short-term financial liabilities. A sudden
rise in quick ratio can be seen in Year 2015 and continue with a drop on the following year
2016. Observing from the data receive in Year 2015, we can state that Mah Sing Group has a
better short-term financial liability, for example decrease in exchange of financial assets or
financial liabilities with another entity under certain conditions.
0.851
0.726
1.234
0.969
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
2013 2014 2015 2016
Percentage%
Year
Quick Ratio
Quick Ratio

18
8.2 Activity
Ratio 2013 2014 2015 2016
Inventory Turnover (Times) 3.169 1.639 1.233 0.751
Average Collection Period (Days) 215.215 199.276 181.089 186.982
Average Payment Period (Days) 444.561 804.276 819.999 822.028
Total Asset Turnover (RM)
Follow Year 2016
0.437 0.545 0.470 0.475
Total Asset Turnover (RM)
Follow Each Year
0.438 0.547 0.470 0.475
Table 8.2: Activity Ratio Analysis for the Last 4 Financial Years

19
8.2.1 Inventory Turnover
Figure 8.3: Inventory Turnover for the Last 4 Financial Years
Inventory Turnover is used to measure how many times the company is turning over
its inventory during the year, mainly to investigate liquidity of a firm’s inventory.
As an overall trend, the inventory turnover decreased drastically for the last 4
financial years owing to the construction industry economy has turned down and/or the
impose of Goods and Services Taxes. No monitoring of items against maximum limit causing
over stock may be one of the reasons too. The ratio dropped from 3.169 times in Year 2013 to
0.751 times in Year 2016, approximately total dropped by 2.5 times. By dividing 365 days to
the inventory turnover times, we found out that this company sells its inventory every 115.18
days in Year 2013 and every 486.02 days in Year 2016.
A decreasing inventory indicates that the company is not converting its inventory into
cash as quickly as before. When this occurs,the company ends up having increased storage,
insurance and maintenance costs.
3.169
1.639
1.233
0.751
0
0.5
1
1.5
2
2.5
3
3.5
4
2013 2014 2015 2016
Times
Inventory Turnover
Inventory Turnover

20
8.2.2 Average Collection Period
Figure 8.4: Average Collection Period for the Last 4 Financial Years
Average Collection Period is the average number of days taken to collect the firm’s
receivables. The average collection period is an important component of the cash conversion
cycle. Companies with small collection periods tend to have better cash flow and to be more
financially solvent.
From the obtained data between Year 2013 and Year 2015, the average collection
period dropped from 215.215 days to 181.089 days. This is a good sign because a lower
average collection period is more favourable than a higher one. A low average collection
period indicates that the organization can collect their payment in a shorter period, however
longer period may affect the firm’s ability of paying its short-term debt. In Year 2016, the
average collection period slightly increases to 186.982 days.
215.215
199.276
181.089 186.982
0
50
100
150
200
250
2013 2014 2015 2016
Days
AverageCollection Period
Average Collection Period

21
8.2.3 Average Payment Period
Figure 8.5: Average Payment Period for the Last 4 Financial Years
Average payment period means the average period taken by the company in making
payments to its creditors. It is computed by dividing the number of working days in a year by
creditor turnover ratio.
From the graph, the average payment period had increased drastically from 444.561
days in Year 2013 to 804.276 days in Year 2014 which indicates that they used longer period
to make payment to creditors in Year 2014. Then, the average payment period slightly
increased in the following years. The high average payment period means that it may create
the risk for the liquidity position because some creditor can demand and the company may
forget to pay in long period. In fact, one month or two month is best time period of the
creditors.
444.561
804.276 819.999 822.028
0
100
200
300
400
500
600
700
800
900
2013 2014 2015 2016
Days
AveragePaymentPeriod
Average Payment Period

22
8.2.4 Total Asset Turnover
Figure 8.6: Total Asset Turnover for the Last 4 Financial Years
The total asset turnover measures how efficiently a firm is using its assets in
generating sales. It is computed by dividing total sales by total assets for a given period.
From Year 2013 to Year 2014, it grew from RM 0.44 to RM 0.55. The number RM
0.55 means that the company is generating RM 0.55 in sales for every RM1 invested in assets.
Generally speaking, the higher the total asset turnover ratio, the better the company is
performing, since higher ratios imply that the company is generating more revenue per ringgit
of assets. The total asset turnover decreased from the Year 2014 to Year 2015 which indicates
that the company’s assets are losing their ability to generate sales. Thus, the company is not
performing well in 2015. But in Year 2016, the total asset turnover slightly increased.
It is important for the company to keep track and improve their asset turnover ratio at
regular intervals since this ratio helps to measure how productive the business is and how
much revenue is generated from its investment in the assets.
0.437
0.545
0.47 0.475
0
0.1
0.2
0.3
0.4
0.5
0.6
2013 2014 2015 2016
RM
Total AssetTurnover
Total Asset Turnover (Follow Year 2016) Total Asset Turnover (Follow Each Year)

23
8.3 Debt
Ratio 2013 2014 2015 2016
Debt Ratio (%) 57.2 57.1 44.3 38.3
Times Interest Earned (Times) 113.217 97.223 79.058 110.218
Fixed Payment Coverage Ratio (Times) 0.354 0.332 0.379 0.343
Table 8.3: Debt Ratio Analysis for the Last 4 Financial Years

24
8.3.1 Debt Ratio
Figure 8.7: Debt Ratio for the Last 4 Financial Years
Debt Ratio is defined as the ratio of total – long-term and short-term – debt to total
assets,expressed as a decimal or percentage. It can be interpreted as the proportion of a
company's assets that are financed by debt.
The debt ratio stated in the figure above shows that in Year 2013 and Year 2014, the
data received is higher compared to Year 2015 and Year 2016. From the knowledge we
learned from debt ratio is that the higher the ratio, the more leveraged the company is,
implying greater financial risk. Hence in Year 2013 and Year 2014, the company most
probably has a greater financial risk compared to the two consecutive years,for example the
company may have more debts than assets.
57.2 57.1
44.3
38.3
0
10
20
30
40
50
60
70
2013 2014 2015 2016
Percentage%
Year
Debt Ratio （%）
Debt Ratio（%）

25
8.3.2 Times Interest Earned
Figure 8.8: Times Interest Earned for the Last 4 Financial Years.
Times Interest Earned (TIE) is a metric used to measure a company's ability to meet
its debt obligations. The formula is calculated by taking a company's earnings
before interest and taxes (EBIT) and dividing it by the total interest payable on bonds and
other contractual debt.
Time interest earned declines from Year 2013, Year 2014, Year 2015 and later on a
sudden shoot up in Year 2016. This clearly indicates that in Year 2013, Year 2014 and Year
2015 the company has difficulty in using the amount of income that can be used to cover
interest expenses. Furthermore, as in Year 2016 the company has regain a better ability to
make interest and debt service payments when they come due. In conclusion, higher ratios are
less risky while lower ratios indicate credit risk.
113.217
97.223
79.058
110.218
10
30
50
70
90
110
130
150
2013 2014 2015 2016
Times
Year
Time InterestEarned
Time Interest Earned

26
8.3.3 Fixed Payment Coverage Ratio
Figure 8.9: Fixed Payment Coverage Ratio for the Last 4 Financial Years.
Fixed Payment Coverage Ratio is defined as a measure of a firm's ability to meet
its fixed-charge obligations: the ratio of (Earnings before interest, depreciation and
amortization minus unfunded capital expenditures and distributions) divided by total debt
service (annual principal and interest payments).
According to the data we tabulate, we get to learn that within these 4 years,there are
no drastic changes that can lead to massive effect to the company. Hence the company has a
proper ability to pay all of its fixed charges or expenses with its income before interest and
income taxes. This also indicates the company is more profitable and investors are more
likely to invest in the company.
0.354
0.332
0.379
0.343
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
2013 2014 2015 2016
Times
Year
Fixed PaymentCoverageRatio
Fixed Payment Coverage Ratio

27
8.4 Profitability
Ratio 2013 2014 2015 2016
Gross Profit Margin (%) 30.35 26.94 25.55 25.20
Operating Profit Margin (%) 18.39 15.61 16.08 16.15
Net Profit Margin (%) 13.92 11.62 12.37 12.18
Return on Total Assets (%)
Follow Year 2016
6.09 6.34 5.81 5.79
Return on Total Assets (%)
Follow Each Year
6.09 6.36 5.81 5.79
Return on Common Equity (%) 25.05 23.96 23.03 20.08
Earnings Per Share (RM) 0.214 0.233 0.164 0.150
Table 8.4: Profitability Ratio Analysis for the Last 4 Financial Years

28
8.4.1 Gross Profit Margin
Figure 8.10: Gross Profit Margin for the Last 4 Financial Years
Gross profit margin measures the percentage of each sales dollar remaining after the
firm has paid for its goods. It is calculated by dividing gross profits by revenues. Normally,
more efficient or higher premium companies see higher profit margins.
From the graph, the gross profit margin has decreased gradually year by year. It was
30.35% in Year 2013 and dropped to 25.2% in Year 2016. Since the company's gross profit
margin is falling, it may look for processes that allow it to cut labour costs or for suppliers
who offer lower costs on materials. Alternatively, it may decide to increase prices to boost
revenue.
30.35
26.94
25.55 25.2
0
5
10
15
20
25
30
35
2013 2014 2015 2016
Percentage(%)
Gross ProfitMargin
Gross Profit Margin

29
8.4.2 Operating Profit Margin
Figure 8.11: Operating Profit Margin for the Last 4 Financial Years
Operating Profit Margin examines how effective the company is in managing its cost
of goods sold and operating expenses that determine the operating profit. It measures the
percentage of each sales dollar remaining after all costs and expenses,other than interest,
taxes,and preferred stock dividends are deducted.
As shown in the graph, it started to decline from 18.39% in Year 2013 to 15.61% in
Year 2014. The reasons for a decline in operating profit may be decline in sales or increase in
expenses. From Year 2014 to Year 2016, the operating profit margin slightly increased. The
more the operating profit margin, it means this company depends more on the income from
operations.
18.39
15.61 16.08 16.15
0
4
8
12
16
20
2013 2014 2015 2016
Percentage(%)
Operating ProfitMargin
Operating Profit Margin

30
8.4.3 Net Profit Margin
Figure 8.12: Net Profit Margin for the Last 4 Financial Years
Net profit margin measures the percentage of each sales dollar remaining after all
costs and expenses,including interest, taxes,and preferred stock dividends, have been
deducted. The equation to calculate net profit margin is dividing net profit by revenues. By
tracking increases and decreases in net profit margin, a business can assess whether current
practices are working or not.
The net profit margin falls under the range of 11-14% from Year 2013 to Year 2016.
It has a slightly 2% drop from Year 2013 to Year 2014 where the net profit decreased faster
than the sales. In the next two years, the net profit margin has a little increment. The higher
the net profit margin, the more efficient the firm converts its sales revenues into net profit.
13.92
11.62
12.37 12.18
0
3
6
9
12
15
2013 2014 2015 2016
Percentage(%)
Net ProfitMargin
Net Profit Margin

31
8.4.4 Return on Total Assets
Figure 8.13: Return on Total Assets for the Last 4 Financial Years
Return on Total Assets measures the overall effectiveness of management in
generating profits with its available assets. It is commonly defined as net income divided by
total assets. This ratio not only used for tracking asset-use over time, but also to monitor the
company's performance in light of industry performance,and to look at different operations
by comparing them one to the other.
The little increment from Year 2013 to Year 2014 shows a good sign as it proves the
efficiency on how the company can earn a return relative to its investment in assets. However,
return on total assets decreases from 6.34% in Year 2014 to 5.79% in Year 2016. Primarily
there can be two reasons that contribute to the decrease,either the total assets have increased
significantly or the Net Sales have dropped significantly.
6.09
6.34
5.81 5.79
0
1
2
3
4
5
6
7
2013 2014 2015 2016
Percentage(%)
Return on Total Assets
Return on Total Assets (Follow Year 2016) Return on Total Assets (Follow Each Year)

32
8.4.5 Return on Common Equity
Figure 8.14: Return on Common Equity for the Last 4 Financial Years
Return on common equity (ROE) is the amount of net income returned as a
percentage of shareholders equity. It measures a corporation's profitability by revealing how
much profit a company generates with the money shareholders have invested.
From the graph above, it decreased from 25.05% in Year 2013 to 20.08% in Year
2016. The reasons may be the company issues common shares or reduces its dividend
payments during a particular reporting period, resulting in increased equity and leads to a
lower ROE. Conversely, if the company buys back its stock or increases its dividend
payments, average equity would fall and ROE would rise.
25.05
23.96
23.03
20.08
0
4
8
12
16
20
24
28
2013 2014 2015 2016
Percentage(%)
Return on Common Equity
Return on Common Equity

33
8.4.6 Earnings Per Share
Figure 8.15: Earnings Per Share for the Last 4 Financial Years
Earnings per share (EPS) is an important financial measure, which indicates the
profitability of a company. It is calculated by dividing the company's net income with its total
number of outstanding shares. It is a tool that market participants use frequently to gauge the
profitability of a company before buying its shares.
The earnings per share increased a bit from Year 2013 to Year 2014. The growth
shows a good omen that the organization is capable of generating more dividends for its
investors. However,the earnings per share started to drop from Year 2014 to Year 2016. This
declining trend can signal that this company is in trouble, which can lead to a decline in the
stock price. To improve EPS,Mah Sing Group may choose to buy back their own shares in
the open market.
0.214
0.233
0.164
0.15
0
0.1
0.2
0.3
0.4
0.5
2013 2014 2015 2016
RM
Earnings Per Share
Earnings Per Share

34
8.5 Market Performance
Ratio 2013 2014 2015 2016
Price-to-Earning (RM) 0.0674 0.0678 0.0852 0.102
Price-to-Book (Times) 1.569 3.117 4.438 2.740
Table 8.5: Market Ratio Analysis for the Last 4 Financial Years

35
8.5.1 Price-to-Earnings Ratio (P/E)
Figure 8.16: Price-to-Earnings Ratio (P/E) for the Last 4 Financial Years
Price-to-Earnings ratio is the ratio of a company's stock price to the
company's earnings per share. The ratio is used in valuing companies.
Along the 4 years,price-to-earnings ratio appreciates gradually. In Year 2013 and
Year 2014 price-to-earnings ratio has not shown much increase but on the later years in Year
2015 and Year 2016 it appreciates gradually. Investors often use price-to-earnings ratio to
evaluate a stock’s fair market value should be by predicting future earnings per share. Based
on Year 2016, P/E ratio is highest among the 4 years and this indicated positive future
performance and investors are willing to pay more for the company’s shares. Additionally, for
Year 2013 and Year 2014, the company has a lower ratio, this indicates poor investment may
be occurring at that period.
0.0674 0.0678
0.0852
0.102
0.01
0.03
0.05
0.07
0.09
0.11
0.13
0.15
2013 2014 2015 2016
RM
Year
Price-to-Earning
Price to Earning

36
8.5.2 Price-to-Book Ratio (P/B)
Figure 8.17: Price-to-Book Ratio (P/B) for the Last 4 Financial Years
Price-to-Book Ratio is a ratio used to compare a stock's market value to
its book value. It is calculated by dividing the current closing price of the stock by the latest
quarter's book value per share.
Along the 4 years,price-to-book ratio all are not under 1.0, because if ratio is lower
than 1.0 the company will generally have a poor return on equity and poor return on assets.
Based on the graph above, price-to-book ratio shoots up furiously from Year 2013 until Year
2015 and continue with a sudden drop in Year 2016. This explains that in Year 2016 the
company’s stock is undervalued, it could also mean that something is fundamentally wrong
with the company, this may lead to poor future opportunity.
1.569
3.117
4.438
2.74
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
2013 2014 2015 2016
Times
Year
Price-to-Book Ratio
Fixed Payment Coverage Ratio

37
9.0 Company’s Free Cash Flow
Year
2013 2014 2015 2016 TOTAL
RM’000
Net cash generated from
operating activities
177,827 316,113 (198,304) 453,363 965,238
LESS
Net cash used in investing
activities
(559,638) (775,918) (100,574) (154,279) (1,733,846)
Total Free Cash Flow (381,811) (459,805) (298,878) 299,084 (768,608)
Table 9.1: Free Cash Flow for the Last 5 Financial Years.
Free Cash Flow (FCF) is the cash available to their investors after Mah Sing Group
Berhad has met all operating needs and paid for expenses,interest, taxes and long-term
investments. It measure the firm’s financial performance,calculated as their operating cash
flow minus capital expenditures. FCF can be used to pay dividends, buy back stock, or
participate in mergers and acquisition.
The positive FCF indicates Mah Sing Group Berhad is generating more cash than it
needs to run the business and can invest in growth opportunities in FY2012 and FY2016. The
negative total FCF does not mean they are no performing well, it could be a sign that Mah
Sing Group Berhad is making large investment in its net fixed assets and net current assets.

38
10.0 Evaluation of Changes in Company’s Cash Flow
In FY2016, the overall cash and cash equivalents for Mah Sing Group Berhad was
decreasing by a significant amount of RM399,254 from RM1,280,020 at 1st
January 2016 to
RM880,766 at 31st
December 2016, had resulted that the company may bear a higher risk due
to the shortage of sufficient cash flow.
Figure 10.1: Cash Flows Activities for the Last 5 Financial Years
The net cash generated from operating activities experienced a decline from FY2013
to FY2015 and increment from FY2015 to FY2016. The net cash outflow has increased
RM651,667 from a negative RM198,304 in FY 2015 to a positive RM453,363 in FY2016,
whereby it may imply that the cash generated is more than its spending on its day-to-day
operation.
(1,000,000.00)
(800,000.00)
(600,000.00)
(400,000.00)
(200,000.00)
-
200,000.00
400,000.00
600,000.00
800,000.00
1,000,000.00
1,200,000.00
2013 2014 2015 2016
Cash Flows Activites
Operating Activities Investing Activities Financing Activities

39
10.0 Evaluation of Changes in Company’s Cash Flow(cont’d)
The net cash generated from investing activities dropped from FY2013 to FY2014
and increase gradually after FY2014. It has slightly decreased with RM53,705 from negative
of RM100,574 in FY2015 to a negative of RM154,279 in FY2016 due to heavily purchases.
The net cash generated from financing activities had fluctuated drastically from
FY2013 to FY2016. A sharp drop of RM1,663,312 from RM964,928 in FY2015 to negative
RM698,384 shown that Mah Sing Group Berhad had borrowed a large amount of cash flow
from the bank for funding the firm’s cash flow and pay off the term loans.
To conclude, Mah Sing Group Berhad’s major cash flows in FY2016 is investing
activities which had the highest cash flow among the three activities.

40
11.0 Conclusion and Recommendation
The core business of Mah Sing Group Berhad is properties segment which earned the
most revenue from major customers. Mah Sing Group Berhad has invested on their fixed
assets and current assets which had resulted in negative free cash flow since FY2013. It is
recommended that they could lease their assets to generate revenues in order to cover
expenses and increase the free cash flow.
Mah Sing Group Berhad with an acid-test ratio of less than 1 should be treated with
caution due to it may not have the liquid assets to pay their current liabilities. The acid-test
ratio is much lower than the current ratio also means that their current assets are highly
dependent on their inventories.
The poor cash flow problem of Mah Sing Group Berhad may lead to bankruptcy of
the firm. Since 46 projects are currently being carried out, this problem may be temporary.
They also have relatively lower inventory turnover over which is a sign of bad sales and
surplus inventory, therefore,Mah Sing Group Berhad should purchase inventory when needed
instead of early purchase and store it. Mah Sing Group can also reduce the operating expenses
to produce more net income and stimulate the Earning Per Share.
According to its strengths, weaknesses and financial ratio, we encourage investor to
invest in Mah Sing Group Berhad.

REFERENCE
Mack, M. (2016, May). The Power of Free Cash Flow Yield. Retrieved December 3,2017
from http://www.paceretfs.com/library/pacer-perspective/the-power-of-free-cash-flow-yield/
The Star Online. (2017, Jul 26). Construction Sector Urged to Adobt IBS. Retrieved
December 1, 2017 from https://www.thestar.com.my/business/business-
news/2017/07/26/construction-sector-urged-to-adopt-ibs/
BorneoPost Online. (2016, May 20). CITP to Boost Growth of Malaysia Construction
Industry. Retrieved December 1, 2017 from http://www.theborneopost.com/2016/05/20/citp-
to-boost-growth-of-malaysia-construction-industry/
Hoh, K. S. (2017 , Oct 30). Construction Industry Still Short of Labour Needs:MBAM.
Retrieved December 1, 2017 from http://www.thesundaily.my/news/2017/10/30/construction-
industry-still-short-labour-needs-mbam
Mah Sing Group Bhd. (2017). The Leaders. Retrieved November 20, 2017 from
http://www.mahsing.com.my/TheLeaders
Mah Sing Annual Report. (2016). Retrieved November 20, 2017 from
http://www.mahsing.com.my/Files/FinanceReport/20170503191643_Mah%20Sing%20Annu
al%20Report%202016.pdf
4-Traders. (2017). Mah Sing Group Bhd (MAHS). Retrieved November 20, 2017 from
http://www.4-traders.com/MAH-SING-GROUP-BERHAD-6492426/company/
The Wall Street Journal. (2017). Mah Sing Group Bhd. Retrieved November 20, 2017f rom
http://quotes.wsj.com/MY/MAHSING/company-people

Appendix AA
APPENDICES
Appendix A: Financial Data
Statement of Profit or Loss
For the Financial Year Ended 31 December 2013

Appendix AA

Appendix AB
Statement of Profit or Loss and Other Comprehensive Income

Appendix AB

Appendix AC
Statement of Financial Position

Appendix AC

Appendix AC
Consolidated Statement of Financial Position

Appendix AC
Company Statement of Financial Position

Appendix AC

Appendix AC
For the Financial Year Ended 31 December 2016 (Cont’d)

Appendix AD
Statement of Cash Flows

Appendix AD

Appendix B
Appendix B: Ratio’s Formula and Calculation

Appendix B
Appendix B: Ratio’s Formula and Calculation (cont’d)

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