Table of Contents

Chapter 1 ......................................................................................................................................... 1
1.0 Introduction....................................................................................................................... 1
1.1 Profitability ....................................................................................................................... 4
1.2 Net Profit Margin .............................................................................................................. 5
1.3 Gross Profit Margin .......................................................................................................... 7
1.4 Return on Capital Employed ............................................................................................ 8
Chapter 2 ....................................................................................................................................... 10
2.0 Liquidity (Short-Term Stability) ..................................................................................... 10
2.1 Current Ratio .................................................................................................................. 11
2.2 Quick Ratio (Acid Test) ..................................................................................................... 13
2.3 Gearing Ratio (Long-Term Stability) ................................................................................. 14
Chapter 3 ....................................................................................................................................... 16
3.0 Efficiency ........................................................................................................................ 16
3.1 Account Receivable Turnover ....................................................................................... 18
3.2 Account Receivables Average Collection Period ........................................................... 20
3.3 Inventory Turnover ......................................................................................................... 22
3.4 Number of Days in Inventory ......................................................................................... 24
3.5 Fixed Assets Turnover .................................................................................................... 25
Chapter 4 ....................................................................................................................................... 27
4.0 Leverage Ratio ................................................................................................................ 27
4.1 Debt to equity Ratio ........................................................................................................ 28
4.2 Time Interest Earned ....................................................................................................... 29
Chapter 5 ....................................................................................................................................... 30
5.0 Cash Flow Ratios ............................................................................................................ 30
5.2 Cash Flow Adequacy ...................................................................................................... 32
Chapter 6 ....................................................................................................................................... 33
6.0 Conclusion ...................................................................................................................... 33
Appendix ........................................................................................................................................ 34

1


Chapter 1

1.0 Introduction

The companies that were chosen by the team to study are Ibraco Group of
Companies, Mudajaya Group Berhad as well as Hock Seng Lee Berhad. All 3 companies
are property development companies that have aced the development of Kuching City.
Furthermore, all 3 companies were listed in Bursa Malaysia, which means these
companies financial statements and information were all available for public view,
hence greatly aided the team in the execution of the assignment.
IbracoBerhad (Ibraco) was first established on 30 August 1971 as a private
limited company under the name of Ibraco Realty Development Sdn Bhd. The company
converted into a public limited company in preparation for its listing on the Main Board
of Bursa Malaysia Securities Berhad (Bursa Securities). On 28 July 2003 it was
converted into a public limited company in order to get listed on the Main Board of Bursa
Malaysia Securities Berhad, hence changing its name to Ibraco Berhad.
Ibraco Group has been involved in real estate and property development
comprising mainly residential, commercial and industrial properties since 1974. With its
distinguished track record of over 38 years of experiences in the property development
industry, Ibraco has established itself as the premier property developer in Sarawak.
Being the pioneer property developer in Kuching, with over 30 years of experiences, it
had set itself as the Premiere property developer in Sarawak. Tabuan Jaya, a renowned
and established township which is situated 7 kilometers south of Kuching City, is one of
the best examples of Ibraco Groups success as they were responsible for the really
successful growth of that township. Besides property development, Ibraco is also
involved in landscape as well as construction projects. Ibraco Construction Sdn Bhd and
Ibraco Spectrum Sdn Bhd (landscape) are both wholly owned by Ibraco Berhad. Some of
their current projects are Tabuan Tranquility and Stutong Apartments, and as fortheir
latest projects, these include The Park Residence as well as the Town Square of Bintulu.
2

On the other hand, another company that had created its own fame in the Sarawak
developers network is Hock Seng Lee Berhad (HSL). Hock Seng Lee Berhad is a
subsidiary of Hock Seng Lee Construction Sendirian Berhad (HSL Construction). HSL
commenced business in property development in the year 2000, having acquired a
strategic land bank in a successful corporate exercise in June 2000. Besides property
development, HSL is also involved in other different kinds of field, such as building
construction, marine engineering, civil engineering and etc.
HSL has launched several very successful residential and commercial projects all
around Kuching. In recent years, it has taken on construction contracts ranging from
residential housings to hospitals, educational institutions and some other commercial and
public administrative buildings. In addition, HSL had always been quite reputable for
being innovative in their designs and value-for-money products.
Initially, property development was not HSLs main focus and forte. However,
the company saw an opportunity in it, hence expanding into this field. HSL moving into
property development is seen as synergistic in its construction and engineering business
and has enlarged their operations and earnings base ever since.
Besides, with HSL's strong financial standings, it has enabled the company to
offer flexible payment terms to clients or even negotiate contracts on cash-kind
combination terms. By accepting payments in the form of land, HSL is continuing to
boost its land bank which in turn will generate more new projects for property
development. Subsequently, property development is expected to be a
substantialenduring contributor to the companys bottom line going forward with many
innovative and exciting projects in the pipeline.
In addition, another property development company that had also made a mark in
Kuching is Mudajaya Group Berhad via its subsidiaries Mudajaya Land Sdn Bhd
(formerly known as Angsana Fajar Sdn Bhd or MLand). MJC was established in
Malaysia under the name of Chye Hin Construction Company Limited on 9 December
1965 as a private limited company, but changed its name to Chye Hin Construction
Company Sdn Bhd on 15 April 1966. On 19 August 1972, its name was further changed
to Mudajaya Construction Sdn Bhd and subsequently to Mudajaya Corporation Sdn Bhd
(MJC) on 19 May 1997. On 10 June 1997, it was converted into a public limited
3

company with the same name. Some of the other business activities they are involved in
were construction, manufacturing, trading as well as power sector. Similar to the previous
two companies mentioned, MJC is also involved in other business activities, such as
construction, manufacturing, trading as well as power sector.
The company first ventured into property development with its maiden project,
the Villa Angsana Condominium in Kuala Lumpur whereby their project comprises of
756 units of apartments which were successfully launched in 1996 in four phases and
were all sold out. Subsequently in the year 1997, the company via its subsidiary MJC
City Development Sdn Bhd (MCity), embarked on the Batu Kawah New Township
project in Kuching. The Batu Kawah New Township is situated 7 KM from Kuching City
Centre. The project consists of a new satellite township to be built on 265 acres of land.
The completion of the project is estimated to be around the year 2020 and is expected to
generate a total Gross Development Value of more than RM1.3 billion.


















4

1.1 Profitability

Profitability represents a class of financial metrics that are used to assess a
business's ability to generate earnings as compared to its expenses and other relevant
costs incurred during a specific period of time. Table 1 below shows the comparison
between Ibraco Berhad, Hock Seng Lee Berhad (HSL) and Mudajaya Berhad over a five
years term. A breakdown comparison will be discussed in detail at next section. For
calculation, please refer to Appendix Table A-1.

Profitability ratio: 2012 (%) 2011 (%) 2010 (%) 2009 (%) 2008 (%)
Net Profit Margin
Ibraco Berhad
HSL
Mudajaya Berhad

11.53
15.03
19.1

11.07
15.00
13.55

27.44
15.04
27.23

14.16
15.02
16.52

4.10
13.53
21.82
Gross Profit Margin
Ibraco Berhad
HSL
Mudajaya Berhad

23.41
21.51
18.31

21.30
21.69
24.90

47.63
22.29
32.96

59.93
23.32
24.92

15.01
21.96
19.82
Return On Capital
Employed (ROCE)
Ibraco Berhad
HSL
Mudajaya Berhad


7.46
23.71
25.7


6.64
26.42
29.15


5.43
26.36
36.6


(2.44)
24.15
39.67


(1.78)
22.08
21.48

Table 1: Profitability Ratio Comparison






5

0
5
10
15
20
25
30
2008 2009 2010 2011 2012
N
e
t

P
r
o
f
i
t

M
a
r
g
i
n

Years
Net Profit Margin
Ibraco Berhad
Hock Seng Lee Berhad
Mudajaya Berhad
1.2 Net Profit Margin

The net profit margin ratio can be defined as a companys total amount of revenue
which keeps as company net income and conveysit in a percentage form. In simple words,
net profit margin shows the amount of sales which were left over after deducting all the
expenses and indicating how effective a company is in cost control. Besides, net profit
margin is very useful in comparing the profitability of different companies in the same
industries. Other than that, higher net profit margin shows the company efficiency in
converting the sales to actual profit. However, lower net profit margin indicates a low
margin of safety whereby the risk of sales decline may affect the profit or resulting in a
negative margin. Thus, the company would have to increase the operation expenses
which in return may decrease the net profit margin.

Figure 1.1: Net Profit Margin
6

Based on the table, Mudajaya Berhad reveals the highest net profit margin in the
year 2012, 19.1%, being the highest amongst the competitors. The second highest was
Hock Seng Lee Berhadwith a net profit margin of 15.03% and the one achieving the
lowest net profit margin was IBRACO Berhad. The acceptable ratio is varied from
industry to industry. However, the appropriate or recommended ratio for net profit
margin is 5 percent or greater. Thus, from the figure shown above, all three companies
are in the acceptance level and are growing in a stable condition. However, there are a
few indicators thatthese companies should be aware ofwhich are the possible influences
on the net profit margin which areprice, inventory, variable business costs and business
fixed costs.




















7

0
10
20
30
40
50
60
70
2008 2009 2010 2011 2012
G
r
o
s
s

P
r
o
f
i
t

M
a
r
g
i
n

Years
Gross Profit Margin
Ibraco Berhad
Hock Seng Lee Berhad
Mudajaya Berhad
1.3 Gross Profit Margin

The gross profit margin ratio can be defined as the amount of money a company
earns from the production process. It also acts as an indicator for the company to evaluate
the profitability for the most fundamental level.

Figure 1.2: Gross Profit Margin
Figure 1.2 illustrates the gross profit margin of Ibraco Berhad, Hock Seng Lee
Berhad and Mudajaya Berhad. From the figure above, it is obvious that Ibraco has a
higher gross profit margin compared to the other two companies in the year 2012,
achieving 23.41%. However, it can also be seen that Hock Seng Lee Berhad has the
highest gross profit margin in the year 2009, achieving 23.32%, but the achievement was
short lived as the gross profit margin began to slop in the following years, reaching 21.51%
in the year 2012. The main reason for that was due to the inadequate supply in resources,
labor and materials. As for Mudajaya Berhad, its gross profit marginhas not been stable
for these 5 years and had only achieved 18.31% in the gross profit margin, losing out to
the two competitors.

8

0
5
10
15
20
25
30
35
40
45
2008 2009 2010 2011 2012
R
e
t
u
r
n

o
n

C
a
p
i
t
a
l

E
m
p
l
o
y
m
e
n
t

Years
Return On Capital Employment
Ibraco Berhad
Hock Seng Lee Berhad
Mudajaya Berhad
1.4 Return on Capital Employed

Return on capital employed (ROCE) is the financial ratio that measures the
companys efficiency as well as the profitability in capital investment. Besides, ROCE
can also be defined as the long term funds used by the company. The higher the capital
employed, the higher the efficiencyin which the company usesits capital. Other than that,
ROCE should also be higher than the capital cost employed or else it would show the
companys ineffectiveness in the capital usage, hence not generating any shareholder
value. The ROCE is usually expressed in percentageterms.

Figure 1.3: Return on Capital Employed (ROCE)



9

Based on the Figure 1.3, it can be seen that Ibraco was facing loss in the earnings
before interest and tax in the year 2008 and year 2009, hence losing much of the capital
invested. This has lead to a negative ROCE which is 1.78% in the year 2008 and 2.44%
year 2009. AlthoughIbracos ROCE has gradually increased to 7.46% in year 2012, but
its still lowwhen compared to the other two companies.
As for Hock Seng Lee Berhad, it can be seen the companys performance was
quite stable for the five consequent years when compared to the two competitors. In the
figure above, Hock Seng Lee Berhad had shown an average ROCE of 24.54% for the five
years preiod, and a particularly high ROSE in the year 2011 which is 26.42%. The results
have concluded that the management of Hock Seng Lee Berhad had efficiently managed
the capital wisely, hence the positive growth.
As we can conclude from the Figure 1.3, Mudajaya Berhad has demonstrated the
highest ROCE compared with the other two competitors. Assumptions can be made that
the company has managed the capital efficiently mainly for investment purposed.
Mudajaya breed has figured out the highest ROCE on the year 2009 which is 39.67%.
However, by the year 2012, the ROCE has dropped to 25.7%, though is still the highest
in terms of ROCE when compared to Ibraco Berhad and Hock Seng Lee Berhad.













10

Chapter 2

2.0 Liquidity (Short-Term Stability)

A liquidity ratio is defined as a company's ability to pay short-term obligations.
The ratio is mainly used to give an idea of the company's ability to pay back its short-
term liabilities (debt and payables) with its short-term assets (cash, inventory,
receivables). Table 2 below represent the comparison between Ibraco Bhd, Hock Seng
Lee Bhd (HSL) and Mudajaya Berhad for five years. A breakdown comparison will be
discussed in detail at next section. For calculation, please refer to Appendix Table A-2.

Liquidity Ratio: 2012 2011 2010 2009 2008
Current Ratio
Ibraco Berhad
HSL
Mudajaya Berhad

3.02
1.85
1.71

2.33
1.85
2.17

3.32
1.79
1.99

4.44
1.94
1.51

5.58
1.84
2.94
Quick Ratio
Ibraco Berhad
HSL
Mudajaya Berhad

3.01
1.68
1.69

2.32
1.66
2.14

3.32
1.73
1.95

4.43
1.88
0.46

5.46
1.72
2.80
Gearing Ratio (%)
Ibraco Berhad
HSL
Mudajaya Berhad

41.2
36.6
32.9

35.9
40.1
29.9

23.6
40.1
32.0

10.6
38.8
40.5

28.0
39.5
25.5

Table 2: Liquidity Table Comparison




11

2.1 Current Ratio

The current ratio measures the efficiency of a company in paying obligations or in
other words, the ratio is an indication of a firm's market liquidity and ability to meet
creditor's demands. When the current ratio of a company is less than one, it represent that
the company would not be able to pay off its obligation if they came to that point. It also
shows that the company is not in good financial health, however it does not necessarily
mean that it will go bankrupt. The current ratio can give a sense of efficiency of a
company's operating cycle or its ability to turn its product into cash. Companies that have
trouble getting paid on their receivables or have a long inventory turnover can run into
liquidity problems because they are unable to alleviate their obligations. Because
business operations differ in each industry, it is always more useful to compare
companies within the same industry.

This ratio is similar to the acid-test ratio except that the acid-test ratio does not
include inventory and prepaid as assets that can be liquidated. The components of current
ratio (current assets and current liabilities) can be used to derive working capital (the
difference between current assets and current liabilities). Working capital is frequently
used to derive the working capital ratio, which is working capital as a ratio of sales.








12



Figure 2.1: Current Ratio

Graph 2.1 illustrates the current ratio for Mudajaya Berhad, Ibraco Berhad and
Hock Seng Lee Berhad from the year 2008 to 2012. Ibraco Berhad holds the highest
liquidity ratio from year 2008 to 2012 compared to Mudajaya Berhad and Hock Seng Lee
Berhad. The ratio revealed that in year 2012 Ibraco Berhads current assets cover the
current liabilities by 3.02 times. Acceptable current ratios vary from industry to industry
and are generally between 1.5% and 3% for healthy businesses. Ibraco Berhad had the
highest current ratio of 5.58 in the year 2008. The company had improved in utilizing and
their liquid assets productively in the recent years. While Mudajaya Berhad and Hock
Seng Lee Berhad are in good health for business as the ratios are between around 2:1
ratio.





0
1
2
3
4
5
6
2008 2009 2010 2011 2012
C
u
r
r
e
n
t

R
a
t
i
o

Years
Current Ratio
Mudajaya Berhad
Ibraco Berhad
Hock Seng Lee
Berhad
13

2.2 Quick Ratio (Acid Test)

The term Acid Test ratio is also known as quick ratio. The most basic definition
of acid-test ratio is used to measures current (short term) liquidity and position of the
company. To do the analysis, accountants weigh current assets of the company against
the current liabilities which result in the ratio that highlights the liquidity of the company.








Figure 2.2: Quick Ratio

The acid test ratios for 2011 MudajayaBerhad, IbracoBerhad and Hock Seng Lee
Berhad and can be expressed as 2.14:1, 2.32:1 and 1.66:1 respectively. The ratio indicates
us that the liquid current assets are able to cover liabilities, hence reflecting that the
three companies here are having a strong base of cash flows as all the ratios are more
than 1.0.

0
1
2
3
4
5
6
2008 2009 2010 2011 2012
Q
u
i
c
k

R
a
t
i
o

Years
Quick Ratio
Mudajaya Bhd
Ibraco Bhd
Hock Seng Lee
14

2.3 Gearing Ratio (Long-Term Stability)

The gearing ratio is the proportion of a company's debt to its equity, where a high
gearing ratio represents a high proportion of debt to equity, and a low gearing ratio
represents a low proportion of debt to equity. The gearing ratio is similar to the debt to
equity ratio, except that there are a number of variations on the gearing ratio formula that
can yield slightly different results.
Generally, companies with higher leverage as determined by a leverage ratio are
thought to be more risky because they have more liabilities and less equity. A leverage
ratio is also called a gearing ratio or an equity multiplier.








Figure 2.3 Gearing Ratio


0
5
10
15
20
25
30
35
40
45
2008 2009 2010 2011 2012
G
e
a
r
i
n
g

R
a
t
i
o

Years
Gearing Ratio
Mudajaya Bhd
Ibraco Bhd
Hock Seng Lee
15

Mudajaya Group Berhad reveals a substantial increase in the level of gearing ratio
from 29.9% to 32.9% compared with the year 2011 and 2012, which only shows the
difference 3%. However, Hock Seng Lee Berhad has the same ratio of gearing for the
years 2010 and 2011 which figured 40.1%. In the year 2009, Mudajaya Group Brehad
shown the highest gearing ratio followed by Hock Seng Lee Berhad which figured 38.8%
and the least gearing ratio falls to Ibraco Berhad. There are a number of methods for
reducing a company's gearing ratio, including sell shares where the board of directors
could authorize the sale of shares in the company, which could be used to pay down debt.
Converting loans and negotiating with lenders to swap existing debt for shares in the
company. Reduce working capital. Increase the speed of accounts receivable collections,
reduce inventory levels, and/or lengthen the days required to pay accounts payable, any
of which produces cash that can be used to pay down debt. The company has to use any
methods available to increase profits, which should generate more cash with which to pay
down debt.



16

Chapter 3

3.0 Efficiency

Efficiency ratio is used to analyze how well a company uses its assets and
liabilities internally. Table 3 below represents the comparison between Ibraco Bhd, Hock
Seng Lee Bhd (HSL) and Mudajaya Berhad for five years. A detailed breakdown
comparison will be discussed in the next section. For calculations, please refer to
Appendix Table A-3.
Efficiency ratio: 2012 2011 2010 2009 2008
Receivables
Accounts Receivable Turnover (Time)
Ibraco Berhad
HSL
Mudajaya Berhad

Average Collection Period (Days)
Ibraco Berhad
HSL
MudajayaBerhad


6.37
2.72
3.98


57
134
92


1.65
2.50
2.80


221
146
130


2.56
1.77
2.87


143
176
127


0.64
2.07
3.81


570
206
96


4.16
1.84
2.96


88
198
123
17



Table 3: Efficiency Ratio













Inventory
I nventory Turnover (Times)
Ibraco Berhad
HSL
MudajayaBerhad

Number of Days in I nventory (Days)
Ibraco Berhad
HSL
MudajayaBerhad


87.51
22.51
4.52


4
16
81


144.57
25.07
3.35


3
15
109


48.48
31.54
43.28


8
12
8


9.12
33.80
36.23


40
11
10


8.36
68.53
21.42


44
5
17
Fixed assets
Fixed Asset Turnover (Times)
Ibraco Berhad
HSL
MudajayaBerhad


43.30
9.53
12.25


10.12
5.57
22.74


1.70
5.87
21.82


15.76
6.34
29.82


25.7
7.43
34.52
18

0
1
2
3
4
5
6
7
2008 2009 2010 2011 2012
A
c
c
o
u
n
t
s

R
e
c
e
i
v
a
b
l
e

T
u
r
n
o
v
e
r

Years
Accounts Receivable Turnover
Ibraco Berhad
Hock Seng Lee Berhad
Mudajaya Berhad
3.1 Account Receivable Turnover

Accounts receivable turnover is defined as the effectiveness of company in
extending the credit as well as collecting the debts from the creditor and customers. At
the same time, accounts receivable turnover also measures the efficiency of a companys
asset usage. Beside, accounts receivable turnover has indirectly given the companys
customers and clients interest free loans. A high ratio of accounts receivables means that
a company is operating on a cash basis or the time to collect back the collection is
efficient. However, the low ratio of account receivable turnover means that the company
should reconsider its credit policies and ensure that any collection is paid back on time.








Figure 3.1: Accounts Receivable Turnover

19

Based on Figure 3.1, it can be seen that Ibraco Berhad has the highest accounts
receivable turnover in the year 2012 which is 6.37 times. The number of times increased
along the years from the year 2009, 0.64 times. Ibraco Berhad had shown quite a positive
growth in this field and has enabled the company to have sufficient cash flow from time
to time as well as operate on a cash basis.
As for Hock Seng Lee Berhad, the accounts receivable turnover in the year 2008
was 1.84 times and the numbers has increased to 2.72 times in the year 2012. However it
is still the lowest compared to other competitors which means that the company took
more days than its competitors in collecting the cash back. Hock Seng Lee Berhad had
remained almost the same figure along the years. As for Mudajaya Berhad, the account
receivable turnover was 2.96 times in the year 2008 and had increased to 3.98 times in
the year 2012. Although Mudajaya Berhad is not in the last place amongst the three
companies, it does not indicate that the company is performing well as it took around 92
days on average to collect the debts. Both HSL and Mudajaya Berhad should reconsider
their policies in order to ensure efficient cash flow in the companys operation.















20

0
100
200
300
400
500
600
2008 2009 2010 2011 2012
A
c
c
o
u
n
t

R
e
c
e
i
v
a
b
l
e

A
v
e
r
a
g
e

Years
Account Receivables Average VS Times
Ibraco Berhad
Hock Seng Lee Berhad
Mudajaya Berhad
3.2 Account Receivables Average Collection Period

Account receivables average collection period can be defined as the amount of
time a business gets back or receive the payment owed by their creditors, customers and
clients. Lower average collection period tends to be of all businesses choice as they need
these cash to cover the administration and operation expenses. Nowadays, most
businesses or companies are letting their clients to pay via credit, though it can be quite
hard to predict the actual time these clients will pay. Hence, a low payback period is
crucial to a business or company.

Figure 3.2: Graph plotting Account Receivables Average Collection Period against the
times


21

Based on Figure 3.2, it is revealed that Ibraco has the lowest collection periods as
compared to other two competitors, being 57 days only in the year 2012. Compared to the
past (2009), Ibraco needed approximately 570 days to get back payments. Hence,
Ibracos business performance has shown vast improvement along the year with the
significant decrease in the collection period. Well, this is a positive sign for Ibraco
Berhad as the creditors and customers payback were all within a short period, thus
allowing the company to have sufficient cash to operate their business.
However, Hock Seng Lee Berhad has the highest account receivables in terms of
the average collection period as compared to the other two competitors whereas in the
year 2012, the companys payment payback period was 134 days. Even though the
number has started to show a sign of decrease as compared to the year 2011 but it is still
high compared to the other two competitors. In comparison with Ibraco Berhad, Hock
Seng Lee Berhad takes 77 days more than Ibraco Berhad in the collection of payment
from the creditor and customers. This clearly illustrates the HSLs poor management.
As for Mudajaya Berhad, the average number of days taken to collect payment for
the year 2012 was 92 days. Based on the Figure 3.2, there was a sign of decrease when
compared with the previous years, which took 130 days. The average collection period
varies from industry to industry and the acceptable range for an account receivables
collection period is approximately 40 days or less. Based on what was seen in Figure 3.2,
all three companies have exceeded the standardized period, though IbracoBerhaddid
come close to that mentioned period as compared to the HSL Berhad and Mudajaya
Berhad.








22

0
20
40
60
80
100
120
140
160
2008 2009 2010 2011 2012
I
n
v
e
n
t
o
r
y

T
u
r
n
o
v
e
r

Years
Inventory Turnover
Ibraco Berhad
Hock Seng Lee Berhad
Mudajaya Berhad
3.3 Inventory Turnover

Inventory turnover can be defined as the frequency of the company inventory sold
and replaced within a point in time. The lower inventory turnover ratio shows that the
company is dealing with poor sales hence facing an excess in inventory. However, higher
inventory turnover ratio sometimes may not necessarily mean that the company is having
a good growth as a high inventory turnover ratio can either be that the company is strong
in sales or is ineffective in buying. Other than that, the high inventory level also
represents the investment in a zero rate of return because once the price fall, the company
would be in trouble. Hence, high inventory levels may not necessary be healthy for a
company.








Figure 3.3 Inventory Turnover

23

Based on the Figure 3.3, Ibraco Berhad has shown the highest inventory turnover
as compared to the other two competitors competitors. Although the number of times has
declined from 144.57 times in the year 2011 to 87.51 times in the year 2012, but Ibraco
Berhad is still able to attain the top position amongst the three companies being the
company with the highest inventory turnover. As for Mudajaya Berhad, it achieved the
lowest inventory turnover in the year 2012 which figured at 4.52 times. This is due to the
ineffectiveness of the company in purchasing assets, hence causing their inventory
turnover ratio to drop immensely as well as reflecting the companys poor growth as well
as their weakness in managing their inventories. The average and acceptance ratio for
inventory turnover is in the range 5 to 7. Thus, from this we can assume that Mudajaya
Berhads inventory turnover did not reach the acceptable range, showing a lack of
demand from customers.


















24

0
20
40
60
80
100
120
2008 2009 2010 2011 2012
N
u
m
b
e
r

o
f

D
a
y
s

S
a
l
e
s

I
n

I
n
v
e
n
t
o
r
y

Years
Number of Days Sales in Inventory
Ibraco Berhad
Hock Seng Lee Berhad
Mudajaya Berhad
3.4 Number of Days in Inventory

Number of days in inventory measures the average numbers of days a company
holds its inventory before selling it to the markets or in other words, it explains on how
long it takes for a company to turn its inventory into sales. Lower or shorter number of
days in inventory are certainly better, besides the average numbers of days in inventory
varies from industry to industry.

Figure 3.4: Numbers of Days in Inventory

Ibraco Berhad has revealed to have the shortest number of days to turn its
inventory to sales. Based on the figure above, it shows that Ibraco Berhad only took 4
days to turn their inventory into sales, whereas for Mudajaya Berhad, it took about 81
days, which is apparently a very long period of time as compared to the former. Based on
the Figure 3.4, the reason behind Mudajaya Berhads letdown was in a way related to
their poor inventory turnover ratios, hence affecting the overall sales period.
25

0
5
10
15
20
25
30
35
40
45
50
2008 2009 2010 2011 2012
F
i
x
e
d

A
s
s
e
t
s

T
u
r
n
o
v
e
r

Years
Fixed Assets Turnover
Ibraco Berhad
Hock Seng Lee Berhad
Mudajaya Berhad
3.5 Fixed Assets Turnover

Fixed asset turnover is to distinguish the companys ability in creating their net
sales from the fixes asset investment. Higher the fixed assets turnover ratio is better in
the sense that it determines whether the company is efficient in managing their
investment in fixed assets in order to create revenue. However, lower fixed asset turnover
indicates that a company has over-invested in the fixed assets such as equipment, plants
or others, hence not making much profit.

Figure 3.5: Fixed Assets Turnover




26

Based on the Figure 3.5 , it is revealed that Ibraco Berhad has the highest fixed
asset turnover as compared with the other two competitors in the year 2012, figuring 4.30
times. This was a good indication because the higher the fixed asset turnover for a
company, the more efficient the company is in managing their investment in fixed assets
to create revenue.
As for Hock Seng Lee Berhad, the figure above has indicated that the company
has the least fixed asset turnover in the year 2012 which is 9.53 times, which are mainly
due to the ineffectiveness or inefficiency in managing the investment in fixed assets.
Based on the figure above, it is clearly seen that Mudajaya Berhad has generated
12.25 times in the companys fixed asset turnover in the year 2012, though had decreased
10.49 times as compared to the year 2011. The sloping of the Mudajaya Berhard fixed
assets turnover ratio was mainly due to the escalating number of days in their inventory.
In conclusion, looking at the three companies, Ibraco Berhad is ahead of the other two
competitors and has generated a total revenue RM122,339,695 in the year 2012, a
significant increase of RM8,751,902 as compared to the previous year.
















27

Chapter 4

4.0 Leverage Ratio

Leverage Ratio to calculate the financial leverage of a company to get an idea of
the company's methods of financing or to measure its ability to meet financial obligations.
Table 4 below represent the comparison between Ibraco Bhd, Hock Seng Lee Bhd (HSL)
and Mudajaya Berhad for five years. A breakdown comparison will be discussed in detail
at next section. For calculation, please refer to Appendix Table A-4.

Leveraging Ratio: 2012 2011 2010 2009 2008
Debt to Equity
Ibraco Berhad
HSL
Mudajaya Berhad

0.70
0.58
0.49

0.60
0.67
0.43

0.31
0.69
0.47

0.12
0.64
0.69

0.17
0.66
0.34
Timed Interest Earned
Ibraco Berhad
HSL
Mudajaya Berhad

0.20
0.26
0.21

0.19
0.26
0.29

0.57
0.26
0.48

4.39
0.26
0.31

1.45
0.24
0.19

Table 4.1: Leveraging Ratio








28

0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.90
1.00
2008 2009 2010 2011 2012
D
e
b
t

T
o

E
q
u
i
t
y

Years
Debt to Equity
HSL
Mudajaya
Ibraco
4.1 Debt to equity Ratio


Figure 4.1: Debt to Equity Ratio

Debt to equity ratio is a financial tool used to measure and evaluate a companys
capital structure or stock by measuring the firms assets funded by the mixture of debt
and equity. It is also known as risk or leverage ratio which gives the financial analysts
and prospective investors in determining the financial leverage of a company is using. A
companys debt to equity ratio is recommended to be lower than two which signify that
the company fund its projects evenly with the debt and equity. A lower ratio of as low as
below 0.30 is considered good illustrating that the company has a low amount of debt
which consequently exposed to lesser risk in terms of interest rate increases or credit
rating. Looking into HSL financial performance, its debt to equity ratios are quite stable
where it ranged from 0.50 to 0.7 over the five years. Mudajayas debt to equity ratio
increased rapidly from 2008 to 2009 and remained stable after 2010 between the ratios of
0.40 to 0.50. Ibraco debt to equity ratio was increasing sharply after 2009. Though the
ratio is increasing, it is still considered acceptable because its below the ratio of 2. Thus,
the debt to equity ratio for these three companies is considered good as their ratios are
below one.
29

4.2 Time Interest Earned



Figure 4.2: Times Interest Earned

Times interest earned is a financial tool to measure how many times a company
can cover its interest charges on a pre tax basis. It is important to ensure the interests
were paid to the debtors to avoid bankruptcy of a company. In this situation, high ratio
illustrate that a company has an unpleasant lack of debt which has too much debt being
paid with the earnings that can be used for future or other projects. Both HSL and Ibraco
are performing quite well as they have a stable times interest earned ratio for the
consecutive 5 years. Ibraco has a ratio of 1.45 for 2008 and hasrapidly increased from
1.45 to 4.39 which are very hazardous as the higher the ratio for times interest earned, the
higher the possibility the company might get bankrupted. The ratio was then declined
greatly from 2009 to 2010 at the ratio of 0.57 and remained stable for the following years
which are safe from bankruptcy. Thus, a company can yield greater returns by investing
its earnings into other projects without paying all debts with its earnings to meet its debt
obligations.
0.00
0.50
1.00
1.50
2.00
2.50
3.00
3.50
4.00
4.50
5.00
2008 2009 2010 2011 2012
T
I
m
e
s

-

I
n
t
e
r
e
s
t
e
d

-

E
a
r
n
e
d

Years
Times - Interest - Earned
HSL
Mudajaya
Ibraco
30

Chapter 5

5.0 Cash Flow Ratios


Cash flow ratios is a revenue or expense stream that changes a cash account over
a given period. Table 5 below represent the comparison between Ibraco Bhd, Hock Seng
Lee Bhd (HSL) and Mudajaya Berhad for five years. A breakdown comparison will be
discussed in detail at next section. For calculation, please refer to Appendix Table A-5.

Cash Flow Ratio: 2012 2011 2010 2009 2008
Cash Flow to Net
Income
Ibraco Berhad
HSL
Mudajaya Berhad


0.13
0.90
2.07


0.75
1.56
0.39


0.26
0.74
0.90


0.42
0.93
1.65


20.9
1.19
0.30
Cash Flow Adequacy
Ibraco Berhad
HSL
Mudajaya Berhad

0.13
1.75
1.844

0.15
7.32
0.65

0.75
2.52
0.94

1.55
2.01
1.36

133.02
2.81
0.78

Table 5: Cash Flow Ratio









31

5.1 Cash Flow to Net Income



Figure 5.1: Cash Flow to Net Income

Cash flow to net income shows the maximum amount of cash generates by net
income in a business. HSL and Mudajaya have a steady ratio for the five consecutive
years. Ibraco has a very high cash flow to net income ratio in the year 2008 which means
the company generates quite a large amount of money from its net income. However, the
ratio dropped drastically from 2008 (20.92) to 2009 (0.42) and remained stable for the
following years. Hence, a decline in the cash flow to net income ratio signify a cash flow
problem occurs in a company.






0
5
10
15
20
25
2008 2009 2010 2011 2012
C
A
s
h

F
l
o
w

t
o

N
e
t

I
n
c
o
m
e

Years
Cash Flow to Net Income
HSL
Mudajaya
Ibraco
32

5.2 Cash Flow Adequacy



Figure 5.2 Cash Flow Adequacy

Cash flow adequacy measures how well the company can cover the annual
payments of all the long term annual debt with the cash flow from operating activities.
The performance ratio normally has a value of at least 1.0, which means the company is
able to cover its long term annual debt with their cash flow from operations. In Ibracos
case, it has an undesirable ratio up to 133.02 in the year of 2008. Nevertheless, the ratio
was declined back to normal from 2009 onwards and stay less that 1.0 after 2009.
Mudajaya is the overall most stable ratio ranging from 0.65 to 1.84 for the five
consecutive years. However, most of the ratios are less than 1.0 which are unsafe
because the companys operations produce insufficient cash to meet necessary business
obligations. HSL are performing well among these three companies as its cash flow
adequacy ratio is more than 1.0. Hence, it is important to identify the cash flow adequacy
ratio of a company to measure and identify the liquidity problems in order to take quick
actions towards the problems occurred.

0
20
40
60
80
100
120
140
2008 2009 2010 2011 2012
C
a
s
h

F
l
o
w

A
d
e
q
u
a
c
y

Years
Cash Flow Adequacy
Ibraco
Mudajaya
HSL
33

Chapter 6

6.0 Conclusion

Based on what we had analyzed, all three companies that were involved in
property development had performedparticularly well, though may not altogether be in
the same areas. They might have underperformed in certain areas, however on average,
their performance was quite fair and were still operating well in Kuching.
With more major industry player like COMTEC Solar, which will build one of the
largest solar manufacturing plant in Kuching, we can expect increase of property rate in
Kuching. The factory, to be built by SinoHydro and scheduled for completion by the end
of this year, will create 1,300 new jobs. More job vaciencis available which lead to higher
turnover property rate in Kuching. A mushrooming of mega malls (i.e. Summer Mall,
Viva City Megamall & City One) open up more business opportunity to attract
international & local investor to coming in to Kuching. This solely benefit to this three
developers (Ibraco, HSL & Muddajaya) as they can expect the higher sales in coming
years.
34

Appendix

Company Ratio 2008 2009 2010 2011 2012
HSL
Net Profit
Margin
(%)
(35,613,847/277,0
81,670) 100 =
12.85
(51,237,352/345,64
1,708) 100 =
14.82
(66,085,586/457,
712,884) 100 =
14.43
(80,952,950/559,
499,746) 100 =
14.47
(90,694,457/603,2
67,262) 100 =
15.03
Gross
Profit
Margin
(%)
(58,400,854/277,0
81,670) 100 =
21.07
(79,715,757/345,64
1,708) 100 =
23.06
(98,411,086/457,
712,884) 100 =
21.50
(117,375,452/55
9,499,746) 100
= 20.98
(120,672,910/576,
056,738) 100 =
20.94
Return
On
Capital
Employed
(%)
56,457,859 /
(401,608,379-
152,435,969) +
6,530,900 =
22.08
75,568,555 /
(477,755,569-
175,227,524) +
10,367,500 =
24.15
98,419,118 /
(582,020,093-
222,710,089) +
14,067,000 =
26.36
116,598,066 /
(683,141,823+25
7,755,288) +
15,930,100 =
26.42
121,149,592 /
(757,007,214-
261,561,112) +
15,516,800 =
23,71
Mudajaya
Net Profit
Margin
(%)
(57,247,000/422,3
82,000) 100 =
13.55
(137,541,000/719,9
71,000) 100 =
19.1
(236,998,000/870
,428,000) 100 =
27.23
(293,948,000/1,3
47,059,000)
100 = 21.82
(273,553,000/1,65
5,722,000) 100 =
16.52
Gross
Profit
Margin
(%)
(83,695,000/422,3
82,000) 100 =
19.82
(179,419,000/
719,971,000) 100
=
24.92
(286,896,000/870
,428,000) 100 =
32.96
(335,329,000/1,3
47,059,000)
100 =
24.90
(303,230,000/1,65
5,722,000) 100 =
18.31
Return
On
Capital
Employed
(%)
65,432,000 /
(408,125,000-
103,737,000) +
256,000 =
21.48
167,957,000 /
(677,425,000-
254,329,000) +
256,000 =
39.67
278,386,000 /
(1,119,707,000-
359,463,000) +
256,000 =
36.6
293,948,000 /
(1,436,655,000-
428,674,000) +
256,000 =
29.15
284,116,000 /
(1,644,510,000-
540,056,000) +
621,000 =
25.7
Ibraco
Net Profit
Margin
(%)

(2,923,613/1,704,43
6) 100 =
171.53
(20,054,961/30,6
08,149) 100 =
65.52
(12,059,374/109,
730,266) 100 =
10.99
(13,135,360/122,3
39,695) 100 =
10.73
Gross
Profit
Margin
(%)

(703,875/1704,436)
100 =
41.29
(13,166,764/30,6
08,149) 100 =
43.01
(21,509,370/109,
730,266) 100 =
19.60
(27,176,676/122,3
39,695) 100 =
22.21
Return
On
Capital
Employed
(%)
(2,727,753) /
(169,375,999-
25,075,452) +
9,043,807 =
(1.78) Loss
(3,348,553) /
(152,953,830-
16,161,550) +
90,511 =
(2.44) Loss
8,690,708 /
(209,466,615-
49,443,630) +
142,926 =
5.43
16,869,919 /
(324,165,311-
99,447,898) +
29,523,682 =
6.64
18,949,302 /
(324,165,311-
133,510,350) +
63,389,123 =
7.46

Table A-1: Profitablity Calculation Table

35

Company Ratio 2008 2009 2010 2011 2012
HSL
Current
Ratio
280,120,314
/
152,435,969
= 1.84
339,903,264 /
175,227,524 =
1.94
398,500,741 /
222,710,089 =
1.79
476,480,495 /
257,755,388 =
1.85
483,798,336 /
261,561,112 =
1.85
Quick
Ratio
(280,120,314
-6,035,698) /
152,435,969
= 1.72
(339,903,264-
10,981,994) /
175,227,524 =
1.88
(398,500,741-
13,076,727) /
222,710,089 =
1.73
(476,480,495-
23,245,894)
/257,755,388
= 1.66
(483,798,336-
17,033,549) /
261,561,112 =
1.68
Gearing
Ratio
158435969 /
401608379
100 =
39.5
185595024 /
477755569
100 =
38.8
236777089 /
582020093
100 =
40.1
273685488 /
683141823
100 =
40.1
277077912 /
757007214
100 =
36.6
Mudajaya
Current
Ratio
305,271 /
103,737 =
2.94
434,056 /
287,866 =
1.51
713,560 /
359,463 =
1.99
713,560 /
359,463 =
2.17
921,698 /
540,056 =
1.71
Quick
Ratio
(305,271-
15,251) /
103,737 =
2.80
(434,250-
14,587) /
254585 =
0.46
(713,560-
12,286) /
359,463 =
1.95
(930,780-
12,812) /
428,674 =
2.14
(921,698-
6,221) /
540,056 =
1.69
Gearing
Ratio
103993 /
408125
100 =
25.5
288122 /
710962
100 =
40.5
358719 /
1119707
100 =
32.0
428930 /
1436655
100 =
29.9
540677 /
1644510
100=
32.9
Ibraco
Current
Ratio
89,427,477 /
16,031,645 =
5.58
71,370,587 /
16,071,039 =
4.44
163,837,067 /
49,300,704 =
3.32
173,198,430 /
74,444,650 =
2.33
211,870,668 /
70,121,227 =
3.02
Quick
Ratio
(89,427,477-
1,863,498) /
16,031,645 =
5.46
(71,370,587-
446,648) /
16,071,039 =
4.43
(163,837,067-
163,133) /
49,300,704 =
3.32
(168,677,996-
10,517,792) /
69,924,216 =
2.32
(211,870,668-
1,067,225) /
70,121,227 =
3.01
Gearing
Ratio
25075452 /
89427477
100 =
28.0
16161550 /
152953830
100 =
10.6
49443630 /
209466615
100 =
23.6
99447898 /
277071448
100 =
35.9
133510350 /
324165311
100 =
41.2

Table A-2: Liquidity Calculations Table
36





Company Ratio 2008 2009 2010 2011 2012
HSL
R
e
c
e
i
v
a
b
l
e
s

Account
Receivable
Turnover
(Times)
309,068,736 /
168423246.5
= 1.84
375,021,001 /
211621822
= 1.77
488,275,905 /
235600566.5
= 2.07
581,515,074 /
233052600.5
= 2.50
603,267,262 /
221680070.5
= 2.72
Average
Collection
Period
(Days)
365 / 1.84 =
198 Days
365 / 1.77 =
206 Days
365 / 2.07 =
176 Days
365 / 2.5 =
146 Days
365 / 2.72 =
134 Days
I
n
v
e
n
t
o
r
y

Inventory
Turnover
(Times)
338,687.000 /
15,814,500
= 21.42
540,552,000 /
14,919,000
= 36.23
581,532,000 /
13,436,500
= 43.28
1,011,730,000
/ 302,448.500
= 3.35
1,352,492,000
/ 299,416,000
= 4.52
Number of
Days In
Inventory
(Days)
365 / 8.36 =
44
365 / 9.12 =
40
365 / 48.48 =
8
365 / 144.57=
3
365 / 87.51 =
4
F
i
x
e
d

A
s
s
e
t
s

Fixed Asset
Turnover
(RM)
09,067,736 /
41,603,000
= RM7.43
375,021,001 /
59200462
= RM6.34
488,275.905 /
83143237.5
= RM5.87
581,515,074 /
104411214.5
= RM5.57
603,267,262 /
63276682.5
= RM9.53
Mudajaya
R
e
c
e
i
v
a
b
l
e
s

Account
Receivable
Turnover
(Times)
422,382,000 /
142,512,500
= 2.96
719,971,000 /
188,933,500
= 3.81
870,428,000 /
303,077,500
= 2.87
1,347,059,000
/ 481,073,500
= 2.80
1,655,722,00
/ 415,996,500
= 3.98
Average
Collection
Period
(Days)
365 / 2.96 =
123
365 / 3.81 =
96
365 / 2.87 =
127
365 / 2.80 =
130
365 / 3.98 =
92
I
n
v
e
n
t
o
r
y

Inventory
Turnover
(Times)
309,068,736 /
4509903 =
68.53
287,575,749 /
8508846 =
33.80
379,448,915 /
12029360.5 =
31.54
455,388,307 /
18161310.5 =
25.07
473,488,099 /
20139721.5 =
23.51
Number of
Days In
Inventory
(Days)

F
i
x
e
d

A
s
s
e
t
s

Fixed Asset
Turnover
(RM)
422,382,000 /
12,236,000 =
RM34.52
719,971,000 /
24143000 =
RM29.82
870,428,000 /
39895000 =
RM21.82
1,347,059,000
/ 59249000 =
RM22.74
717,971,000 /
58757500 =
RM12.25
37


Table A-3: Efficiency Calculation Table





















Company

Ratio 2008 2009 2010 2011 2012
Ibraco
R
e
c
e
i
v
a
b
l
e
s

Account
Receivable
Turnover
(Times)
66,464,728 /
15958287 =
4.16
3,505,814 /
5512104 =
0.64
28,243,968 /
11034791.5 =
2.56
22,511,720 /
12,630,239 =
1.65
122,339,695 /
19202853.5 =
6.37


Average
Collection
Period
(Days)
365 / 4.16 =
88
365 / 0.64 =
570
365 / 2.56 =
143
365 / 1.65 =
221
365 / 6.37 =
57

I
n
v
e
n
t
o
r
y

Inventory
Turnover
(Times)
(56,511,806)
/
6758915.5=
8.36 (Loss)
(1,414,240) /
1155073 =
9.12 (Loss)
14,782,288 /
304890.5 =
48.48
89,430,551 /
618599 =
144.57
93,698,210 /
1070645 =
87.51
Number of
Days In
Inventory
(Days)

365 / 9.12 =
40
365 / 48.48 =
8
365 / 144.57 =
3
365 / 87.51 =
4
F
i
x
e
d

A
s
s
e
t
s

Fixed Asset
Turnover
(RM)
66,464,728 /
2583781 =
RM27.70
3,505,815 /
2065236 =
RM1.70
28,243.968 /
1792266.5 =
RM15.76
22,511,720 /
2225385.5 =
RM10.12
122,339,695 /
2825096.5 =
RM43.30
38

Company Ratio 2008 2009 2010 2011 2012
HSL
Debt - to
Equity
158,966,869 /
242,641,510 =
0.6552
185,595,024 /
292,160,545 =
0.6353
236,777,089 /
345,243,004 =
0.6858
273,685,488 /
409,456,335 =
0.6684
277,077,912 /
479,929,302 =
0.5773

Times -
Interest-
Earned
56,457,859
/241,199,955 =
0.2341
75,568,555 /
287,575,749 =
0.2628
98,419,118 /
379,834,701 =
0.2591
116,598,066
/455,855,991 =
0.2558
121,149,592
/474,071,061 =
0.2556
Mudajaya
Debt - to
Equity
103,993 /
304,132 =
0.3419
288,122 /
422,840 =
0.6814
358,719 /
760,988 =
0.4714
428,930 /
1,007,725 =
0.4256
540,677 /
1,103,833 =
0.4898
Times -
Interest-
Earned
65,432 /
338,687 =
0.1932
167,957 /
540,552 =
0.3107
278,386 /
583,532 =
0.4771
293,948 /
1,011,730 =
0.2905
284,116 /
1,352,492 =
0.2101
Ibraco
Debt - to
Equity
25,075,452 /
144,300,547 =
0.1738
16,161,550 /
136,792,280 =
0.1181
49,443,630 /
160,022,985 =
0.3090
99,447,898 /
177,623,550 =
0.5599
133,510,350 /
90,54,961 =
0.7002
Times -
Interest-
Earned
2,727,753 /
1,878,543 =
1.4521
3,348,553 /
763,578 =
4.3853
8,690,708 /
15,142,870 =
0.5739
16,869,919 /
90,066,348 =
0.1873
18,949,302 /
96,272,753 =
0.1968

Table A-4: Leveraging Ratio Calculation Table


39

Company Ratio 2008 2009 2010 2011 2012
HSL
Cash Flow - to
- Net Income
49,851,837 /
41,839,128 =
1.1915
52,537,638 /
56,322,991 =
0.9328
54,060,191 /
73,438,760 =
0.7361
136,120,401 /
87,268,580 =
1.5598
91,616,954 /
90,694,457 =
0.8999
Cash Flow
Adequacy
49,851,837 /
17,719,180 =
2.8134
52,538,638 /
26,117,028 =
2.0117
54,060,191 /
21,464,851 =
2.5185
136,120,401 /
18,596,976 =
7.3195
81,616,954 /
46,546,806 =
1.7534
Mudajaya
Cash Flow - to
- Net Income
17,093 /
57,247 =
0.2986
220,614 /
134,016 =
1.6462
195,738 /
217,239 =
0.9010
114,720 /
292,581 =
0.3921
512,793 /
248,076 =
2.0671
Cash Flow
Adequacy
17,093 /
(21,906) =
0.7803
220,614 /
(161,867) =
1.3629
195,738 /
(209,097) =
0.9361
114,720 /
177,746 =
0.6454
512,793 /
278,238 =
1.8430
Ibraco
Cash Flow - to
- Net Income
72,519,705 /
(3,467,278) =
20.9155
(3,127,014) /
(7,508,267) =
0.4165
1,981,110 /
7,749,671 =
0.2556
9,413,571 /
12,571,877 =
0.7488
(1,804,991) /
14,106,812 =
0.1280
Cash Flow
Adequacy
72,519,705 /
(545,183) =
133.02
(3,127,014) /
(2,024,969) =
1.5442
1,981,110 /
2,642,864 =
0.7496
9,413,571 /
(62,303,156) =
0.1511
(1,804,991) /
(13,427,588) =
0.1344

Table A-5: Cash Flow Ratio Calculation Table