HM ENTERPRISE SDN BHD

RATIO ANALYSIS

NO RATIO DEFINITION CALCULATION MEDIAN RANGE ASSESSMENT

( Industry
average)
1 Current Current assets 5,267,338 Better than industry
Ratio(CR) Current 2,289,591 1.5:1 3.1:1 average (median).
Liabilities = 2.3:1 To Strong indication
1.2:1 that the company
able to pay it’s
current liabilities.
2 Quick Cash +account 1,894,074 Worse than industry
Ratio Receivable 2,289,591 1.2:1 2.1:1 average but slightly
(QR) Current = 0.83:1 To higher than the
Liabilities 0.6:1 minimum range of
0.6 given to a
commercial
construction
company.
3 Current Current 2,289,591 Worse than industry
Liabilities Liabilities 65,904 1.12:1 0.32:1 average and higher
to Net Net Worth = 34.74:1 To than upper end of
Worth 2.4:1 the range. Short-
Ratio. term creditors
(CL/NW) would have more
capital at risk,
which is not in good
position to go in.
4 Debt to Total 6,813,629 Worse than industry
Equity Liabilities 65,904 1.3:1 0.5:1 average and out of
Ratio Net Worth = 103.38:1 To the range given to a
(DER) 2.7:1 commercial
construction
company. The
company is highly
dependent on debt
capital and may not
to service it’s debt.
5 Fixed Net Fixed 1,592,501 0.08:1 Worse than industry
Assets to Assets 65,904 0.24:1 To average. The ratio
Net Worth Net Worth = 24.16:1 0.64:1 shows that the
Ratio company has a
(FA/NW) heavy investment in
fixed. Fixed assets
require a constant
stream of income to
offset their loss in
value and monthly
installment
servicing.
6 Current Current Assets 5,267,383 Between CA/TA is within the
Assets to Total Assets 6,879,533 _ 0.70:1 suggestion rate
Total =0.765:1 and given to a
Assets ratio or 76.5% 0.80:1 commercial
(CA/TA) construction
industry. 76.5% of
the company’s
assets tied up in
current assets.
Indicates that the
assets of the
company is
considered very
liquid.
7 Collection Account The CP is slightly
Period Receivable AR = (1,284,559 48 days 22 days higher than the
(CP) (AR) x 365 +234,707) / 2 To average but within
/ revenue = 759,633 75 days the typical range.
The company is
CP = 759,633 (365) funding the
5,648,339 construction cost to
=49.08 days the client for 48
days.
8 Average Account AP=(1,198,112 + Worse than industry
age of payable(AP) x 931,485) / 2 45 days _ average of 45 days
account 365 /(material = 1,064,798.5 indicating that the
payable + sub- company is slow to
(AAAP) contract) AAAP=1,064,798 pay it’s bills. The
x 365 / average age of
5,350,016 account payable is
= 72.64 days 24 days greater than
or 73 days its collection period.
9 Assets to Total Assets ATA=(6,879,533 + Worse than industry
Revenue Revenue 2,547,506) /2 29% 19% average. It’s also
Ratio = 4,713,516.5 To higher than upper
(ARR) ARR=4,713,516.5 55% end of the typical
5,648,339 range indicating that
= 0.83 or 83% the company
performing too
much worth to their
assets.
10 Working Revenue AWC=ACA – ACL Worse than industry
Capital Working =(5,267,383 12.1:1 23:1 average and also
Turns Capital +1,728,733) /2 To less than the
(WCT) – (2,289,591 6.1:1 minimum typical
+2,104,704) /2 range of 6.1 given to
=1,300,910.5 a commercial
WCT=5,648,339 construction
1,300,910.5 industry. The
= 4.34:1 company appears
not properly
capitalized or over
capitalized.
11 Account Account AAP =(1,198,112+ Greater than
Payable to Payable 931,485 ) / 2 7.9% 2.9% industry average
Revenue Revenue = 1,064,798.5 To and also higher than
Ratio APRR=1,064,798.5 13.0% upper range given to
(APRR) 5,648,339 a commercial
= 18.85% construction
industry. The
company is highly
funding by suppliers
and sub-contractors.
12 Gross Gross profit 298,323 Worse than industry
Profit Revenue 5,648,339 17% - average. The lower
Margin =0.0528 or 5.28% GPM suggests that
(GPM) the company has a
higher cost of
construction works.
The company need
to do a better
control over its
construction cost
and increase its
profit.
13 General General 625,150 Worse than industry
Overhead Overhead 5,648,339 Less than - average. The
Ratio Revenue = 0.11 or 11% 10% company needs to
(GOR) reduce its general
overhead expenses
or increase its
revenue without
increasing the
general overhead.

14 After tax Net Profit (286,000) Worse than industry

Profit After Tax 5,648,339 2.2% 8.7% average. The
Margin Revenue =(0.0506) or To company run the
(ATPM) (5.06%) 0.6% operation under lost.

15 Return on Net Profit ATA=(6,879,533 ROA of the

Assets After Tax +2,547,500) / 2 6.5% 21.7% company shows a
(ROA) Total Assets =4,713,516.5 To negative trend of
ROA=(286,600) 2.0% (6.08%).
4,713,516.5 Improvement in the
= (0.0608) or after- tax profit
(6.08%) margin will help
increase this
percentage.
16 Return on Net Profit after ROE=(286,600) Worse than industry
Equity tax / Equity 201,098 16.7% 53% average. Needs to
(ROE) =(1.425) or To improve after – tax
(142.52%) 5.4% profit margin.
17 Degree of Net Fixed 1,592,501 Worse than the
fixed Assets / Total 1,714,280 - 60% range given to a
Assets Fixed Assets =0.93 or 93% To commercial
 Newness 40% construction
(DFAN) industry.
SAMA PELANGIN SDN BHD

RATIOS ANALYSIS

NO RATIO DEFINITION CALCULATION MEDIAN RANGE ASSESSMENT

( Industry
average)
1 Current Current assets 3,489,581 Worse than industry
Ratio(CR) Current 3,306,239 1.5: 1 3.1:1 average. The
Liabilities = 1.O5 : 1 to company’s CR
1.2:1 below 1.5:1 is
considered under
capitalized and may
run into financial
problem. Need to
increase cash capital
through debt
financing or
converting of fixed
assets to cash.
2 Quick Cash +account 1,484,073 Worse than industry
Ratio Receivable 3,306,239 1.2:1 2.1:1 average and also
(QR) Current = 0.45:1 To lower than the
Liabilities 0.6:1 minimum range
given to a
commercial
construction
industry. The
company with QR
less than one is
considered not
liquid. The company
will need to raise up
their cash either
through debt
financing or
converting their
long term assets to
cash.
3 Current Current 3,306,239 Worse than industry
Liabilities Liabilities 317,995 1.12:1 0.32:1 average and higher
to Net Net Worth = 10.39:1 To than upper limit of
Worth 2.4:1 the range given to a
Ratio. commercial
(CL/NW) construction
industry. Short-term
creditors would
have more capital at
risk which is not in
good position to go
 in.

4 Debt to Total 3,359,498 Worse than industry

Equity Liabilities 317,995 1.3:1 0.5:1 average and out of
Ratio Net Worth = 10.56:1 to the range given to a
(DER) 2.7:1 commercial
construction
company. The
company is highly
dependent on debt
capital. The ratio
indicates that the
company may not
to service it’s debt.
5 Fixed Net Fixed 187,912 0.08:1 Worse than industry
Assets to Assets 317,995 0.24:1 To average but well
Net Worth Net Worth = 0.59:1 0.64:1 within the typical
Ratio range. The high
(FA/NW) ratio indicates that
the company has a
heavy investment in
fixed assets.. Fixed
assets require a
constant stream of
income to offset
their loss in value
and monthly
installment
servicing.

6 Current Current Assets 3,489,581 Between 95% of the

Assets to Total Assets 3,677,493 _ 0.70:1 company’s assets
Total =0.95:1 And tied up in current
Assets ratio or 95% 0.80:1 assets. The
(CA/TA) company’s assets
would be very
liquid.

7 Collection Account Better than industry

Period Receivable AR = (1,059,125 48 days 22 days average. On
(CP) (AR) x 365 +909,854) / 2 To average, the
/ revenue = 984,489.5 75 days company is funding
the construction cost
CP =984,489.5(365) to the client for 44
8,146,949 days. The
=44 days recommended CP
for a commercial
construction
company is 45 days.
8 Average Account AP=(1,153,331 + Worse than industry
age of payable(AP) x 1,162,007) / 2 45 days _ average of 45 days
account 365 /(material = 1,157,669 indicating that the
payable + sub- company is slow to
(AAAP) contract) AAAP=1,157,669 pay it’s bills. The
x 365 / average age of
7,158,240 account payable is
= 59 days 15 days greater than
its collection period-
Which is an
indication that the
company is
withholding
payments from its
suppliers and sub-
contractors even
after the client has
paid them for the
works.
9 Assets to Total Assets ATA=(3,677,493 + Worse than industry
Revenue Revenue 3,355,689) /2 29% 19% average but slightly
Ratio = 3,516,591 To lower than upper
(ARR) ARR=3,516,591 55% end of the typical
8,146,949 range. Its does not
= 0.43 0r 43% appear that the
company is
performing too
much using their
assets.
10 Working Revenue AWC=ACA – ACL WCT of the
Capital Working =(3,489,581 12.1 23 company is much
Turns Capital +3,090,218) /2 To higher than industry
(WCT) – (3,306,239 6.1 average and also
+2,994,464) /2 greater than the
=139,548 maximum typical
WCT=(8,146,949- range of 23 given to
284,514) / a commercial
139,548 construction
= 56.34 industry. The
company appears
not to be properly
capitalized or under
capitalized.

11 Account Account AAP =(1,153,331+ Greater than

Payable to Payable 1,162,007) /2 7.9% 2.9% industry average
Revenue Revenue = 1,157,669 To and also higher than
Ratio APRR=1,157,669 13.0% upper range given to
(APRR) 8,146,949 a commercial
= 0.14 construction
Or 14% industry. The
company is highly
 funding by suppliers
and sub-contractors.

12 Gross Gross profit 566,204 Worse than industry

Profit Revenue 8,146,949 17% - average. The lower
Margin =0.0695 or 6.95% GPM suggests that
(GPM) the company has a
higher cost of
construction works.
The company need
to do a better
control over its
construction cost
and increase its
profit.
13 General General 443,831 Within the
Overhead Overhead 8,146,949 Less than - suggestion rate of
Ratio Revenue = 0.054 or 5.4% 10% less than 10% given
(GOR) to a commercial
construction
company. The
company spent
5.4% of its revenue
on general
overhead.

14 After tax Net Profit 29,319 Worse than industry

Profit After Tax 8,146,949 2.2% 8.7% average and also
Margin Revenue =0.0036 or 0.36% To lower than the
(ATPM) 0.6% minimum range of
0.6% given to a
commercial
construction
company.
15 Return on Net Profit ATA=(3,677,493 Worse than industry
Assets After Tax +3,355,689 / 2 6.5% 21.7% average and also
(ROA) Total Assets =3,516,591 To below than the
ROA=29,319 2.0% minimum range of a
3,516,591 commercial
= 0.0083 or construction
0.83% company.
Improvement in the
after- tax profit
margin will help
increase this
percentage.
16 Return on Net Profit after AE=(317,254 The after –tax return
Equity tax / Equity +361,225) / 2 16.7% 53% on equity is worse
(ROE) = 339,239.5 to than industry
ROE= 29,319 5.4% average but slightly
339,239.5 higher than
= 0.0864 or minimum range for
8.64% a commercial
construction
 company.

17 Degree of Net Fixed 187,912 60% Greater than a

fixed Assets / Total 265,471 - to target range
Assets Fixed Asset =0.70 or 70% 40% between 60% to
Newness 40% indicates that
(DFAN) the company would
have a lot of new
machine, which is
usually involve by
large loan payment.
SYARIKAT YUSOFF YASSIN SDN BHD

RATIOS ANALYSIS

NO RATIO DEFINITION CALCULATION MEDIAN RANGE ASSESSMENT

( Industry
average)
1 Current Current assets 7,171,964 worse than industry
Ratio(CR) Current 5,795,725 1.5:1 3.1:1 average (median)
Liabilities = 1.24:1 to but slightly higher
1.2:1 than the lower end
of the range. Strong
indication that the
company is under
capitalized and may
run into financial
problem in future
year. Because of the
current ratio is
greater than 1.0:1,
indicating that the
company is able to
meet its short-term
cash needs.
2 Quick Cash +account 4,585,923 Worse than industry
Ratio Receivable 5,795,725 1.2:1 2.1:1 average but slightly
(QR) Current = 0.79:1 To higher than the
Liabilities 0.6:1 minimum range of
0.6:1 given to a
commercial
construction
company. The
company with QR
less than 1.0:1 is
considered not
liquid and need to
increase their cash
either through
converting its long –
term assets to cash
or debt financing.
3 Current Current 5,795,725 Worse than industry
Liabilities Liabilities 2,421,306 1.12:1 0.32:1 average. Short-term
to Net Net Worth = 2.4:1 To creditors would
Worth 2.4:1 have more capital at
Ratio. risk, which is not in
(CL/NW) good position to go
 in. The higher ratio
shows an indication
of intensive used of
suppliers and sub-
contractors.
4 Debt to Total 5,990,972 Worse than industry
Equity Liabilities 2,421,306 1.3:1 0.5:1 average. The high
Ratio Net Worth = 2.47:1 To ratio indicates that
(DER) 2.7: the company is
highly dependent on
debt capital to
perform their
business. The
company may not to
service its debt
especially during
the down turn in the
economic.
5 Fixed Net Fixed 1,240,314 0.08:1 Worse than industry
Assets to Assets 2,421,306 0.24:1 To average but still
Net Worth Net Worth = 0.51:1 0.64:1 within the typical
Ratio range given to a
(FA/NW) construction
company. 51% of
the company’s
equity is tied up in
fixed assets. The
company has a
heavy investment in
fixed assets. Fixed
assets require a
constant stream of
income to offset
their loss in value
and monthly
installment
servicing.

6 Current Current Assets 7,171,964 Between CA/TA is greater

Assets to Total Assets 8,412,278 _ 0.70:1 than the suggestion
Total =0.85:1 or85% and rate given to a
Assets ratio 0.80:1 commercial
(CA/TA) construction
industry. 85% of the
company’s assets is
tied up in current
assets. Indicates that
the assets of the
company is
considered very
liquid.
7 Collection Account The CP is slightly
Period Receivable AR = (3,158,056+ 48 days 22 days higher than the
(CP) (AR) x 365 9,339,549) / 2 to industry average but
/ revenue = 6,248,802.5 75 days within the typical
CP = 6,248,802.5 x range given to a
365/ construction
42,740,122 industry.
= 53.36 days The company is
Or 53 days. funding the
construction cost to
the client for 53
days or 53 days to
collect the payments
from client.

8 Average Account AP=(4,809,942 + Worse than industry

age of payable(AP) x 11,764,035 / 2 45 days _ average of 45 days
account 365 /(material = 8,286,988.5 indicating that the
payable + sub- company is slow to
(AAAP) contract) AAAP=8,286,988.5 pay it’s bills. The
x 365 / average age of
42,740,122 account payable is
= 70.77 days 18 days greater than
Or 71 days its collection period.

9 Assets to Total Assets ATA=(8,412,278 + ARR of the

Revenue Revenue 15,708,772) /2 29% 19% company is slightly
Ratio = 12,060525 To lower than the
(ARR) ARR=12,060,525 55% industry average but
42,740,122 still within the
= 0.28 or 28% typical range given
to a commercial
construction
industry. The
company appears to
be fairly performing
its assets.
10 Working Revenue AWC=ACA – ACL WCT is greater than
Capital Working =(7,171,964 + 12.1 23 the industry average
Turns Capital 14,363,951) /2 To and also higher than
(WCT) – (5,795,725 + 6.1 upper end of the
13,229,443) /2 typical range. The
=1,255,373.5 company is
WCT=42,740,122 considered under
1,255,373.5 capitalized and need
= 34.04 to increase the
availability of their
current assets.
11 Account Account AAP =(4,491,494+ Greater than
Payable to Payable 3,970,962)/2 7.9% 2.9% industry average but
Revenue Revenue = 4,231,228 To still lower than the
Ratio APRR=4,231,228 13.0% upper end of typical
(APRR) 42,740,122 range between 2.9%
= 0.0989 or to 13% given to a
9.89% commercial
construction
company. The
company is highly
funding by suppliers
and sub-contractors.
12 Gross Gross profit 1,721,016 Worse than industry
Profit Revenue 42,740,122 17% - average. The lower
Margin =0.0403 GPM suggests that
(GPM) Or the company has a
4.03% higher cost of
construction works.
The company need
to do a better
control over its
construction cost
and increase its
profit.
13 General General 1,023,505 Better than the
Overhead Overhead 42,740,122 Less than - suggested rate of
Ratio Revenue = 0.0239 10% less than 10%. The
(GOR) Or company appears to
2.39% be properly
managed their
overhead expenses.

14 After tax Net Profit 291,615 Worse than industry

Profit After Tax 42,740,122 2.2% 8.7% average but slightly
Margin Revenue =0.0068 To higher than the
(ATPM) Or 0.6% minimum range of
0.68% 0.6%.The company
needs to works on
its profitability
either by cutting
costs and increasing
the profit and
overhead markup.
15 Return on Net Profit ATA=12,060,525 ROA of the
Assets After Tax 6.5% 21.7% company is less than
(ROA) Total Assets ROA= 291,615 to industry average for
12,060,525 2.0% a commercial
=0.0241 or construction
2.41% company but well
within the range.
Improvement in
after- tax profit
margin will help
increase this
percentage.
16 Return on Net Profit after AE=2,421,306 + Worse than industry
Equity tax / Equity 2,129,691 / 2 16.7% 53% average. Needs to
(ROE) 2,275,498.5 to improve in after –
= 0.1281 5.4% tax profit margin.
or However ROE of
12.81% the company still
within the range.

17 Degree of Net Fixed 1,240,314 Greater than a target

fixed assets / Total 1,491,854 - 60% range between 60%
Assets Fixed Assets =0.83 to to 40% indicates
Newness Or 40% that the company
(DFAN) 83% would have a lot of
new machine, which
is usually involve by
large loan payment
and interest
expenses.
HAMPARAN MEWAH SDN BHD

RATIOS ANALYSIS

NO RATIO DEFINITION CALCULATION MEDIAN RANGE ASSESSMENT

( Industry
average)
1 Current Current assets 614,203 Worse than industry
Ratio(CR) Current 535,334 1.5:1 3.1:1 average (median)
Liabilities = 1.15:1 to and slightly lower
1.2:1 than the minimum
range of 1.2:1 given
to a commercial
construction
industry. The
company is
considered under
capitalized.
However, CR is
still greater
than1.0:1 indicates
that the company is
able to pay it’s
short-term
liabilities.
2 Quick Cash +account 460,603 Worse than industry
Ratio Receivable 535,334 1.2:1 2.1:1 average but slightly
(QR) Current = 0.86:1 to higher than the
Liabilities 0.6:1 minimum range of
0.6:1 given to a
commercial
construction
company. The
company with QR
less than 1.0:1 is
considered not
liquid and need to
raise up its cash
capital.

3 Current Current 535,334 Worse than industry

Liabilities Liabilities 106,030 1.12:1 0.32:1 average. Short-term
to Net Net Worth = 5.04:1 To creditors would
Worth 2.4:1 have more capital at
Ratio. risk, which is not a
(CL/NW) good position to go
 in.

4 Debt to Total 535,334 Worse than industry

Equity Liabilities 106,030 1.3:1 0.5:1 average and out of
Ratio Net Worth = 5.04:1 To the range given to a
(DER) 2.7:1 commercial
construction
company. The
company is highly
dependent on debt
capital and may not
to service it’s debt.
5 Fixed Net Fixed 27,161 0.08:1 FA/NW of the
Assets to Assets 106,030 0.24:1 To company is slightly
Net Worth Net Worth = 0.26:1 0.64:1 higher than the
Ratio industry average but
(FA/NW) well within the
typical range. The
company appears to
be properly
managed their
investment in fixed
assets.
6 Current Current Assets 614,203 Between CA/TA is greater
Assets to Total Assets 641,364 _ 0.70:1 than the suggestion
Total =0.95:1 And rate given to a
Assets ratio Or 0.80:1 commercial
(CA/TA) 95% construction
industry. 95% of the
company’s assets
tied up in current
assets. Indicating
that the assets of the
company would be
very liquid.
7 Collection Account Better than industry
Period Receivable AR = (306,514 48 days 22 days average and equal
(CP) (AR) x 365 +138500) / 2 To with the minimum
/ revenue = 222,507 75 days typical range. It is
also below the
CP =222,507(365) recommended CP of
3,725,193 45 days. The
=22 days company is funding
the construction cost
to the client for 22
days.
8 Average Account AP=(312,740 + Slightly higher than
age of payable(AP) x 583,415) / 2 45 days _ industry average of
account 365 /(material = 448,077.5 45 days indicating
 payable + sub- that the company is
(AAAP) contract) AAAP=448,077.5 slow to pay it’s
x 365 / bills. The AAAP is
3,492,929 25 days greater than
=46.82 or collection period.
47days

9 Assets to Total Assets ATA=(641,364 + The company’s

Revenue Revenue 720,978) /2 29% 19% ARR is lower than
Ratio = 681,171 To industry average
(ARR) ARR= 681,171 55% and also below than
3,725,193 the lower end of the
= 0.18 0r 18% range. Companies
with ARR below the
lower end of the
range are
underutilizing their
assets.
10 Working Revenue AWC=ACA – ACL Worse than industry
Capital Working =(614,203 12.1:1 23:1 average and also
Turns Capital +709,731) /2 To less than the
(WCT) – (535,334 6.1:1 minimum typical
+604,188) /2 range of 6.1 given to
=92,207.5 a commercial
WCT=(3,725,193- construction
3,492,929) / industry. The
92,207.5 company appears
= 2.52 not properly
capitalized or over
capitalized.

11 Account Account AAP =(312,740+ Greater than

Payable to Payable 583,415) /2 7.9% 2.9% industry average
Revenue Revenue = 448,077.5 To and slightly lower
Ratio APRR=448,0775.5 13.0% than upper end of
(APRR) 3,725,193 the range given to a
= 0.12 commercial
Or 12% construction
industry. The
company is highly
funding by suppliers
and sub-contractors.
12 Gross Gross profit 168,981 Worse than industry
Profit Revenue 3,725,193 17% - average. The lower
Margin =0.045 GPM suggests that
(GPM) or 4.5% the company has a
higher cost of
construction works.
The company need
to do a better
 control over its
construction cost
and increase its
profit.

13 General General 180,053 Better than the

Overhead Overhead 3,725,193 Less than - suggestion rate of
Ratio Revenue = 0.048 10% less than 10%. The
(GOR) or 4.8% company appears to
be properly
managed their
overhead costs.
14 After tax Net Profit (10,763) Worse than industry
Profit After Tax 3,725,193 2.2% 8.7% average. The
Margin Revenue =(0.0029) To company running
(ATPM) or (0.29%) 0.6% their business
operation under lost.
15 Return on Net Profit ATA=(641,364 ROA of the
Assets After Tax +720,978 / 2 6.5% 21.7% company shows a
(ROA) Total Assets =681,171 To negative trend of
ROA=(10,763) 2.0% (1.58%) due to
681,171 ATPM of the
= (0.0158) or company is
(1.58%) negative.
Improvement in the
after- tax profit
margin will help
increase this
percentage.
16 Return on Net Profit after AE=(106,030 Worse than industry
Equity tax / Equity +116,793) / 2 16.7% 53% average. Needs to
(ROE) = 222,823 to improve in the after
ROE= (10,763) 5.4% – tax profit margin.
111,411.5
= (0.0966) or
(9.66%)
17 Degree of Net Fixed 27,161 60% greater than the
fixed Assets / Total 31,747 - to range given to a
Assets Fixed Asset =0.85 or 85% 40% commercial
Newness construction
industry. However
it’s only involved a
very small amount
of assets transaction.
VILLA EMAS SDN BHD

RATIOS ANALYSIS

NO RATIO DEFINITION CALCULATION MEDIAN RANGE ASSESSMENT

( Industry
average)
1 Current Current assets 780,593 Worse than industry
Ratio(CR) Current 387,728 1.5:1 3.1:1 average. The
Liabilities = 2.01:1 To company’s CR
1.2:1 below 1.5:1 is
considered under
capitalized and may
run into financial
problem. Need to
increase cash capital
through debt
financing or
converting of fixed
assets to cash.
2 Quick Cash +account 318,351 Worse than industry
Ratio Receivable 387,728 1.2:1 2.1:1 average and also
(QR) Current = 0.82:1 To lower than the
Liabilities 0.6:1 minimum range
given to a
commercial
construction
industry. The
company with QR
less than one is
considered not
liquid. The company
will need to raise up
their cash either
through debt
financing or
converting their
long term assets to
cash.
3 Current Current 387,728 Worse than industry
Liabilities Liabilities 412,752 1.12:1 0.32:1 average and higher
to Net Net Worth =0.94:1 To than upper limit of
Worth 2.4:1 the range given to a
 Ratio. commercial
(CL/NW) construction
industry. Short-term
creditors would
have more capital at
risk which is not in
good position to go
in.

4 Debt to Total 391,123 Worse than industry

Equity Liabilities 412,752 1.3:1 0.5:1 average and out of
Ratio Net Worth =0.95:1 To the range given to a
(DER) 2.7:1 commercial
construction
company. The
company is highly
dependent on debt
capital. The ratio
indicates that the
company may not
to service it’s debt.
5 Fixed Net Fixed 23,282 0.08:1 Worse than industry
Assets to Assets 412,752 0.24:1 To average but well
Net Worth Net Worth =0.0564 0.64:1 within the typical
Ratio or 5.64% range. The high
(FA/NW) ratio indicates that
the company has a
heavy investment in
fixed assets.. Fixed
assets require a
constant stream of
income to offset
their loss in value
and monthly
installment
servicing.
6 Current Current Assets 780,593 Between 95% of the
Assets to Total Assets 803,875 _ 0.70 company’s assets
Total =0.97 And tied up in current
Assets ratio or 97% 0.80 assets. The
(CA/TA) company’s assets
would be very
liquid.

7 Collection Account Better than industry

Period Receivable CP =469,336 (365) 48 days 22 days average. On
(CP) (AR) x 365 2,337,346 To average, the
/ revenue = 75 days company is funding
the construction cost
to the client for 44
days. The
recommended CP
for a commercial
construction
company is 45 days.
8 Average Account AP=(1,153,331 + Worse than industry
age of payable(AP) x 1,162,007) / 2 45 days _ average of 45 days
account 365 /(material = 1,157,669 indicating that the
payable + sub- company is slow to
(AAAP) contract) AAAP=1,157,669 pay it’s bills. The
x 365 / average age of
7,158,240 account payable is
= 59 days 15 days greater than
its collection period-
Which is an
indication that the
company is
withholding
payments from its
suppliers and sub-
contractors even
after the client has
paid them for the
works.
9 Assets to Total Assets ATA=(803,875 + Worse than industry
Revenue Revenue 437,842) /2 29% 19% average but slightly
Ratio = 620,858.5 To lower than upper
(ARR) ARR=620,858.5 55% end of the typical
2,337,346 range. Its does not
= 0.2656 appear that the
Or 26.56% company is
performing too
much using their
assets.
10 Working Revenue AWC=ACA – ACL WCT of the
Capital Working =(780,593 12.1 23:1 company is much
Turns Capital +437,842) /2 To higher than industry
(WCT) – (387,728 6.1:1 average and also
+38,115) /2 greater than the
=396,296 maximum typical
WCT=2,337,346 range of 23 given to
396,296 a commercial
= 5.89:1 construction
industry. The
company appears
not to be properly
capitalized or under
capitalized.

11 Account Account Greater than

 Payable to Payable APRR= 204,956 7.9% 2.9% industry average
Revenue Revenue 2,337,346 To and also higher than
Ratio = 0.0876 13.0% upper range given to
(APRR) Or 8.76% a commercial
construction
industry. The
company is highly
funding by suppliers
and sub-contractors.

12 Gross Gross profit 144,508 Worse than industry

Profit Revenue 3,337,346 17% - average. The lower
Margin =0.618 or GPM suggests that
(GPM) 6.18% the company has a
higher cost of
construction works.
The company need
to do a better
control over its
construction cost
and increase its
profit.
13 General General 122,384 Within the
Overhead Overhead 2,337,346 Less than - suggestion rate of
Ratio Revenue = 0.524 or 10% less than 10% given
(GOR) 5,24% to a commercial
construction
company. The
company spent
5.4% of its revenue
on general
overhead.

14 After tax Net Profit 13,025 Worse than industry

Profit After Tax 2,337,346 2.2% 8.7% average and also
Margin Revenue =0.0056 To lower than the
(ATPM) Or 0.56% 0.6% minimum range of
0.6% for a
commercial
construction
company.
15 Return on Net Profit ATA=(803,875 Worse than industry
Assets After Tax +437,842 / 2 6.5% 21.7% average and also
(ROA) Total Assets =620,858.5 To below than the
ROA=13,025 2.0% minimum range of a
620,858.5 commercial
= 0.0209 construction
2.09% company.
Improvement in the
after- tax profit
margin will help
increase this
percentage.
16 Return on Net Profit after AE=(412,752 The after –tax return
 Equity tax / Equity +399,727) / 2 16.7% 53% on equity is worse
(ROE) = 406,239.5 to than industry
ROE= 13,025 5.4% average but slightly
406,239.5 higher than
= 0.032 minimum range for
Or 3.2%% a commercial
construction
company.

17 Degree of Net Fixed 23,282 Greater than target

fixed Assets / Total 28,338 - 60% range between 60%
Assets Fixed Asset =0.82 to to 40% indicates
Newness or 82% 40% that the company
would have a lot of
new machine, which
is usually involve by
large loan payment.
Table 1.1 Summary of Financial Ratio Analysis
SUMMARY OF FINANCIAL RATIO ANALYSIS
No Ratios Company Company Company Company Company Company Median Range
A B C X Y Z
1 3.1
CR 2.3:1 1.05:1 1.24:1 1.15:1 2.01:1 1.5:1 to
1.2
2 2.1
QR 0.83:1 0.45:1 0.79:1 0.86:1 0.82:1 1.2:1 To
0.6
3 0.32
CL/NW 34.74:1 10.39:1 2.4:1 5.04:1 0.94:1 1.12:1 To
2.4
4 0.5
DER 103.38:1 10.56:1 2.47:1 5.04:1 0.95:1 1.3 To
2.7
5 0.08
FA/NW 24.16:1 0.59:1 0.51:1 0.26:1 0.056:1 0.24 To
0.64
6 0.70
CA/TA 0.765:1 0.95:1 0.85:1 0.95:1 0.97:1 - To
0.80
7 48 days 22 days
CP 49 days 44 days 53 days 22 days To
75 days
8 45 days -
AAAP 73 days 59 days 71 days 47 days 59 days
9 19%
ARR 83% 43% 28% 18% 26.56% 29% To
55%
10 23
WCT 4.34:1 56.34:1 34.04:1 2.52:1 5.89:1 12.1 To
6.1
11 2.9%
APRR 18.85% 14% 9.89% 12% 8.76% 7.9% To
13.0%
12 _
GPM 5.2% 6.95% 4.03% 4.5% 6.18% 17%
13 Less
11% 5.4% 2.39% 4.85% 5.24% than -
GOR 10%
14 8.7%
ATPM (5.06%) 0.36% 0.68% (0.029%) 0.056% 2.2% To
 0.6%
15 21.7%
ROA (6.08%) 0.83% 2.41% (1.58%) 2.09% 6.5% To
2.0%
16 53%
ROE (142.52%) 8.64% 12.81% (9.66%) 3.2% 16.7% To
5.4%
17 60%
DFAN 93% 70% 83% 85% 82% - To
40%