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Contents
1.0 DEFINITION OF RATIO ANALYSIS ............................................................................................ 2

1.1 BENEFITS OF RATIO ANALYSIS....................................................................................................... 3
2.0 INTRODUCTION ............................................................................................................................ 4

2.1 OVERVIEW COMPANY KHIND HOLDINGS BERHAD ....................................................................... 5
2.1.1 INCOME STATEMENT & BALANCE SHEET KHIND HOLDING BHD ....................... 6
2.2 OVERVIEW COMPANY MILUX CORPORATION BERHAD................................................................ 9
2.2.1 INCOME STATEMENT & BALANCE SHEET MILUX COORPORATION BERHAD 10

3.0 FORMULA FOR RATIO ANALYSIS .......................................................................................... 13
4.0 RESULTS AND ANALYSIS ......................................................................................................... 15
4.1 CALCULATION RATIO FOR KHIND HOLDING BHD ....................................................................... 15
4.1.1 Liquidity ratio ...................................................................................................................... 15

4.1.2 Asset management ratios ..................................................................................................... 15
4.1.3 Profitability Ratio................................................................................................................. 16
4.1.4 Debt coverage ratio .............................................................................................................. 17
4.15 Market value ratios................................................................................................................ 17
4.2 CALCULATION RATIO FOR MILUX CORPORATION BHD .............................................................. 18
4.2.1 Liquidity ratio ...................................................................................................................... 18

4.2.2 Asset management ratios ..................................................................................................... 18
4.2.3 Profitability Ratio................................................................................................................. 19
4.2.4 Debt coverage ratio .............................................................................................................. 20
4.2.5 Market value ratios............................................................................................................... 20
4.3 ANALYSIS RATIO KHIND HOLDING AND MILUX CORPORATION ................................................. 21
4.3.1 LIQUIDITY RATIO ANALYSIS ....................................................................................... 21

4.3.3 PROFITABILITY RATIO ................................................................................................... 32
4.3.4 DEBT COVERAGE RATIO ............................................................................................... 36
5.0 REFERENCE.................................................................................................................................. 38
1.0 DEFINITION OF RATIO ANALYSIS
Ratio analysis is a tool brought into play by individuals to carry out an evaluative analysis of
information in the financial statements of a company. These ratios are calculated from current
year figures and then compared to past years, other companies, the industry, and also the
company to assess the performance of the company. Besides, ratio analysis is used
predominantly by proponents of financial analysis.
As stated by Investopedia, there are numerous ratios that can be estimated from the financial
statements pertaining to a business companys activity, performance, liquidity, and financing.
Some of the most common ratios include the debt-equity ratio, price-earnings ratio, asset
turnover, earnings per share, and working capital.
1.1 BENEFITS OF RATIO ANALYSIS
The ratio analysis forms an essential part of the financial analysis which is a vital part of
business planning. The key benefits of ratio analysis include:
Determines profitability
Ratio analysis assists managers to work out the production of the company by figuring the
profitability ratios. Also, the management can evaluate their revenues to check if their
productivity. Thus, probability ratios are helpful to the company in appraising its
performance based on current earning.
Helpful in evaluating solvency
By computing the solvency ratio, the companies are able to keep an eye on the correlation
between the assets and the liabilities. If, in any case, the liabilities exceed the assets, the
company is able to know its financial position. This is helpful in case they wish to set up a
plan for loan repayment.
Better financial analysis
Ratio analysis is also helpful to recluses, in addition to shareholders, debenture holders, and
creditors. Besides, bankers are also able to know the profitability of the company to find out
whether they are able to pay the dividend and interests under a specific period.
Performance analysis
Ratio analysis is also helpful in analysing the performance of a company. Through financial
analysis, companies can review their performance in the past years. This is also helpful in
identifying their weaknesses and improving on them.
Forecasting
At present, many companies use ratio analysis to reveal the trends in production. This
provides them an opportunity for estimation of future trends and thus the foundation for
budget planning so as to determine the course of action for the growth and development of
the business.
2.0 INTRODUCTION
Performance evaluation of a company is usually related to how well a company can use it
assets, shareholder equity and liability, revenue and expenses. Financial ratio analysis is one
of the best tools of performance evaluation of any company. In order to determine the
financial position of the electrical and electronics appliances company and to make a
judgment of how well the electrical and electronics appliances company efficiency, its
operation and management and how well the company has been able to utilize its assets and
earn profit.
I used ratio analysis for easily measurement of liquidity position, asset management
condition, profitability and market value and debt coverage situation of the electrical and
electronics appliances company for performance evaluation. It analysis the company use of
its assets and control of its expenses. It determines the greater the coverage of liquid assets to
short-term liabilities and it also compute ability to pay electrical and electronics appliances
company monthly mortgage payments from the cash generate. It measures electrical and
electronics appliances company overall efficiency and performance. It determines of share
market condition of company. I am choosing two electrical companies which are Khind
Holding Bhd and Milux Corporation Berhad.
2.1 OVERVIEW COMPANY KHIND HOLDINGS BERHAD
KHIND Holdings Berhad is a Malaysia leading electrical and electronics appliances company
founded by Cheng King Fa. Khind has been expanding its business in Malaysia, Singapore
and Hong Kong in recent years. Driven by his clear vision, the business flourished and in the
late seventies, developed to include the manufacture of electrical accessories and lamps. The
next decade witnessed Khind's increasing venture into the increase export market. It was
around this time that Khind also brought in a set of professional managers into the family
business.
In 1996, the company took the big step of investing in Material Resource Planning (MRP)
software and their accounting software could not keep up with the company's rapid growth.
In 1992 Khind's manufacturing expanded to include fans and other household appliances and
by the turn of the millennium, the Group was distributing audio-visual products and white
goods. Khind had a more than 200 "innovatively-designed products for the consumers.
Khind exports its products to well over 50 countries around the globe in 2010. Its largest
export market is the Middle East region. The Company also exports its products to the
Association of South East Asian Nations (ASEAN).Khind is an original equipment
manufacturer (OEM) to Japanese and European customers. Company are provided in the
form of text, graphic, audio, downloads, links, or source codes (collectively 'Services and
Materials'). KHIND retains all rights to such Services and Materials. The Services and
Materials are intended only for KHIND's customers and are provided only for your reference.
2.1.1 INCOME STATEMENT & BALANCE SHEET KHIND HOLDING BHD
KHIND HOLDINGS BERHAD
Income Statement for the year ended 31 December 2015
Fiscal year is January-December. All values MYR Thousands. 2015

Sales/Revenue 337,768.0
Cost of Goods Sold (COGS) incl. D&A 230,064.0
COGS excluding D&A 225,383.0
Depreciation & Amortization Expense 4,681.0
Depreciation 4,657.0
Amortization of Intangibles 24.0
Amortization of Deferred Charges -
Gross Income 107,704.0
SG&A Expense 95,499.0
Other SG&A 95,499.0
Other Operating Expense 2,129.0
EBIT 10,076.0
Unusual Expense (853.0)
Non-Operating Income/Expense 1,398.0
Non-Operating Interest Income 295.0
Interest Expense 3,460.0
Gross Interest Expense 3,460.0
Pre-tax Income 9,162.0
Income Tax 2,982.0
Income Tax - Current Domestic 2,879.0
Income Tax - Current Foreign (158.0)
Income Tax - Deferred Domestic 261.0
Consolidated Net Income 6,180.0
Net Income 6,180.0
Net Income After Extra ordinaries 6,180.0
Net Income Available to Common 6,180.0
EPS (Basic) 0.15
Basic Shares Outstanding 40,059.0
EPS (Diluted) 0.15
Diluted Shares Outstanding 40,059.0
EBITDA 14,757.0
EBIT 10,076.0
KHIND HOLDINGS BERHAD
Balance Sheet as at 31 December 2015
ASSETS
Cash & Short Term Investments 38,937.0
Cash Only 37,460.0
Short-Term Investments 1,477.0
Total Accounts Receivable 65,434.0
Accounts Receivables, Net 62,893.0
Accounts Receivables, Gross 67,226.0
Bad Debt/Doubtful Accounts (4,333.0)
Other Receivables 2,541.0
Inventories 79,157.0
Finished Goods 63,998.0
Work in Progress 6,628.0
Raw Materials 5,190.0
Progress Payments & Other 3,341.0
Other Current Assets 3,154.0
Prepaid Expenses 1,460.0
Miscellaneous Current Assets 1,694.0
Total Current Assets 186,682.0
Net Property, Plant & Equipment 58,034.0
Property, Plant & Equipment Gross 109,359.0
Buildings 41,075.0
Land & Improvements 2,352.0
Machinery & Equipment 7,605.0
Construction in Progress 211.0
Leases 10,363.0
Transportation Equipment 7,121.0
Other Property, Plant & Equipment 40,632.0
Accumulated Depreciation 51,325.0
Buildings 7,815.0
Total Investments and Advances 2,905.0
Other Long-Term Investments 2,905.0
Intangible Assets 3,998.0
Net Goodwill 3,826.0
Net Other Intangibles 172.0
Other Assets 1,901.0
Deferred Charges 1,901.0
Total Assets 258,455.0
LIABILITIES & SHAREHOLDERS' EQUITY

ST Debt & Current Portion LT Debt 49,062.0
Short Term Debt 46,484.0
Current Portion of Long Term Debt 2,578.0
Accounts Payable 15,030.0
Income Tax Payable 810.0
Other Current Liabilities 37,912.0
Accrued Payroll -
Miscellaneous Current Liabilities 37,912.0
Total Current Liabilities 102,814.0
Long-Term Debt 30,002.0
Long-Term Debt excl. Capitalized Leases 28,547.0
Non-Convertible Debt 28,547.0
Capitalized Lease Obligations 1,455.0
Deferred Taxes (1,464.0)
Deferred Taxes Credit 3,471.0
Deferred Taxes Debit 4,935.0
Other Liabilities (excl. Deferred Income) -
Total Liabilities 136,287.0
Common Equity (Total) 122,168.0
Common Stock Par/Carry Value 40,059.0
Retained Earnings 74,163.0
Cumulative Translation Adjustment/Unrealized For. Exch. Gain 7,946.0
Total Shareholders' Equity 122,168.0
Total Equity 122,168.0
Liabilities & Shareholders' Equity 258,455.0
2.2 OVERVIEW COMPANY MILUX CORPORATION BERHAD
Milux Corporation Berhad (Milux), it is a Malaysia-based investment holding company. The

Company also provides management services through its subsidiaries and engaged in dealer
in gas cookers, electrical household appliances and their related products, manufacturing of
gas cookers, electrical household appliances and their related products, and manufacturing of
enamel products. The Company operates in two business segments: home appliances, which
include manufacturing and dealing in household appliances and their related products, and
others, which is engaged in investment holding and provision of management services.
Principle Activities Milux Corporation Berhad is through its subsidiaries, manufactures and
markets gas cookers, enamel products, electrical household appliances, and related products
in Malaysia and Indonesia. It offers table-top gas cookers, cast-iron burners, built-in hobs,
oven toasters, gas ignition valves, and regulators, as well as electrical household appliances
comprising slow cookers, bread toasters, hand mixers, blenders, air pots, irons, and hair
dryers. The company also engages in manufacturing and retailing ice cream, creameries, and
snack bars, as well as in property development. It exports its products to Asia, South
America, the Middle East, and Africa.
The company was formerly known as T.H. Hin Corporation Berhad and changed its name to
Milux Corporation Berhad in 2006. Milux Corporation is based in Petaling Jaya, Malaysia.
ince its inception in 1977, Milux has always sought to provide top quality and innovative
products which are in line with the company's philosophies emphasizing "Quality, Safety and
Reliability". As one of the top distributors of household appliances, Milux are committed to
not just to delivering top quality products, but also to continue delivering excellent customer
service to better serve our customers.
2.2.1 INCOME STATEMENT & BALANCE SHEET MILUX COORPORATION
BERHAD
MILUX COORPORATION BERHAD
Income Statement for the year ended 31 December 2015
Sales/Revenue 69,889.6
Cost of Goods Sold (COGS) incl. D&A 55,885.7
COGS excluding D&A 54,318.0
Depreciation & Amortization Expense 1,567.7
Depreciation 1,491.8
Amortization of Intangibles 76.0
Gross Income 14,003.8
SG&A Expense 13,525.4
Other SG&A 13,525.4
Other Operating Expense 330.1
EBIT 148.3
Unusual Expense 182.7
Non-Operating Income/Expense 1,626.9
Non-Operating Interest Income 214.7
Interest Expense 219.8
Gross Interest Expense 219.8
Pre-tax Income 1,587.4
Income Tax 1,263.9
Income Tax - Current Domestic 1,504.5
Income Tax - Deferred Domestic (240.6)
Consolidated Net Income 323.5
Net Income 323.5
extraordinariness & Discontinued Operations -
Discontinued Operations -
Net Income After extraordinariness 323.5
Net Income Available to Common 323.5
EPS (Basic) 0.01
Basic Shares Outstanding 54,411.3
EPS (Diluted) 0.01
Diluted Shares Outstanding 54,411.3
EBITDA 1,716.1
EBIT 148.3
MILUX COORPORATION BERHAD
Balance Sheet as at 31 December 2015
ASSETS
Cash & Short Term Investments 11,469.7
Cash Only 6,331.4
Short-Term Investments 5,138.3
Total Accounts Receivable 16,552.6
Accounts Receivables, Net 15,071.4
Accounts Receivables, Gross 15,682.6
Bad Debt/Doubtful Accounts (611.2)
Other Receivables 1,481.2
Inventories 22,098.6
Finished Goods 12,042.1
Work in Progress 1,302.2
Raw Materials 8,754.4
Progress Payments & Other -
Other Current Assets 976.7
Prepaid Expenses 725.0
Miscellaneous Current Assets 251.6
Total Current Assets 51,097.6
Net Property, Plant & Equipment 7,994.6
Property, Plant & Equipment Gross 25,362.6
Buildings 6,056.7
Land & Improvements -
Construction in Progress -
Leases 2,163.0
Accumulated Depreciation 17,368.0
Buildings 2,848.7
Total Investments and Advances 417.8
Other Long-Term Investments 417.8
Intangible Assets 782.2
Net Goodwill 782.2
Net Other Intangibles -
Other Assets -
Tangible Other Assets -
Total Assets 60,996.0
LIABILITIES & SHAREHOLDERS' EQUITY

ST Debt & Current Portion LT Debt 3,298.7
Short Term Debt 3,139.0
Current Portion of Long Term Debt 159.7

Accounts Payable 5,067.0
Income Tax Payable 787.6
Other Current Liabilities 2,954.9

Miscellaneous Current Liabilities 2,954.9
Total Current Liabilities 12,108.2
Long-Term Debt 125.5
Long-Term Debt excl. Capitalized Leases -
Non-Convertible Debt -
Capitalized Lease Obligations 125.5

Deferred Taxes 7.5
Deferred Taxes Credit 711.3
Deferred Taxes Debit 703.8

Other Liabilities (excl. Deferred Income) 0.0
Total Liabilities 12,945.1

Non-Equity Reserves -
Common Equity (Total) 48,050.9
Common Stock Par/Carry Value 54,411.3
Additional Paid-In Capital/Capital Surplus 1,173.1

Retained Earnings (7,535.5)
Unrealized Gain/Loss Marketable Securities 2.0
Revaluation Reserves -
Total Shareholders' Equity 48,050.9
Accumulated Minority Interest 0.0
Total Equity 48,050.9

rttgfcv3.0 FORMULA FOR RATIO ANALYSIS
I used different types of formula for calculation of different kinds of ratio. We collect some
formula from the book of Intermediate Accounting by Kieso, Weygandt,
Warfield(2001).We also collect some data from Accounting Principles by Weygandt, J. J,
Kieso, D. E, & Kell, W. G. (1996). So formula is the most important thing for our thesis
without formula we cant calculation the ratio analysis and we dont measurement of
performance evaluation of electrical and electronics appliances. There are several formulas
revealing each of the five aspects of performance evaluation and financial condition
and short discuss about as follow as;
Liquidity ratio:
Current Ratio = Current assets /Current liabilities
Quick Ratio= (Current Assets-Inventories)/Current Liabilities
Cash Ratio = Cash / Current Liabilities
Asset management ratios:
Accounts receivable turnover = Sales / Accounts receivable
Average collection period = 360 days / Accounts receivable turnover
Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory
Accounts Payable turnover = Sales / Accounts Payable
Accounts Payable turnover in days = 360 / Accounts Payable turnover
Fixed asset turnover = Sales / Net fixed asset
Total asset turnover = Sales / Total asset

Profitability Ratio:
Net Profit margin = Net profit after tax/sales
Net Profit margin ratio= Gross profit/sales
Return on Total Assets = Net profits after taxes / total assets
Return on common stock equity=Net income / Common stockholders equity
Operating Profit Margin = Operating profits / Sales
Debt coverage ratio:
Debt Ratio =Total liabilities / Total assets
Time interest earned = EBIT / Interest charged
Book value per share = Common stockholders equity /Outstanding shares
Market value ratios:
Earnings per share ratio = Net income /weighted average number of share outstanding
Market/Book ratio= Market price per share/Book value per share

4.0 RESULTS AND ANALYSIS
4.1 CALCULATION RATIO FOR KHIND HOLDING BHD
4.1.1 Liquidity ratio

=RM 186,682/102,814
=1.82
Quick Ratio = (Current Assets-Inventories)/Current Liabilities
= RM (186,682 79,157)/ 102,814
=1.05
=RM 38,937.0/102,814.0
=0.38
4.1.2 Asset management ratios

= RM 337,768.00/654,34.00
=5.16
= 360 / 5.16
= 69.77
= RM 230,064/79,157
= 2.91
=RM 337,768/15,030
=22.47
=360 / 22.47
=16.02
= RM 337,768/122,168
= 2.76
= RM 337,768/ 258,455
=1.32
4.1.3 Profitability Ratio

= RM 6,180/337,768
=0.018
Gross Profit margin ratio= Gross profit/sales
=RM 107,704/337,768
=0.3189 @ 31.89%
= RM 6,180/ 258,455
= 0.0239 @ 2.39%
Return on common stock equity = Net income / Common stockholders equity
= RM 6,180 / 122,168
= 0.05061 @ 5.06%
= RM 10,076/ 337,768
=0.0298
4.1.4 Debt coverage ratio

= RM 136,287/258,455
` =0.527 @ 52.7%
= RM 10,076/3,460
=2.912
4.15 Market value ratios

= RM 6,180/40,059
= 0.15
4.2 CALCULATION RATIO FOR MILUX CORPORATION BHD
4.2.1 Liquidity ratio

=RM 51,097.6 /12,108.2
= 4.22
Quick Ratio = (Current Assets-Inventories)/Current Liabilities
= RM (51,097.6 22,098.6)/12,108.2
=2.39
= RM 11,469.7/12,108.2
= 0.95
4.2.2 Asset management ratios

= RM 69,889.6/16,552.6
=4.22
=360 /4.22
=85.31
=RM 55,885.7 /22,098.6
= 2.53
= RM 69889.6/5,067.0
= 13.79
= 360/ 13.79
=26.106
= RM 69,889.6 /48,050.9
=1.45
= RM 69,889.6/60,996.0
=1.146
4.2.3 Profitability Ratio

= RM 323.5/69,889.6
=0.0046 @ 0.46%
Gross Profit margin ratio= Gross profit/sales
= RM 14,003.8/69,889.6
=0.20
= RM 323.5/ 60,996.0
= 0.0053 @ 0.53%
Return on common stock equity = Net income / Common stockholders equity
= RM 323.5/48,050.9
=0.0067 @ 0.67
=RM 148.3/69,889.6
=0.00212
4.2.4 Debt coverage ratio

= RM 12,945.1/60,996.0
=0.212 @ 21.2%
= RM148.3/219.8
=0.67
4.2.5 Market value ratios

= RM 323.5/54,411.3
= 0.01
4.3 ANALYSIS RATIO KHIND HOLDING AND MILUX CORPORATION
4.3.1 LIQUIDITY RATIO ANALYSIS

Liquidity ratio refers to the ability of a company to interact its assets that is most readily
converted into cash. Assets are converted into cash in a short period of time that are concerns
to liquidity position. However, the ratio made the relationship between cash and current
liability.
The Liquidity ratio we can satisfy on the three ratios, those are:
1) Current ratio
2) Quick ratio or acid test
3) Cash Ratio
Current ratio
The current ratio is calculated by dividing current assets by current liabilities. Current asset
includes inventory, trade debtors, advances, deposits and repayment, investment in
marketable securities in short term loans, cash and cash equivalents, and current liabilities are
comprised short term banks loan, long term loans-current portion, trade creditors liabilities
for other finance etc. Generally current ratios are acceptable of short term creditors for any
company. The formula is shown as below;
KHIND HOLDING BHD = RM 186 682 /RM 102 814
=1.82
MILUX CORPORATION BHD=RM 51,097.6 /12,108.2
= 4.22
In this analysis, we can view that in 2015 the current ratios were 1.82 times in Khind Holding
SDN BHD. On the other hand, Milux Corporation the current ratio is 4.22. So we understand
that both electrical and electronics appliance companies are not good performing for current
ratio because their figure also showing that situation.
The current ratio can give the efficiency of a company's operating cycle. Besides that, if the
current ratio is lower than 1, the company should increase their current assets otherwise the
company will face the problem of cash flow. The current ratio of other two companies is
higher than 1, so they also have ability to paid their liabilities.
Quick ratio or acid test

Quick ratio or acid test ratio is estimating the current assets minus inventories then divide by
current liabilities. It is easily converted into cash at turn to their book values and it also
indicates the ability of a company to use its near cash.
The formula of quick ratio or acid test ratio are as follow as;
Quick ratio = (Current asset-inventories)/Current liabilities
KHIND HOLDING BHD = RM (186,682 79,157)/ 102,814
=1.05
MILUX CORPORATION BHD = RM (51,097.6 22,098.6)/12,108.2
=2.39
Analysis of this ratio, it is the different position of current ratio. In 2015, the quick ratio was
1.05 times of Khind Holding BHD Company and the Milux Corporation Bhd is 2.39 times.
Both of these ratios represent the idea that Milux has so far an almost constant liquidity
position which is good at some point, but the Khind too long for this reason is not good
liquidity position. So their profit margin may not so high. Finally in this ratio, we can state
that the Milux Corporation bhd is better liquidity position compare than the Khind holding
bhd.
Cash Ratio
The cash ratio is estimate to current liabilities into cash. It betoken the company can pay off it
current liabilities given year from its operation.(Kieso, Weygandt,Warfield ,2001).It is the
most famous ratio for realize the liquidity position of any company. Generally we know that
current ratio and quick ratio is not good way to analysis the liquidity position for a company
because it correspond of account receivable and inventory, which take time to convert to
cash. Finally we can express that the cash ratio gives a better result.
The formula of current ratio is below as;

KHIND HOLDING BHD = RM 38,937.0/102,814.0
=0.38
MILUX CORPORATION BHD = RM 11,469.7/12,108.2
= 0.95
In this ratio, we can analysis that the ratio has decrease few times in Khind Holding Bhd in
year 2014 and 2013.On contrast; Milux Corporation Bhd Company has increased few. For
this reason both companies are holding its cash, which is not good from investor points of
view. Current liabilities have increase for both companies. So those companies need increase
invest, thats way both company to get money for good return.
4.3.2 ASSET MANAGEMENT RATIO ANALYSIS
Asset management ratios are most notable ratio of the financial ratios analysis. It measure
how effectively a company uses and controls its assets. It is analysis how a company quickly
converted to cash or sale on their resources. It is also called Turnover ratio because it
indicates the asset converted or turnover into sales. Finally, we can recognize the company
can easily measurement their asset because this ratio made up between assets and sales.
Following are discussed seven types of asset management ratios:
1) Accounts receivable turnover
2) Average collection period
3) Inventory turnover
4) Accounts Payable turnover
5) Accounts Payable turnover in days
6) Fixed asset turnover
7) Total asset turnover

Accounts receivable turnover
The Accounts receivable turnover is comparison of the size of the company sales and
uncollected bills from customers. If any company is difficult to collect money so it has large
account receivable and also indicates the low ratio. Instead of, if any company aggressive
collection money so it has low receivable and also high ratio. This ratio measure the number
of times are collected during the period.
Account receivable turnover ratio formula is;

KHIND HOLDING BHD = RM 337,768.00/654,34.00
=5.16
=4.22
From this ratio analysis we acquire that the ratio of Khind Holding Bhd is higher than Milux
Corporation bhd. It means that Account receivable is increasing day by day which is very bad
position for company because it has make up a lot of cash money, for this reason the
company must be invested by other sector., So the higher turnover means that the company is
inefficient in managing its Account receivable .
Average collection period
The average collection period is refers the average number of days of the company. It
maintain the company to collection its credit policy. It has made good relationships between
account receivable and outstanding payment. It measures the average number of days
customers take to pay their bills to divide by account receivable turnover .The average
number of day also indicate the 360 days .
The equation of average collection period is following as;

KHIND HOLDING BHD =360 / 5.16
= 69.77
MILUX CORPORATION BHD =360 /4.22
=85.31
In this ratio, we can analysis that the ratio of Milux Corporation Bhd is a higher than Khind
Holding Bhd. And this show a low ratio stands up the company bad collection period and its
also indicating of low cash balance. The main aim of any company should be increase sale
otherwise the company doesnt increasing receivable because it makes up the cash balance. If
any company fails to increase the sale those company ultimately loss. So both electrical and
electronic appliance companies must be increase the average collected ton period other those
companies is loss.
Inventory turnover ratio
The inventory turnover ratio measures the number of times on average the inventory was sold
during the period (Kieso, Weygandt, Warfield, 2001).The ratio is calculate the cost of goods
sold by divide into average inventory. The measurement of average inventory is; at first we
are adding to years inventory after that we divide in to two. Inventory turnover ratio is also
known as inventory turns ratio and stock turnover ratio.
KHIND HOLDING BHD = RM 230,064/79,157
= 2.91
MILUX CORPORATION BHD = RM 55,885.7 /22,098.6
= 2.53
In this analysis we identify that the continuous improvement of inventory turnover ratio
through the years, here we understand that the cost of goods sold is increasing day by day as
well as the turnover is also increasing because the increasing rate of sales is higher than
average inventory. Generally it is important that they are holding much more inventory,
which has make up the cash balance. So we are confirms that both companies capture much
more inventory. It is the best position for both companies.
Accounts Payable turnover
The accounts payable turnover ratio is compute by account payable to sale. It measures the
tendency of a company credit policy whether extend account payable or not.
The account payable turnover ratio equation are as follow as;
=22.47
MILUX CORPORATION BHD = RM 69889.6/5,067.0
= 13.79
Analysis shows that there is opposite in Accounts receivable turnover. Here, in Khind
Holding Bhd is the higher ratio than Milux Corporation Bhd. It signals that the company
maintains a low accounts payable. So we can say that the company pays their accounts
payable immediately. As a result there is a low balance of cash As result we confirm that the
Milux Corporation Bhd Company is good condition compare than Khind Holding Bhd
company. The higher ratio shows suppliers and creditors that the company pays its bills
frequently and regularly. It also implies that new vendors will get paid back quickly. A high
turnover ratio can be used to negotiate favourable credit terms in the future.
Accounts Payable turnover in days
Accounts Payable turnover in days is represent that the number of days of a company to pay
their liability to their creditor. If any company number of days is more then the company is
stretching account payable otherwise the company is not holding their account payable. It
evaluates the account payable turnover by exchange into 360 days.
Accounts Payable turnover in days = 360 days / Accounts Payable turnover
KHIND HOLDING BHD = RM 360 / 22.47
=16.02
MILUX CORPORATION BHD = 360/ 13.79
=26.106
From this analysis it can be express that the Milux Corporation bhd company has higher
account payable turnover than a Khind Holding Bhd .It betoken that the account payable is
standard position .Conversely, the Khind Holding Bhd also still category high but not more
then so those company changed their creditor policy and tried to pay the payable as possible
as to increase current liability.
Fixed asset turnover ratio
Fixed asset turnover ratio is the sales to the value of fixed assets of the company. It determine
the effectiveness in generating net sales revenue from investments in net property, plant, and
equipment back into the company evaluates only the investments.
= 2.76
MILUX CORPORATION BHD = RM 69,889.6 /48,050.9
=1.45
In this ratio i see that the fixed asset turnover ratio was as high as 2.76 times in Khind
Holding Bhd compare as Milux Corporation Bhd. I mention that the balance sheet shows that
large amount of investments were made during that year that inflate the money volume of
fixed assets, and give an impression of mismanagement.
Total asset turnover ratio
The total asset turnover ratio measures the ability of a company to use its assets to generate
sales.(Kieso, Weygandt, Warfield ,2001).It considers all assets including property ,plant and
equipment, capital working in process, investment long term, inventories, trade debtors,
advances, deposit and prepayment, investment in market securities, short term loan, cash and
cash equivalents etc. In these criteria a high ratio means the company is achieving more
profit. The formula is following as:
KHIND HOLDING BHD = RM 337,768/ 258,455
=1.32
=1.146
Analysis of This ratio is measures how efficiently a firm uses its assets to generate sales, so a
higher ratio is always more favourable is a Milux Corporation Bhd. Higher turnover ratios
mean the company is using its assets more efficiently. And the Lower ratios are Khind
Holding Bhd mean that the company isn't using its assets efficiently and most likely have
management or production problems. For instance, this ratio of 1 means that the net sales of
the company equal the average total assets for the year.
4.3.3 PROFITABILITY RATIO
Profitability ratios designate a company's overall efficiency and performance. It measures the
company how to use of its assets and control of its expenses to generate an acceptable rate of
return. It also used to examine how well the company is operating or how well current
performance compares to past records of both electrical and electronics appliances company.
There are five important profitability ratios that we are going to analyse:
1. Net Profit Margin
2. Gross Profit Margin
3. Return on Asset
4. Return on Equity
5. Operating profit margin
Net Profit Margin

The net profit margin is determined of net profit after tax to net sales. It argues that how
much of sales are changeover after al expense .The higher net profit margins are the better for
any electrical and electronics appliances company.
Net Profit margin = Net profit after tax/sales*100
KHIND HOLDING BHD = 6,180/337,768
=0.018
=0.0046 @ 0.46%
In this analysis we see that the net profit margin is measures how successful a company has
been at the business of marking a profit on each sale. It is one of the most essential financial
ratios. Net margin includes all the factors that influence profitability whether under
management control or not. The higher the ratio, the more effective a company is at cost
control so that the Milux Corporation is more effective than Khind.
Gross Profit Margin ratio
Gross margin express of the company efficiency of raw material and labor during the
working process .If any company higher gross profit margin then the company more
efficiency to controls their raw material and labors. So it is most important for performance
evaluation of electrical and electronics appliances company. It can be assigned to single
products or an entire company. It determines the gross profit to divide by net sales. The gross
profit margin ratio formula as following as;
Gross profit margin ratio= Gross profit/sales*100
=0.3189 @ 31.89%
=0.20
The gross profit margin has slightly the higher is Khind Holding Bhd which 31.89%, the
company with high gross margin ratios mean that the company will have more money to pay
operating expenses like salaries, utilities, and rent. Since this ratio measures the profits from
selling inventory, it also measures the percentage of sales that can be used to help fund other
parts of the business. And the Milux Corporation should to increase gross profit margin they
should try to decrease their cost of goods sold.
Return on asset ratio
The Return on Assets ratio can be directly computed by dividing net income by average total
asset. (Kieso, Weygandt, Warfield, 2001).It finds out the ability of the company to utilize
their assets and also measure of efficiency of the company in generating profits.
Return on Total Assets = Net profits after taxes / total assets*100
= 0.0239 @ 2.39%
MILUX CORPORATION BHD = RM 323.5/ 60,996.0
= 0.0053 @ 0.53%
From this ROA ratio, I can state that Khind Holding Bhd is a more profitable than a Milux
Corporation Bhd, thus higher values of return on assets show that business is more profitable.
The reason for this is that companies in some industries are most asset. Their ROA will
naturally be lower than the ROA of companies which are low asset-insensitive. An increasing
trend of ROA indicates that the profitability of the company is improving. Conversely, a
decreasing trend means that profitability is deteriorating.
Return on Equity
Return on Equity is compute by dividing net income less preferred dividend by average
company stockholder equity. It demonstrate how a company to generate earnings growth for
using investment fund. It has some alternative name such Return on average common equity,
return on net worth, Return on ordinary shareholders' fund.
Return on common stock equity = Net income / Common stockholders equity*100
KHIND HOLDING BHD = RM 6,180 / 122,168
= 0.05061 @ 5.06%
MILUX CORPORATION BHD = = RM 323.5/48,050.9
=0.0067 @ 0.67
The analysis in Return on equity is an important measure of the profitability of a company.

The Higher values which are Khind Holding generally favourable meaning that the company
is efficient in generating income on new investment. Investors should compare the ROE of
different companies and also check the trend in ROE over time. However, relying solely on
ROE for investment decisions is not safe. It can be artificially influenced by the management,
for example, when debt financing is used to reduce share capital there will be an increase in
ROE even if income remains constant.
Operating profit margin ratio

The operating profit margin ratio recognizes of the percentage of sales to exchange into all
cost operating profit margin is calculated as follows:
Operating Profit Margin = Operating profits / Sales and expenses after remaining sales.
=0.0298
=0.00212In this analysis we find out the operating profit margin higher
is Khind Holding Bhd , which at the higher operating margin is more favourable compared
with a lower ratio because this shows that the company is making enough money from its on-
going operations to pay for its variable costs as well as its fixed costs.
4.3.4 DEBT COVERAGE RATIO
Debt Coverage Ratio measures the percentage of the total asset provided by creditor. (Kieso,
Weygandt, Warfield, 2001). If any company has realize their debt coverage ratio less than 1
then the company understand their income greater by a property is insufficient to collect their
mortgage. So more than is 1 is best for any company.
The Debt-coverage ratio we can satisfy on the three ratios, those are:
1. Debt ratio.
2. Time interest earned.
3. Book value per share.
Debt ratio
Debt Ratio is laid out the percentage of a company total asset the change into total debt. It is
the most important financial ratio for performance evaluation of any electrical and a
company. The ratio is calculated as follows:
Debt Ratio =Total liabilities / Total assets*100
` =0.527 @ 52.7%
=0.212 @ 21.2%
In this analysis, I can conclude that a lower debt is Milux Corporation Bhd which usually
implies a more financially stable business. Companies with a higher debt to equity ratio
which is Khind Holding Bhd are considered more risky to creditors and investors than
companies with a lower ratio.
Time interest earned ratio
The time interest earned ratio indicates the companys ability to meet interest payment as
they come due.( Kieso,Weygandt, Warfield ,2001). It is reckon by dividing their earnings
before interest tax by the interest charged. It has corroborated that the company able to pay its
annual cost because this ratio denote the annual interest charged for any company
Time interest earned = Earnings before interest tax / Interest charged
=2.912
MILUX CORPORATION BHD = RM148.3/219.8
=0.67
In this dissuasion I realize that the higher ratio of time interest earned, it indicated the
Company has higher ability to pay the interest from their opportunity income. So, higher
decline of this ratio is Khind Holding Bhd those indicated that the company is paying more
interest. Nevertheless, the Milux Corporation Bhd is not paying more interest because that
company has no decline from last year for that reason we think those company has best
condition for time interest earned
5.0 REFERENCE

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Contents

1.0 DEFINITION OF RATIO ANALYSIS ............................................................................................ 2

2.0 INTRODUCTION ............................................................................................................................ 4

2.2.1 INCOME STATEMENT & BALANCE SHEET MILUX COORPORATION BERHAD 10

4.1.1 Liquidity ratio ...................................................................................................................... 15

4.2.1 Liquidity ratio ...................................................................................................................... 18

4.3.1 LIQUIDITY RATIO ANALYSIS ....................................................................................... 21

Helpful in evaluating solvency

Better financial analysis

Fiscal year is January-December. All values MYR Thousands. 2015

LIABILITIES & SHAREHOLDERS' EQUITY

Milux Corporation Berhad (Milux), it is a Malaysia-based investment holding company. The

LIABILITIES & SHAREHOLDERS' EQUITY

Current Portion of Long Term Debt 159.7

Other Current Liabilities 2,954.9

Capitalized Lease Obligations 125.5

Deferred Taxes Debit 703.8

Total Liabilities 12,945.1

Common Stock Par/Carry Value 54,411.3

Additional Paid-In Capital/Capital Surplus 1,173.1

Total Equity 48,050.9

Current Ratio = Current assets /Current liabilities

Quick Ratio= (Current Assets-Inventories)/Current Liabilities

Cash Ratio = Cash / Current Liabilities

Asset management ratios:

Accounts receivable turnover = Sales / Accounts receivable

Average collection period = 360 days / Accounts receivable turnover

Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory

Accounts Payable turnover = Sales / Accounts Payable

Accounts Payable turnover in days = 360 / Accounts Payable turnover

Fixed asset turnover = Sales / Net fixed asset

Total asset turnover = Sales / Total asset

Net Profit margin = Net profit after tax/sales

Net Profit margin ratio= Gross profit/sales

Return on Total Assets = Net profits after taxes / total assets

Return on common stock equity=Net income / Common stockholders equity

Operating Profit Margin = Operating profits / Sales

Debt coverage ratio:

Debt Ratio =Total liabilities / Total assets

Time interest earned = EBIT / Interest charged

Book value per share = Common stockholders equity /Outstanding shares

Market value ratios:

Market/Book ratio= Market price per share/Book value per share

4.1 CALCULATION RATIO FOR KHIND HOLDING BHD

4.1.1 Liquidity ratio

Quick Ratio = (Current Assets-Inventories)/Current Liabilities

= RM (186,682 79,157)/ 102,814

Cash Ratio = Cash / Current Liabilities

4.1.2 Asset management ratios

Average collection period = 360 days / Accounts receivable turnover

Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory

Accounts Payable turnover in days = 360 / Accounts Payable turnover

Fixed asset turnover = Sales / Net fixed asset

Total asset turnover = Sales / Total asset

4.1.3 Profitability Ratio

Gross Profit margin ratio= Gross profit/sales

Return on Total Assets = Net profits after taxes / total assets

Operating Profit Margin = Operating profits / Sales

4.1.4 Debt coverage ratio

Time interest earned = EBIT / Interest charged

4.15 Market value ratios

4.2.1 Liquidity ratio

=RM 51,097.6 /12,108.2