Ratio Analysis: Hup Seng Industries Berhad
Liquidity Ratios
Current ratio
FORMULA 2012 (31 DEC) 2013 (31 DEC)
Current ratio
= Current assets/ Current liabilities 137, 802, 520/43, 748, 011
= 3.15 times 140, 114, 822/ 47, 097, 947
= 2.98 times
The current ratio is measured the ability to pay its liabilities in the short term. The higher current ratio, the company would be able paying its debt. The current ratio of Hup Seng Industries Berhad in 2012 is 3.15 times. Both current assets and current liabilities of Hup Seng Industries Berhad increase during year 2013 causes the current ratio decrease to 2.98 times, compare to year 2012 there is a decrease in the current ratio by 0.17 times.
The current ratio in 2012 and 2013 of the company can give a sense of the efficiency of the …show more content…
It shows that the acid-test ratio of the company decrease by 0.13 times from 2012 to 2013. After minus out the inventories of both years we will be able to get a more accurate liquidity ratio for both years.
The acid-test ratio in 2012 and 2013 is more than one that means current assets are highly contingent on inventory. The company is ability to pay the current liability. The ratio in 2012 is more than 2013, the company is not liquid assets to cover the immediate debt in 2013. Activity Ratios
Assets turnover
FORMULA 2012 (31 DEC) 2013 (31 DEC)
Assets turnover
=Revenue/
(Total assets- Current liabilities) 247,818,145/(204,947,578 – 43,748,011)= 1.54 times 251,407,055/(205,202,821 – 47,087,947)= 1.59 …show more content…
It is because company does not overspend for buying inventory and waste resources by storing non-stable. The ratio is decrease that mean is a good situation to attract people to invest the company.
Profitability Ratios
Net profit margin
FORMULA 2012 (31 DEC) 2013 (31 DEC)
Net profit margin
= Net profit / Sales (32,540,686/ 247,818,145)*100
=13.13 % (36,744,846/ 251,407,055)*100
= 14.62 %
It is net income divided by revenues, or net profits divided by sales. It measures how much sales a company actually keeps in earning. The net profit margin for Hup Seng Industries Berhad in year 2012 is 13.13% while in year 2013 the profit margin increase to 14.62%. There is an increase of 1.49% of net profit margin throughout the one year time causes by the increase of profit and sales of the company. If company has costs that have grows up at greater rate than sales, it cause a lower margin. This is an indication that costs need to be under better control. The net profit in 2013 is increase that means the profitability is increase.
Return on asset
FORMULA 2012 (31 DEC) 2013 (31 DEC)
Return on asset
= Net profit / Total assets (32,540,686/204,947,578)*100
=15.88 % (36,744,846/205,202,821)*100
=17.91
Current ratio
FORMULA 2012 (31 DEC) 2013 (31 DEC)
Current ratio
= Current assets/ Current liabilities 137, 802, 520/43, 748, 011
= 3.15 times 140, 114, 822/ 47, 097, 947
= 2.98 times
The current ratio is measured the ability to pay its liabilities in the short term. The higher current ratio, the company would be able paying its debt. The current ratio of Hup Seng Industries Berhad in 2012 is 3.15 times. Both current assets and current liabilities of Hup Seng Industries Berhad increase during year 2013 causes the current ratio decrease to 2.98 times, compare to year 2012 there is a decrease in the current ratio by 0.17 times.
The current ratio in 2012 and 2013 of the company can give a sense of the efficiency of the …show more content…
It shows that the acid-test ratio of the company decrease by 0.13 times from 2012 to 2013. After minus out the inventories of both years we will be able to get a more accurate liquidity ratio for both years.
The acid-test ratio in 2012 and 2013 is more than one that means current assets are highly contingent on inventory. The company is ability to pay the current liability. The ratio in 2012 is more than 2013, the company is not liquid assets to cover the immediate debt in 2013. Activity Ratios
Assets turnover
FORMULA 2012 (31 DEC) 2013 (31 DEC)
Assets turnover
=Revenue/
(Total assets- Current liabilities) 247,818,145/(204,947,578 – 43,748,011)= 1.54 times 251,407,055/(205,202,821 – 47,087,947)= 1.59 …show more content…
It is because company does not overspend for buying inventory and waste resources by storing non-stable. The ratio is decrease that mean is a good situation to attract people to invest the company.
Profitability Ratios
Net profit margin
FORMULA 2012 (31 DEC) 2013 (31 DEC)
Net profit margin
= Net profit / Sales (32,540,686/ 247,818,145)*100
=13.13 % (36,744,846/ 251,407,055)*100
= 14.62 %
It is net income divided by revenues, or net profits divided by sales. It measures how much sales a company actually keeps in earning. The net profit margin for Hup Seng Industries Berhad in year 2012 is 13.13% while in year 2013 the profit margin increase to 14.62%. There is an increase of 1.49% of net profit margin throughout the one year time causes by the increase of profit and sales of the company. If company has costs that have grows up at greater rate than sales, it cause a lower margin. This is an indication that costs need to be under better control. The net profit in 2013 is increase that means the profitability is increase.
Return on asset
FORMULA 2012 (31 DEC) 2013 (31 DEC)
Return on asset
= Net profit / Total assets (32,540,686/204,947,578)*100
=15.88 % (36,744,846/205,202,821)*100
=17.91