I-POWER BERHAD

8/7/2019 I-POWER BERHAD

http://slidepdf.com/reader/full/i-power-berhad 1/28

UNIVERSITY TENAGA NASIONAL

SULTAN HAJI AHMAD SHAH CAMPUS BANDAR MUADZAM SHAH

I-POWER BERHAD

FICB223

FINANCIAL STATEMENT ANALYSIS

SEM 1 2010/2011

SUBMITTED TO: MADAM.SUZAIDA BTE BAKAR

DOH SIEW FONG BF 083978 1AM

KHAIRULBARIAH BINTI RAMLI BF 083205 1BM

NAZLYN STELLA ANAK SA-EK BF 083220 1BM

SITI AISYA AZYANI BT MOHD ZAHARI BF 083242 2BM



CONTENT

A. Executive summary

B. Background of the company

C. Ratio Calculation

• Short-term liquidity

Current ratio

Acid test (quick) ratio

Account receivable turnover

Cash flow ratio

• Capital structure and solvency

Total debt ratio

Total debt to equity capital

Long term to equity capital

Altman Z-score

Smith Z-score

• Profitability analysis

Net profit margin

Total asset turnover

Return on equity

Net operating profit margin



• Equity analysis

Earning yield

Price/ earnings ratio

Percentage of earning retained

D. Graphical analysis

E. Conclusion and recommendation

F. References

G. Appendix

EXCECUTIVE SUMMARY

The main aim for this research paper is to measure the performance of theorganization which we have chosen, the I-POWER BHD based on several areas

which determine the financial strength of the organization. The task of this study is to

finalize whether or not it is a good company to invest in, by using the elements

provided by the financial statements.

We begin with our collection of financial statements from the annual reports

of the organization for five consecutive years, 2005 until 2009. From which, we have

chosen 4 different areas which are; Short-term liquidity, solvency, profitability and

the equity analyses. Each of these areas we are required to gather at least three ratios

in order to be more precise on our findings and the ratios which we have chosen

cannot be any more detailed. As for the equity analysis, we had to look for the market

prices of the organization through the websites listed in the references, in search for

historic prices.

Graphical analyses were constructed for the convenience of illustrating,

together with the definitions and contributions of the ratios would be to the



organization. With our findings and fundamental analyses of calculations of the

ratios, we also provided relevant announcements, news and events accordingly to the

ratios, which can be referred to as technical analysis, to extricate any financial doubts

and to encourage a better understanding of the financial data. Also, important and

essential financial data were collected from the financial statements for five years,

relevant only to the ratios we selected, for a much better observation rather than

viewing the annual reports. As for the detailed calculations, they are attached in the

appendices at the end of this research paper, together with only relevant financial

statements.

Lastly, we provide suggestions whether or not this organization should invest

more in other business-related opportunities and if the financial performance of this

organization is increasing at a rapid pace. Based on the results of the ratios, we

provide promising and guaranteed views to investors based on the fundamental and

technical analyses, if the organization is worth investing in.

A. BACKGROUND OF COMPANY

I-POWER BERHAD

I-Power is a system integrator and e-Business solution provider with a passion

to deliver first class e-business solutions to your total satisfaction.

I-Power is a MSC status company and an IBM Premier Business Partner. Our e-Store, eHR, eCRM, and ePOS solutions are also certified by SAP as powered by

NetWeaver. We are also the first company in Malaysia to be certified as an IBM

eBusiness Certified Business Partner.

I-Power being a niche player in system integration and e-business solutions

development, takes great pride in providing world class Internet solutions and system

integration services to the corporate world.



The company has established a solid reputation for building solutions that are

user friendly, quick to deploy, and customizable to meet your specific business needs.

At I-Power, we guarantee all our solutions, and walk the extra mile to deliver at all

times customer and service excellence.

We are committed to support the global industry by:

Developing professional and value added services in response to the changing

needs of the business industry.

Setting the standard for computer-assisted data analysis by incorporating

continuous research & customer feedback.

Working closely with customers, professional organizations and partnering

with industry leaders.

We endeavour to develop lasting relationships with our customers by

providing application and consulting services of the highest quality. We strive to

demonstrate integrity in all facets of our operation and believe that what is best for

the client is best for us.

Our goal is to provide our customers with services appropriate to their needs

with a high level of expertise and dedication. With our combined years of practical

experience, we will assist our customers in the selection of software and hardware

that best suits their requirements and budgets.

THE BUSINESS MODEL :

Sound management fundamentals.

Strategic alliances with its business partners

Solid business track record

VISSION

To become Malaysia leading e-Business Solution Specialist and be well-recognized

internationally with I-Power on demand E-Solution that are completely priced with

world class standards, competing with the best in the global arena.

MISSION

Our mission is to empower business enterprises to access online information anytime,

anywhere, and to connect critical business systems directly to customers, employees



and trading partners via the Web with the aim of achieving the following business

objectives:

• Improve time to market.

• Reduce cost of reaching and serving customers and trading partners.

• Extend and reach new global market.

• Enhance business processes.

• Improve business efficiency.

• Increase competitive edge through enhanced customer service and support

At I-Power Bhd, we supply enterprises with the best business solutions that

integrate your business environment. You can improve and streamline your business

with the help of I-Power as we use IBM’s and I-Power’s technology to provide the

core engine of our solutions. I-Power is a forefront business solution provider in

Malaysia that specializes in e-Business Solutions, Turnkey Applications, Workflow

Management, Knowledge Management, Business Intelligence, Systems Integration,

Consultancy and Services

CONTENTS

Every organization in the world today depends on their financial statements

and according to their analysis based on those financial statements, theseorganizations take the opportunities to make any financial changes due to certain

restricted or non-restricted obligations. Financial statement analysis, which is an

integral and important part of the broader field of business analysis, includes

analyzing a company’s business environment, its strategies and its financial standing

and performance. It is useful to make business decisions such as whether to invest in

equity or in debt securities, whether to extend credit through short or long term loans,

how to value a business in an initial public offering, and how to evaluaterestructurings including mergers, acquisitions and divestitures.



SHORT TERM LIQUIDITY

B. RATIO CALCULATION



CAPITAL STRUCTURE AND SOLVENCY

Ratio 2009 2008 2007 2006

Current Ratio

Current Asset

Current Liability

85,802,0402,020,347= 42.47

92,074,455929,277= 99.08

61,753,09918,353,896

= 3.36

13,504,118481,317

= 28.06

Quick Ratio

Cash & Cash

Equivalent +

Marketable

Security +Account

Receivable

Current Liability

(8,663,721

+15,470,732+ 756,343)

2,020,347

=24,890,796

2,020,347= 12.32

(26,572,142+

21,494,985+

1,068,633)929,27

7

=49,135,760

929,277= 52.88

(32,009,703 +

28,317,988+

1,425,408)18,353,896

=61,753,099

18,353,896= 3.36

(4,291,614+

9,212,504+ 143,981)

481,317

=3,648,099

481,317=28.36

Account

Receivable

Turnover

Net Sales

Average

Receivable

25,847,000

(15,470,732

+ 756,343)= 1.59

83,320,097(21,494,985

+1,068,633)= 3.69

57,840,393

(28,317,988

+1,425,408)= 1.94

18,297,815(9,212,504+ 143,981)

= 1.96

Cash Flow

Ratio

Operating Cash

Flow

Current Liability

9,418,972

2,020,347= 4.66

37,686,661

929,277= 40.55

10,128,461

18,353,896= 0.55

2,878,232

481,317= 5.98



Ratio Year

2009 2008 2007 2006

Total debt

ratio

Total debt /

total capital

2020347

122886284=0.016

929277

124428078=0.0074

18353896

67829680=0.27

481317

20581697=0.023

Total debt to

equity capital

Total debt/

total equity to

capital

2020347

120865937

=0.017

929277

123498801

=0.0075

18353896

49475784

=0.371

481317

20100380

=0.024

Long term

debt to equity

capital

Long term

debt/ total

equity capital

141124

120865937

=0.0011

126521

123498801

=0.0010

68500

49475784

=0.0014

69500

20100380

=0.0025



Altman’s Z-score

Z= 0.717X1 + 0.847X2 + 3.107X3 + 0.420X4 + 0.998X5

X1 = working capital / total assets

X2 = retained earnings / total assets

X3 = earnings before interest and taxes/ total assets

X4 = shareholders’ equity / total liabilities

X5 = sales/ total assets

X1

81761346

122886284

=0.67

90215901

124428078

=0.73

25045307

67829680

=0.37

125414884

20581697

=0.61

X2

29611960

122886284

=0.24

29553083

124428078

=0.24

17086517

67829680

=0.25

49475784

20581697

=2.40

X3

82123

122886284

=0.0006

12514339

124428078

=0.10

10233675

67829680

=0.15

7197032

20581697

=0.35

X4120865937

122886284

=0.983

123498801

124428078

=0.992

49475784

67829680

=0.729

20100380

20581697

=0.976

X5

25847000

122886284

=0.21

83320097

124428078

=0.67

57840393

67829680

=0.85

155,866

20581697

=0.89

Altman’s Z-

score

0.9428 1.7246 1.8958 4.5227



Z<1.20 implies a high probability of bankruptcy

Z>2.90 implies a low probability of bankruptcy

1.20<Z<2.90 implies ambiguous area

Smith’s Z-score

Z = -0.018 + 1.829X1 + 0.114 X2 – 0.080X3

Z = Value of the discriminant score

X1 = PBT (Profit before Tax) / Current Liabilities (profitability)

X2 = Current Assets / Current Liabilities (Liquidity)

X3 = Total Liabilities/ Total Assets (Gearing)

Z < 0 = distressed condition

Z > 0 = healthy condition

Ratio Year

2009 2008 2007 2006

X182123

2020347=0.041

12514339

929277=13.467

10233675

18353896=0.558

7197032

481317=14.953

X2837816932020347=41.469

91145178929277

=98.082

4339920318353896

=2.365

13022801481317=27.057

X3202034712886284

=0.016

929277124428078

=0.0075

1835389667829680

=0.270

48131720581697=0.0234

Smith’s Z-

score

4.78 35.79 1.25 30.41



PROFITABILITY ANALYSIS

Ratio 2009 2008 2007 2006

Net Profit

Margin

Net Income

Sales

58,877

25,847,000

= 0.00227

12,466,566

83,320,097

= 0.149

10,233,675

57,840,393

= 0.177

7,197,032

18,297,815

= 0.393

Total Asset

Turnover

Sales

Average

Total Asset

25,847,000

[(132,022,000+

124,428,078)/2]

25,847,000

123,725,039

= 0.2089

83,320,097

[(124,428,078 +

67,829,680)/2]

83,320,097

96,128,879

= 0.8667

57,840,393

[(67,829,680 +

20,581,697)/2]

57,840,393

44,205,688.50

= 1.3084

18,297,815

[(20,581,697+

13,268,397)/2]

18,297,815

16,925,047

= 1.0810

Return On

Total

Equity

Net Income

Total

Common

Equity

58,877

43,819,600

= 0.00134

12,466,566

43,819,600

= 0.284

10,233,675

21,279,800

= 0.481

7,197,032

6,300,000

= 1.142



EQUITY ANALYSIS

Ratio Years

2009 2008 2007 2006

Earning yield

Earnings per

share/ market price per share

0.01

0.10

=0.1

3.68

0.10

=36.8

5.80.10

=58

11.420.10

=114.2

Price /earnings

ratio

Market price of

the share/earnings

per share

0.100.01=10

0.103.68

=0.027

0.105.8

=0.0172

0.1011.42

=0.0008

Percentage of

earning retained

(%)

Net income-all

dividend/ net

income

58877-058877= 1

12466566-012466566

= 1

10233675-0

10233675= 1

7197032-07197032

= 1



C. GRAPHICAL ANALYSIS

Short-term liquidity

Liquidity is the ability to convert assets into cash or to obtain cash to meet

short-term obligations. Short-term is conventionally viewed as a period up to one

year, though it is identified with the normal operating cycle of a company (the time

period encompassing the buying-producing-selling-colleting cycle). The importance

of liquidity is best seen by considering repercussion stemming from a company’sinability to meet short-term obligations. It compares all the current assets of a

company to all the current liabilities.

CURRENT RATIO ANALYSIS

0

50

100

150

2006 2007 2008 2009

T m e s

Years

current ratio

Current ratio is current asset divide by current liabilities. The purpose is to

measures the liquid assets that provide a safety cushion to creditors and the liquid

reserve available to meet contingencies and the uncertainties surrounding a

company’s balance of cash flow.

Current ratio for I-POWER BHD for year 2006 is 28.06:1, 2007 is 3.36:1,

2008 is 99.08:1,and 2009 is 42.47:. In the year of 2008, I-POWER BHD has 99.08:1

of current assets for every single RM of current liabilities.

We can conclude that current assets is easy to convert into cash and available

to cover current liabilities. Company can decrease their current ratio by making



payoff of current liabilities. In the rules of thumb showed that the four year is an

inefficient use of resources reduced rate of return which it is >2:1.

ACID TEST RATIO ANALYSIS

0

20

40

60

2006 2007 2008 2009

m e s

year

Acid test ratio

A more stringent test of liquidity uses the acid-test (quick) ratio. There are

28.36:1 in year 2006, 3.36 in year 2007, 52.88 in year 2008 and 12.32:1 in year 2009.

This shows that, provided creditors and debtors are paid at approximately the

different time, a view might be made as to whether the business has sufficient liquid

resources to meet its current liabilities.

ACCOUNT RECEIVABLE TURNOVER

0

1

2

3

4

2006 2007 2008 2009

m e s

year

account

receivable

turnover

Account receivable turnover is measures the number of times account

receivables were collected during the year. It also measure of how well the company

collects sales on credit from its customers, just as average collection period measures

this in days. A high or increasing in accounts receivables turnover is usually a

positive sign and showing that company is successfully executing its credit policies

and quickly turning its account receivable into cash. So we can see that the account



receivable turnover ratio in year 2006 is 1.96:1, 2007 is 1.94:1, year 2008 is 3.69:1,

and year 2009 is 3.19:1. The high in account receivable turnover for year 2008 and

2009 has given the positive impact to the I-POWER BERHAD.

CAPITAL STRUCTURE AND SOLVENCY ANALYSIS

0

0.050.1

0.15

0.2

0.25

0.3

0.35

0.4

2006 2007 2008 2009

p e r c e n t a g e %

year

total debt ratio

total debt to equity

capital

long term debt to equity

capital

Capital structure refers to the sources of financing for a company. Financingcan range from relatively permanent equity capital to more risky or temporary short-

term financing sources. Once a company obtains financing, it subsequently invests it

in various assets. Assets represent secondary sources of security for lenders and range

from loans secured by specific assets to assets available as general security for

unsecured creditors. These and other factors yield different risks associated with

different assets and financing sources.

It is showed that positions of company are very well in 2006, which is 0.023,

0.0074 in 2008 and 0.016 in 2009. While in 2007, it showed a quite high the total

debt than total capital. The lowest the total debt ratio is the better, liabilities less,

asset more.

It also compared the company’s amount owed to creditor (total liabilities) to

the amount supplied by investors of the company (total shareholders’ equity), total

debt to equity capital. As we can see from the calculation is for the year 2006 to



2009 is 0.024:1, 0.371:1, 0.0075:1, 0.017:1, and 0.88:1 respectively. Total debt less

than shareholder showed that the company is solvency.

The long-term debt to equity capital is measures the relation of long-term

debt (usually defined as all non-current liabilities) to equity capital. A ratio in excess

of 1:1 indicates greater long-term debt financing compared to equity capital. This

ratio is commonly referred to as the debt to equity ratio and it is computed as long-

term debt / shareholders’ equity. For the year 2006, long term debt to shareholder

equity is 0.25 %, 0.14% in 2007, 0.1% in 2008 and 0.11% in 2009. We can conclude

that equity for the four years is higher than long term debt.

SMITH Z-SCORE

0

510

15

20

25

30

35

40

2006 2007 2008 2009

Smith Z-score

Smith Z-score is use to measure whether a company is a healthy or distressed

condition. From the graph above showed that I-POWER BERHAD is in a healthy

condition but in year 2007 it in verge of distress condition which Z is 1.25



ALTMAN’S Z-SCORE

0

1

2

3

4

5

2006 2007 2008 2009

t m e s

year

Altman's Z score is the tried and tested formula for bankruptcy prediction. It has

been demonstrated to be quite reliable in a variety of contexts and countries. It is not

designed to be used in every situation. Before using a Z score to make predictions,one must ensure the firm being examined is comparable to the database.

It is a fact that if the Z-Score of less than 1.20, it shows that the company is

most likely to witness a high probability of bankruptcy, and if the Z-Score shows a

value of more than 2.90, it implies a low probability of bankruptcy for the

organization. As for values between 1.20 and 2.90, they represent ambiguous area.

As we can see, in the year 2006, the organization implies a low probability of

bankruptcy, while in year 2007 and 2008, its show that organization is between the

range of zone of ignorance of bankrupt and non-bankrupt probability. In the year

2009 for the I-POWER BHD, the organization was on the verge of bankruptcy due to

the values for the years which show less than 1.20.

We can finalize that the organization has tried its best to maintain a financial

standing which impose situations where they avoid such risks of loss in year 2007 and

2008, but it cannot maintain in a long run until 2009.




Profitability refers to a company’s earnings relative to both the level and

source of financing and it is a measure of a company’s success in using financing to

generate profits. In the world of finance, the performance measures which are always

in common use are revenue, net income and asset growth. It is an important indicator

of a company’s long-term financial strength.

Return on invested capital can also be known as profitability. It allows

comparisons with alternative investment opportunities and it impacts a company’s

ability to succeed, attract financing, repay creditors and reward owners. Profitability

conveys return on invested capital from different financing perspectives and it allows

managers to conduct proper financing plans, budgets, activities co ordinations and

control.

I-POWER BHD studies on profitability area were finalized mainly using three

ratios and they are net profit margin, total asset turnover, and return on total

equity Those ratios would aid many parties especially the investors, to properly

analyze the organization’s financial performance, based on the observations of the

annual reports from the years 2005 to 2009.




We can conclude that even I-POWER BHD is a company in healthy condition

but it showed the company has an inefficient in management because the percentage

earned by shareholder for their investment are decrease from 2006 until 2009. Total

turnover increased from 2006 1.0810 to 1.3084 in 2007, but it decrease in the

following two years, that is 0.8667 and 0.2089 in 2008 and 2009 respectively.

EQUITY ANALYSIS

Equity analysis extends the analyses of financial statements to consider

earnings persistence, valuation and forecasting. Earnings persistence is defined to

include the stability, predictability, variability, and trend in earnings. The equity

valuation analysis emphasizes earnings and other accounting measures for computing

company value. The earnings forecasting considers earning power, estimation

techniques, and monitoring mechanisms. Equity basically refers to shareholders

financing and the analysis of this area involves analyzing equity characteristics which

include classifying and distinguishing different equity sources, examining rights for

equity classes and priorities in liquidation, evaluation legal restrictions for equity

distribution, reviewing restrictions on retained earnings distribution and lastly,

assessing terms and provisions of potential equity issuances.

PRICE / EARNING RATIO ANALYSIS

0.0008 0.01720.027

10

0

5

10

15

2006 2007 2008 2009

price / earning ratio

Price / earnings ratio is to expresses the relationship between the market

price of a share of common stock and that stock’s current earnings per share. High

price / earnings ratio means that the more market is willing to pay for the company’s

earnings or overpriced stock, as a gauge of future earning power of the firm.

Normally high growth opportunities showed by high price / earnings ratio. In year

2006 to 2009, it is showed lower growth opportunities, which is 0.0008 times in



2006, 0.0172 times in year 2007 and 0.027 times in 2008 than 10 times of growth

opportunities in 2009.

EARNING YIELD

114.2

58

36.8

0.1

0

20

4060

80

100

120

2006 2007 2008 2009

earning yield

Earning yield expresses the relationship between earnings and market price per share. It is the inverse of the price-earnings ratio. Basically, it is the earning

amount you buy for every dollar worth of stock.

In 2006, it is worth to buy for stock which you will earn 114.2% with every

ringgit. While, it shows a decreasing from 2007 onward, which in 2009, earn only 0.1

% with every ringgit.



D. CONCLUSION AND RECOMMENDATION

I-POWER BHD are being analysed in term of its capital structure, short term

liquidity, profitability analysis and equity analysis. We can conclude that the

company was not efficiently operated based on their performance. Current asset of

the company is easy to convert into cash quick and fast to create a new business

opportunity and it is a clear signal that a company pay its debts that are coming due in

the near future and still fund its ongoing operations. It also showed that the company

available to cover liabilities, while it is an inefficient use of resource reduced rate of

return.

I-POWER BHD was in healthy condition which showed by Smith Z-score in

every year is above zero. From Altman Z-score, it showed that the company is in low

probability for bankruptcy in 2006 but the company is in high probability for

bankruptcy in 2009, it is mean the creditors are not in well protected. The company

has an inefficient management and an inefficient in utilized all their assets to generate

a profit. It is showed an increasing in growth opportunity from 2006 to 2009. But in

the other hands, it is show a decreasing in worth value that can be gain with every

ringgit year by year.

Corporate social responsibility is a concept whereby I-Power holds with

utmost importance in taking responsibilities for the impact of activities on customers,

employees, shareholders, communities and the environment in all aspect of

organizations operations. I-Power is fully aware that the obligation extends beyond in

statutory obligation to comply with legislation and therefore voluntarily taking further

steps to improve the quality of life for employees and their families as well as for the

local community and society at large.



Various activities were planned and implemented to fulfil its CSR obligations,

which is the workforce, community, and environment. The company organizes

gatherings and recreational events on regular intervals for its staff and family

members to foster and cultivate a happy and productive workforce with a strong sense

belonging. I-Power team make donations annually to various welfare bodies and

NGOs for welfare purposes. In the other hands, the company also has adopted eco-

friendly practices in its day-to-day work in order to minimize the impact on the

environment, such as paperless environment, recycling and energy savings.

a. From a point of view of a banker, does the company deserve additional

working capital loan? Justify your answer.

I-POWER BERHAD raise their fund from borrow loans from bank or issue

share or debentures to public. Either banker or investor, they will analysis company’s

performance from financial ratios to decide whether company worth to invest or not.

But the ratios that banker and investors used to decide whether they should invest in

that company are different.

For bankers, they will more consent on company future performance and ability

to pay back the loans. Ratios which show the company liquidity, profitability, capitalstructure and solvency are more important for banker. They will use these ratios to

decide they should approve a loan to that company. I-POWER BERHAD liquidity is

favourable to bankers.

I-POWER BERHAD acid test ratio is considered in good condition because it

has a ratio of more than 1 for each year in the rule of thumb. Company’s solvency

ratios had make bankers reassurance about company ability to pay back the loan.

Total debts to equity capital ratios are not more than 1 for past 5 years, which mean

company do not have heavily rely on debt.

The profitability for the company is decreased. Net profit margin is decreased

from 2006 to 2009. Nevertheless, this show that the company performance in

management has to improve in their operating activities which will reduce their

operating costs. The profitability for I-POWER BHD is showing a bad sign in

company capital structure and solvency. The banker will facing a long term period in



collected the loan and the loan borrowed to the company have the higher risk will

become bad debt to the banker.

b. From a point of view of an investor, is this company considered as a good

investment? Justify your answer.

Investors will use profitability and equity analysis to decide they should invest

in that company or sell the company shares. Net profit margin for the company is

constant for this few years. One of the important ratios for investor is return on

common equity. This ratio will boost investor’s confidence to invest in this company.

The company had changed their operating activities to more efficient which will

reduce the operating costs. A good operating company will attract more investors. In

the other hand, the highest of the P/E ratio indicates the highest growth opportunities.

Since the I-POWER BERHAD P/E ratio is keep decreasing from the year of 2006 till

2009, it has made the investor dare not to invest in that company.

c. From a point of view as a citizen, do you think that the organization has been

contributing to the welfare and social development of our country? Justify your

recommendation.

I-POWER BERHAD has been contributing to the welfare and social development for

our country. The company holds with utmost importance in taking responsibilities for

the impact of activities on customers, employees, shareholders, communities and the

environment in all aspect of organizations operations. I-Power is fully aware that theobligation extends beyond in statutory obligation to comply with legislation and

therefore voluntarily taking further steps to improve the quality of life for employees

and their families as well as for the local community and society at large.

As a socially responsible corporation, I-POWER BERHAD has always

shown care for the environment, care for employees, fostering strong relationships

with business associates and supporting many community welfare causes as part of its

business ethics and responsibilities.



I-POWER BERHAD is a caring and responsible corporation and has various

activities were planned and implemented by the company to fulfil its CSR obligations

in the workforce, the community, and the environment. I-POWER team make

donations every year, organizes gatherings and recreational events on a regular

intervals for staff and family members, and also adopted eco-friendly practices in its

day-to-day work in order to minimizes the impact on the environment such as

recycling, energy savings and paperless environment.

REFERENCES

Financial Statement Analysis Book, 10th Edition, --- K.R Subramanyam .

John J. Wild

http://cpaclass.com/fsa/ratio-01a.thm

http://tippie.viowa.edu

http://announcements.bursamalaysia.com

http://yahoofinance.com

http://www.klse.com.my/

http://www.ipowerbiz.com.my

E. APPENDIX (FORMULA)

Short- term liquidity Capital structure and solvency:


http://tippie.viowa.edu/

http://announcements.bursamalaysia.com/

http://yahoofinance.com/


http://www.ipowerbiz.com.my/




http://tippie.viowa.edu/

http://announcements.bursamalaysia.com/

http://yahoofinance.com/





Profitability analysis Equity Analysis:

Current ratio

Current assets/Current liabilities

Total debt ratio

Total debt / total capital

Acid test ratio (quick ratio)

(Current assets – inventory) /current

liabilities

Total debt to equity capital

Total debt/ total equity to capital

Account receivable turnover

Net sales/Average gross receivable

Long term debt to equity capital

Long term debt/ total equity capital

Cash flow ratio

Operating cash flow/current liabilities

Altman’s Z-score

Z= 0.717X1 + 0.847X2 + 3.107X3 +

0.420X4 + 0.998X5

Smith’s Z-score

Z = -0.018 + 1.829X1 + 0.114 X2 –

0.080X3

Net profit margin

Net income/sales

Earning yield

Earnings per share/ market price per

share

Total assets turnover

Sales / average total assets

Price / earnings ratio

Market price of the share/earnings per

share

Return on total equity

Net income/average common equity

Percentage of earning retained (%)

Net income-all dividend/ net income

Net operating profit margin

Net operating profit after tax/sales

I-POWER BERHAD

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