COMPARISONS OF MAXIS BERHAD AND DIGI BERHAD

Ratio/Year 2014 2015

LIQUIDITY Assess Assess
Maxis Digi Maxis Digi
RATIOS -ment -ment
Current Ratio 0.62 0.46 Good 0.58 0.38 Good
Quick Ratio 0.61 0.44 Good 0.57 0.35 Good
Average Collection Ratio 42.23 37.65 Poor 51.69 48.67 Poor
Accounts Receivable Turnover
8.64 9.69 Poor 7.06 7.50 Poor
Ratio
Inventory Turnover Ratio 217.60 32.53 Good 205.91 17.42 Good
Days’ Sales in Inventory 1.68 11.22 Good 1.77 20.96 Good
CAPITAL STRUCTURE
RATIOS
Debt Ratio 73.84 84.06 Good 77.77 88.86 Good
Times Interest Earned 9.98 67.60 Poor 9.25 40.08 Poor
ASSET MANAGEMENT
EFFICIENCY RATIOS
Total Assets Turnover Ratio 0.46 1.65 Poor 0.45 1.48 Poor
Fixed Asset Turnover Ratio 2.09 2.98 Poor 2.03 2.62 Poor
PROFITABILITY RATIOS
Gross Profit Margin 67.73 70.47 Poor 68.28 70.58 Poor
Operating Profit Margin 50.41 36.67 Good 50.36 32.58 Good
Net Profit Margin 20.56 28.57 Poor 20.31 24.91 Poor
Operating Return On Assets 23.35 60.57 Poor 22.82 48.31 Poor
Return On Equity 36.41 296.02 Poor 41.40 331.67 Poor
MARKET VALUE RATIOS
Price-Earnings Ratio 0.30 0.18 Good 0.28 0.23 Good
Market-To-Book-Ratio

Ratio/Year 2016 2017

LIQUIDITY Assess Assess
Maxis Digi Maxis Digi
RATIOS -ment -ment
Current Ratio 0.49 0.76 Poor 0.57 0.83 Poor
Quick Ratio 0.59 0.74 Poor 0.47 0.80 Poor
Average Collection Ratio 67.07 94.74 Good 66.38 70.06 Good
Accounts Receivable Turnover
5.44 3.86 Good 5.50 5.21 Good
Ratio
Inventory Turnover Ratio 458.05 34.31 Good 693.48 25.61 Good
Days’ Sales in Inventory 0.80 10.67 Good 0.53 14.25 Good
CAPITAL STRUCTURE
RATIOS
Debt Ratio 75.97 90.56 Good 63.42 91.11 Good
Times Interest Earned 9.68 27.67 Poor 11.40 13.99 Poor
ASSET MANAGEMENT
EFFICIENCY RATIOS
Total Assets Turnover Ratio 0.43 1.20 Poor 0.45 1.09 Poor
Fixed Asset Turnover Ratio 1.78 2.33 Poor 1.80 2.18 Poor
PROFITABILITY RATIOS
Gross Profit Margin 68.39 75.13 Poor 72.48 76.11 Poor
Operating Profit Margin 52.84 32.74 Good 54.15 29.22 Good
Net Profit Margin 23.37 24.75 Poor 25.20 23.29 Good
Operating Return On Assets 23.17 39.29 Poor 24.46 31.76 Poor
Return On Equity 42.63 314.41 Poor 31.55 284.68 Poor
MARKET VALUE RATIOS
Price-Earnings Ratio 0.22 0.22 0.21 0.27 Poor
Market-To-Book-Ratio

Ratio/Year 2018
LIQUIDITY
Maxis Digi Assessment
RATIOS
Current Ratio 0.59 0.78 Poor
Quick Ratio 0.58 0.75 Poor
Average Collection Ratio 81.66 81.68 Good
Accounts Receivable Turnover Ratio 4.47 4.47
Inventory Turnover Ratio 189.08 25.24 Good
Days’ Sales in Inventory 1.93 14.46 Good
CAPITAL STRUCTURE RATIOS
Debt Ratio 63.91 89.15 Good
Times Interest Earned 10.53 15.00 Poor
ASSET MANAGEMENT EFFICIENCY
RATIOS
Total Assets Turnover Ratio 0.46 1.05 Poor
Fixed Asset Turnover Ratio 1.77 2.27 Poor
PROFITABILITY RATIOS
Gross Profit Margin 67.26 76.36 Poor
Operating Profit Margin 41.33 29.87 Good
Net Profit Margin 19.36 23.61 Poor
Operating Return On Assets 19.18 31.41 Poor
Return On Equity 24.89 228.88 Poor
MARKET VALUE RATIOS
Price-Earnings Ratio 0.24 0.23 Good
Market-To-Book-Ratio 0.05

Current ratio is the number of times a company’s current assets exceed its
current liabilities, which is an indication of the solvency of the business. Maxis was
performing poor compared to its peer firm Digi with the average of 2 years performing
well (2014 and 2015) and 3 years of performing poor (2016,2017 and 2018). This was
due to Maxis’ lack of current assets and excessive of current liabilities from 2016 to
2018. This can be improved by increasing current assets or decreasing current
liabilities. Steps can include selling fixed assets to retrieve cash and paying down short
term debts.

Quick or acid test ratio tests whether a company can meet its obligations even
if adverse condition occurs and it only looks on at the company’s most liquid current
assets to compare to current liabilities. Maxis was performing poor compared to Digi
with the average of 2 years performing well (2014 and 2015) and 3 years of performing
poor (2016,2017 and 2018).

Average collection period measures the number of days it takes for a company
to collect its receivables. Maxis was performing slightly better compared to Digi from
2016 to 2018 with just few days shorter. Maxis took the longest to clear off its
outstanding payments from customers in 2018 which was around 82 days and quickest
in 2014 in just around 43 days. This explained Maxis’ low liquidity position over the
years.