SECOND SEMESTER 2022/2023 (A222)

BWFF2033 FINANCIAL MANAGEMENT

GROUP H

GROUP ASSIGNMENT TITLE:

FINANCIAL MANAGEMENT DECISIONS CARRIED OUT BY FINANCIAL
MANAGERS OF BINA PURI HOLDINGS BHD AND HO HUP CONSTRUCTION
COMPANY BHD
PREPARED FOR:
DR HALIMA BEGUM

PREPARED BY: GROUP 1

NO. NAME NO MATRIC

1. YASHWINY A/P YOGANATHAN 277240

2. NUR FATIN AMIRAH BINTI MOHD FAUZI 285878

3. CHE KHAIRI BIN CHE RIAH 286706

4. AINUL MARDHIAH BINTI ZAMRI 292532

5. RAWIAH BINTI ABD WAHAB 292608

6. NURUL AKMAR BINTI MOHAMED SIDIK 292990

7. INTAN SYAFIQAH BINTI MAZLAN 294041

SUBMISSION DATE: 15TH JULY 2023

 BWFF2033 FINANCIAL MANAGEMENT

Table of Contents

1.0 Introduction.................................................................................................................. 1
2.0 Background of Project................................................................................................. 1
2.1 Bina Puri Holdings Bhd..................................................................................... 1-2
2.2 Ho Hup Construction Company Bhd................................................................. 2-3
3.0 Materials and Methods................................................................................................ 3
3.1 Quantitative........................................................................................................ 3-4
3.2 Qualitative............................................................................................................. 4
4.0 Analysis and Discussion.............................................................................................. 5
4.1 Provide an explanation of the financial management decisions
of your selected companies. ............................................................................. 5-9
4.2 Explain how each of the financial management decisions
affects either the profitability or the market capitalization
value of selected companies. ......................................................................... 10-13
4.3 Highlight whether the financial manager of any company needs
to improve on any of the decisions. .............................................................. 13-14
4.4 Check whether the quality of the Chief Executive Officer (CEO)
of the company affects the financial management decisions. ....................... 14-15
5.0 Conclusion.......................................................................................................... 15-16
References............................................................................................................... 17-18
Appendices

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1.0 INTRODUCTION
This project is all about financial management decisions to find out the capital structure,
investment, and working capital decision. Financial management must be concerned with
various responsibilities to make it effective for both individuals and organizations to achieve
their goals. Financial management is important for individuals and organizations to achieve
their goals or financial objective to secure their future plans. Furthermore, financial
management can assist the company in making the proper investment and financing decisions
in order to avoid financial risks and boost the company's worth.
Financial management is defined as the planning, regulation, direction, and
control of a company's financial activities. This financial management applies general
management ideas to the financial resources of the organization. Personal and
commercial success requires effective financial management. This includes the
management of financial resources, the analysis of financial statements, and the
making of smart financial decisions. Implementing appropriate financial management
is critical for a company's long-term success. Investing wisely and managing your
funds on a regular basis will result in a brighter financial future for all parties
concerned.
In this project, we need to choose two different companies and we choose
both companies from the construction sector which are Bina Puri Holding Bhd and
Ho Hup Construction Company Bhd. After that, we need to find an annual report from
both companies from 2018 to 2022 that we find from their company website. We also
need to analyze the company's annual report to complete this project.

2.0 BACKGROUND OF PROJECT

2.1 Bina Puri Holdings Bhd

Bina Puri Holding Bhd has been established in 1975 by Dr. Tony Tan Cheng Kiat. Bina puri
is a well-known Malaysian construction company. In the beginning, the company was only a
small business that was located on Jalan Pahang. Since 2000 the group progressed
aggressively until occupying and being listed on the main board of Bursa Malaysia in public
construction both inside and outside the country.
In the beginning, Bina Puri Holding Bhd just concentrated on civil repair and
maintenance work while building its credibility in the industry, but now the company
has carried out construction business activities including civil and building
construction, utilities and hospitality management, investment holding, and many
more. Furthermore, Bina Puri Holding Bhd has a skilled and skilled workforce for 44
years. This can further maintain their company to continue to grow more rapidly.
In addition, Bina Puri Holding Bhd has also successfully completed many
construction projects since the company was established. Among the projects that
Bina Puri Holding Bhd is proud of is the 33 km toll highway that connects the KL
highway, Kuala Selangor, the main residences and malls in USJ 21 as well as the
power plant in Indonesia with a profit value that reaches billions. Bina Puri Holding

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Bhd has also received various awards for its hard work in construction from 2005 to
2020. Among the most recent awards is the Asia Pacific Property Award 2020-2021
International Fire Star Hotel that received in 2020.
Bina Puri Holding Bhd has a marketing office locally and internationally. The
company has operated approximately 40 companies or subsidiaries in Malaysia. The
company also has operated the business internationally in many countries such as Indonesia,
Thailand, Saudi Arabia, and many more. The latest project is a civil and building project in
southern Iraq that builds Dual Lare Road from Al- Islah Junction to Al- Jabayish with
74.5km. The value of the contract is around USD 97 million equivalent to RM 303 million.
The business has shown extraordinary growth with RM136.5 million in 2022. The company
grew rapidly with a strong profit in the company.

2.2 Ho Hup Construction Company Bhd

En low Chee founded Ho hup Construction Company Bhd. Ho Hup Construction Company
Bhd is a Malaysian construction firm that offers materials and services for any development.
Initially, Ho Hup Construction Company Bhd completed several projects in India, China,
Thailand, and other countries. Locally, Ho Hup Construction Company Bhd is involved in the
commercial and public sectors in the development of airport stadiums, highways and bridges,
light rapid transit, oil and gas, and many other projects. Ho Hup Construction Company Bhd
was officially listed on the main board of Bursa Malaysia in 1991. The corporation has local
and worldwide subsidiaries. The company has a strong subsidiary that is capable of
completing difficult projects and is in a good position to improve the company's profits.
Ho Hup Construction Company Bhd has also completed a number of projects both
locally and overseas. Immigration Quarterly Pengkalan Hulu, Peram Jalan FT001, Segamat,
Johor, Politeknik Hulu Terengganu, Aurora Place, Aurora Soro & Rovo, Bukit Jalil, Kuala
Lumpur, and Kem Askar Mukim Bandar, Johor are among the projects they have done in
locally. Aside from that, the current project completed by the Ho Hup Construction Company
Bhd is Flex Sovo at Bukit Jalil, which yields a profit of RM404200 onwards, Laman
Iskandaria at Kulai, which yields a profit of RM332000 onwards, and The Crown at Kota
Kinabalu, which yields a profit of RM499000 onwards. In 2022, the company earned a profit
of up to RM213041000.
Tru-Mix concrete Sdn Bhd and Ho Hup ICM-Quarry Sdn Bhd are two well-known
subsidiaries that produce building materials. Tru-Mix Concrete Sdn Bhd began in the
building industry and the production of ready-mixed concrete in 1991. Tru-Mix Concrete Sdn
Bhd has grown effectively in the following areas by having experienced and skilled people
during the growing economy. Tru-Mix Concrete Sdn Bhd has been a supplier to several
distinctive and renowned buildings in this country, including the Bukit Jalil National
Stadium, the Satellite Building in KLIA, Mont Kiara, and many more.
Furthermore, the next subsidiary, Ho Hup ICM-Quarry Sdn Bhd, is based in Malacca
and is known as Ho Hup Venture (Malacca), and it owns 70% investment of Ho Hup
Company Bhd. Ho Hup ICM-Quarry has taken over the quarry business in Taboh Naning,
Alor Gajah, Melaka, in order to address the demand for quarry products resulting from
development and construction operations. Ho Hup Quarries (Malacca) Sdn Bhd was

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previously known as Erakuasa Global Sdn Bhd (HHQM) due to its 75% ownership in Ho
Hup-ICM Quarry Sdn Bhd, which was previously known as ACVICM Quarry Sdn Bhd
(HHICM). The existence of this subsidiary in the Ho Hup Company Bhd allows the company
to improve the quality of their development in a more distinctive and creative way, as well as
indirectly raise the company's revenue.

3.0 MATERIALS AND METHODS

This study, several methods were used to obtain information and data that are important in the
title of this study. This study has used quantitative and qualitative data methods to obtain and
gather information. Quantitative and qualitative methods are obtained through the internet.

3.1 Quantitative
In this study, we used quantitative methods to obtain information related to the study
conducted. Quantitative methods refer to numerical information that can be measured and
analyzed to obtain meaning and results. It involves the use and analysis of numerical data
using specialized statistical techniques. It also explains the method of explaining an issue or
phenomenon through the collection of data in numerical form. Further research reveals that
quantitative methods can be categorized into; survey research, correlational research,
experimental research, and causal-comparative research. Furthermore, this method is used to
obtain data collected from sources such as financial reports. The objective of this study is to
evaluate the company's financial performance in addition to understanding the characteristics
of the industry, market, and business. In addition, quantitative data is obtained from internal
and external sources within the company. Internal sources of quantitative data obtained are
financial reports, information about the firm accessed through the internet, and financial
statements. Furthermore, this study has accessed the website to obtain important information,
and the data is taken from a reliable external source, which is Bursa Malaysia. The following
are various ratios used in financial management decisions.

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Financial Ratios to be calculated

Management
Decisions

1 Capital structure Total Debt Ratio, Equity Multiplier, Long-term debt ratio, Times
decision Interest Earned, Cash Coverage and Debt to equity ratio.

2 Investment decision Inventory Turnover, Receivables Turnover, Total Asset

. Turnover, Fixed Asset Turnover, Asset reinvestment ratio,
Accounts Payable turnover

3 Working capital Cash conversion cycle, Cash flow and Cash ratio
decision

4 Market capitalization Market value, Earnings Per share, Price Earnings Ratio and
value Market-to-book ratio

5 Profitability Return on Assets and Return on Equity

3.2 Qualitative
In this study, we also used a qualitative method to obtain information related to the
study conducted. Qualitative methods are a research tool used to analyze the overall value of
an organization based on indicators that cannot be measured. Non-measurable indicators are
information about items in an organization such as management expertise, industry cycles,
company strengths, weaknesses, opportunities, and threats. In addition, through qualitative
methods, it can help in analyzing and understanding the company's competitive position,
trends, and non-financial aspects that affect the financial performance of a company. In this
study, we used the internet to obtain information related to the company's background,
strategy, company analysis, and risk factors for the two companies studied. Through this
method, a lot of information has been obtained to facilitate the conduct of this study. In
addition, we can increase knowledge and skills and save time and resources.

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4.0 ANALYSIS AND DISCUSSION

4.1 Provide an explanation of the financial management decisions of your selected

companies.
Financial
Management Explanation of Bina Puri Holdings Bhd
Decision
By looking at the Bina Puri Holdings Bhd debt-to-equity ratio, we can
see that 2021 has the lowest value, while 2020 has the highest value.
This indicates that the company was using the largest debt to finance
its operation than equity in 2020, then managed to reduce it in the next
year. However, the company’s long-term debt ratio can be seen as
relatively stable as its values over 2018-2022 are not changing in a
large range, which suggest that Bina Puri Holdings Bhd managed their
debt level well. But, by looking into equity multiplier data, we can see
this company has high uses on debt to finance its operations in that
Capital period in 2020 until 2022 because it has a relatively increased equity
Structure multiplier every year. In addition, the cash coverage ratio of this
Decision company has decreased from 4.62 in 2018-2019 to 2.15 in 2021. This
may indicate that the company was generating less cash flow from its
operations in 2021. However, we can see that Bina Puri Holdings Bhd
is struggling to generate enough cash flow to cover its debt payment in
the next year, when their cash coverage ratio has been increased to
3.19 in 2022. Moreover, the company's times interest earned ratio has
decreased from 4.5 in 2018-2019 to 3.08 in 2022. Overall, Bina Puri
Holdings Bhd company's capital structure can be seen as conservative
over the period from 2018-2022. We can see this company is
struggling to reduce the debt used to be more financially stable.
Investment To see this company's performance in their investment decision, we
Decision can take a look at their inventory turnover ratio. By 2018-2022, this
company inventory turnover ratio had increased from -6023.20 times,
to -1.11 times over a 5 years period. By looking into this information,
we can understand that Bina Puri Holdings Bhd has been able to sell
their inventory quicker. Then, their receivables turnover ratio showed
that this company was not able to collect their receivables more
quickly. It can be proved by the decreasing value of its receivables
turnover ratio, from 2.37 times in 2018-2019, becoming 1.75times in
2022. Next, by looking into their total asset turnover ratio, we can also
identify that Bina Puri Holdings Bhd are using their total assets less
efficiently. It is because this ratio value of the company is showing a
decrease in the time period of 2018 until 2022, from 3.03 times to 0.20
times. However, this company has a little bit of improvement in using
its fixed assets. This can be seen by looking into their fixed asset ratio,
whConcreteeased from 10.20 times to -5.73 times over the time
period. Even though value is still negative, this shows that the

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company is struggling to improve its fixed asset usage. Lastly, we need

to look at the company asset reinvestment ratio to identify the
company's performance in its investment decision. Bina Puri Holdings
Bhd asset reinvestment ratio shows an increase from 0.01 times in
2018-2019 to 0.11 times in 2022. This suggests that this company has
been reinvesting a consistent amount in its business. Overall, Bina Puri
Holdings Bhd had a weak performance in their investment decision
over the past 5 years. Even though they are consistent in reinvesting
the profit of business, this company has been unable to sell its
inventory and collect its receivables quickly. Plus, it has also been
using its total assets less efficiently.
By looking at the Bina Puri Holdings Bhd cash conversion cycle
(CCC), we can see that this company has an uncertain CCC over the
period from 2018-2022. The lowest CCC is -9.73 days in 2018-2019,
which means that the company is able to collect its receivables before
it has to pay the suppliers. The highest CCC is in 2020 with 32324.34
days which means that this company takes so many days to convert
their inventories into cash. This situation indicates that Bina Puri
Holdings Bhd has inefficient performance in their working capital
decision. Next, by looking into this company's cash flow, we also can
Working Capital
see that they have a weak and unstable cash flow over the period from
Decision
2018-2022. Their cash flow is ranging from -RM15783000 in 2021 to
RM164380000 in 2022, and we can understand that a higher cash flow
indicates that the company is generating more cash from its operations
and vice versa. In addition, this company also has an increasing cash
ratio from 2018 to 2022, which is from -0.22 to 0.07. This may suggest
that the company has increased cash on hand relative to its current
liability. Overall, even though the company has an increasing cash
ratio, we can consider that Bina Puri Holdings Bhd had a weak and
uncertain working capital decision in the period of 2018-2022.

To see Bina Puri Holdings Bhd’s performance in their market

capitalization value, we can take a look at their market value. From
2018-2022 this company has a relatively increasing market value
which ranges from RM53.42M in 2018-2019, to RM0.96B in 2022.
Next, the company earnings per share also increased from RM5699.76
M to RM327118.75M over the five years period. This shows that the
Market company had increased their amount of profit per share. Then, their
Capitalization price-to-earning ratio shows a decreasing value over 5 years which
Value ranges from 2.63 to 0.000003. By looking at their bad growth of price-
earnings ratio, it may indicate a less willingness of investors to pay for
this company’s stock relative to its earnings. However, their market-to-
book value shows a stable performance ranging from 0.0000008 in
2018-2019 to 0.000002 in 2022. Overall, even though the company
has a bad growth of price-earning o, but we can consider that they are
struggling to have a good market capitalization value as they managed

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to get a market-to-book ratio.

To know Bina Puri Holdings Bhd’s performance on their profitability,
we can take a look at their return on assets value. By 2018-2022, this
company has a decreased value which from 5.92 to 0.45, which may
indicate the company generates less profits from its assets. In addition,
Bina Puri Holdings Bhd's return on equity has also decreased from
Profitability
10.15 in 2018-2019 to 1.91 in 2022, which may indicate the company
has been generating less profit from its shareholders' equity over the
period. Overall, Bina Puri Holdings Bhd's profitability can be seen as
weak over the 5 years because it has a decreased value of their ROA
and ROE.

Financial
Management Explanation of Ho Hup Construction Company Bhd
Decision
By looking at the Ho Hup Construction Company Bhd debt-to-equity
ratio, we can see there is an increase from 1.05 in 2018 to 1.55 in 2022.
This may indicate that the company was using more debt to finance
their operation in the period. However, the company’s long-term debt
ratio can be seen as relatively decreasing from 0.13 to 0.03 over 2018-
2022. This can suggest that the company is trying to become more
financially stable. But, by looking into equity multiplier data, we can
see this company has high uses on debt to finance its operations in that
period from 2018 until 2022 because it has a relatively increased
Capital
equity multiplier from 2.88 to 3.63. In addition, the cash coverage ratio
Structure
of this company has decreased from 0.37 in 2018 to -1.21 in 2022. This
Decision
may indicate that the company was generating less cash flow from its
operations in 2022. Moreover, the company's interest earned ratio has
decreased from 5.26 times in 2018 to 1.59 times in 2022. Overall, we
can see that Ho Hup Construction Company Bhd's capital structure
decision is uncertain over the past five years. This company was using
more debt to finance its operations, generate less cash flow from its
operations, and had a bad performance of their interest earned ratio.
This situation may suggest the company take steps to improve its
capital structure decision
To see this company's performance in its investment decision, we can
take a look at its inventory turnover ratio. By 2018-2022, this
company’s inventory turnover ratio can be seen as relatively stable
Investment because there is no large difference in the value between all years,
Decision which ranges from -0.42 times to -0.35 times over the period. This may
suggest that Ho Hup Construction Company Bhd has been able to sell
its inventory in a consistent performance. Then, their receivables

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turnover ratio also showed that this company was able to collect their
receivables more quickly. It can be proved by the increasing value of
its receivables turnover ratio, from 0.84 times in 2018, becoming 6.52
times in 2022. Next, by looking into their total asset turnover ratio, we
can also identify that Ho Hup Construction Company Bhd are using
their total asset and fixed asset less efficiently. It is because these two
ratio values of the company are showing decreases in the time period
of 2018 until 2022. Which from 0.24 times to 0.14 times for their total
asset turnover ratio, and 3.15 times to 2.01 times for fixed asset
turnover ratio. Lastly, we need to look at the company asset
reinvestment ratio to identify the company's performance in its
investment decision. Ho Hup Construction Company Bhd’s asset
reinvestment ratio shows an increase from 0.33 times in 2018 to 0.51
times in 2022. This suggests that this company has been reinvesting a
consistent amount in its business. Overall, Bina Puri Holdings Bhd had
a stable performance in their investment decision over the past 5 years.
Even though they are less effective in using their assets, they are still
able to sell their inventories and receivables consistently. Ho Hup
Construction Company Bhd also shows that they are trying their best
to give good performance in their investment decision by consistently
reinvesting their profits in the business.
By looking at the Ho Hup Construction Company Bhd cash conversion
cycle(CCC), we can see that this company has an uncertain CCC over
the period from 2018-2022. The lowest CCC is -380.43 days in 2018,
which means that the company is able to collect its receivables before
it has to pay the suppliers. The highest CCC is in 2020 with 344.6
days, which means that this company takes so many days to convert
their inventories into cash. This situation indicates that Ho Hup
Construction Company Bhd has inefficient performance in their
working capital decision. Next, by looking into this company's cash
Working Capital
flow, we also can see that they have a weak and unstable cash flow
Decision
over the period from 2018-2022. Their cash flow is ranging from -
RM107758000 in 2020 to RM149587000 in 2019, which we can
understand that a higher cash flow indicates that the company is
generating more cash from its operations and vice versa. In addition,
this company also has a decreasing cash ratio from 2018 to 2022,
which is from -0.03 to -0.09. This may suggest that the company has
decreasing cash on hand relative to its current liability. Overall, we can
consider that Ho Hup Construction Company Bhd had a weak and
uncertain working capital decision in the period of 2018-2022.
To see Ho Hup Construction Company Bhd’s performance in their
Market market capitalization value, we can take a look at their market value.
Capitalization From 2018-2022 this company has an uncertain market value which
Value has the highest one, RM262.28M in 2020, and the lowest one,
RM128.66M in 2022. Next, the company earnings per share had been

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decreasing over the past 5 years, from RM1196.76 M in 2018 to

RM801.40M in 2022. This shows that the company had decreased their
amount of profit per share. Then, their price-to-earning ratio and
market-to-book ratio show uncertain values over 5 years from 2018
until 2022. By looking at the uncertain growth of both ratios, it may
indicate a less willingness of investors to pay for this company’s stock
relative to its earnings. Overall, we can consider that Ho Hup
Construction Company Bhd has an uncertain market capitalization
value over 5 years. It also may indicate that the market has been
assigning a low valuation to the company's stock and assets over the
period.
To know Ho Hup Construction Company Bhd’s performance on their
profitability, we can take a look at their return on assets value. By
2018-2022, this company has a decreased value which from 0.41 to
0.34, which may indicate the company generates an uncertain profit
Profitability level from their assets. In addition, Bina Puri Holdings Bhd's return on
equity has an uncertain value ranging from 0.41 to 0.34 and 1.0 to 0.94
over the 5 years. Overall, Bina Puri Holdings Bhd's profitability can be
seen as weak over the 5 years because it has an uncertain value of their
ROA and ROE.

4.2 Explain how each of the financial management decisions affects either the
profitability or the market capitalization value of selected companies.

Market Capitalization Value

Bina Puri Holings Bhd
Year 2018-2019 2020 2021 2022
Market value 53.42M 597.66M 1.25B 0.96B
Earnings Per share 5699.76 M 957.48M 393294.23M 327118.75M
Price Earnings 2.63 0.0003 0.000002 0.000003

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Ratio
Market-to-book
0.0000008 0.000002 0.000002 0.000002
ratio
Ho Hup Construction Company Berhad
Year 2018 2019 2020 2021 2022
Market value 179.95M 243.30M 262.28M 207.84M 128.66M
Earnings Per
1196.76M 1475.07M 1002.80M 680.56M 801.40M
share
Price
Earnings 0.0004 0.0004 0.0005 0.0006 0.0003
Ratio
Market-to-
0.000001 0.000001 0.000001 0.0000009 0.0000006
book ratio
Figure 1: Market Capitalization Value’s Ratios

Bina Puri Holdings Bhd

To see Bina Puri Holdings Bhd’s performance in their market capitalization value, we can
take a look at their market value over 2018-2022. As we can see, the market value for this
company has a increasing growth. Besides, earnings per share can be defined as an
indicator of how much a company earns per share, and can also be an indicator of a
company's profitability. This company earning per share shows a relative increasing
growth from 2018 to 2022. By this, we can consider the company has generated more
profit for the latest than before. Other than that, we can take a look to their price earning
ratio, which this value can show the percentage of a company's share price to the
company's earnings per share. As the decreasing earning per share ratio for this company,
it may give a bad effect to the investor expectations because the decreasing P/E ratio had
show the company is not really profitable. The higher P/E ratio, the higher expectation of
the investor for the company in the future and vice versa. Thus, because of the declining
P/E ratio of 5 years, it also suggests that this company’s stock price is low in comparison
to its earnings and it can be undervalued by the market. Next, market to book ratio is a
financial metric used to assess a company's current market value relative to its book
value. This ratio is also can be used by investors to represent the market's view of the
value of a particular stock. As we can see, market to book ratio for this company is
increasing over the 5 years. Even though the ratios are increasing, the ratio value is under
1, which means that the company is undervalued. Overall, we can conclude that Bina Puri
Holdings Bhd is performing well in terms of market value and earnings per share but, the
company's price-to-earnings ratio (PER) has declined over the past five years. A decline
in P/E could affect the company, the company may find it more difficult to raise capital.

Ho Hup Construction Company Bhd

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To see Ho Hup Construction Company Bhd’s performance in their market capitalization

value, we can take a look at their market value over 2018-2022. As we can see, the market
value for this company has an unstable growth, also decreasing in the latest years.
Besides, earnings per share can be defined as an indicator of how much a company earns
per share, and can also be an indicator of a company's profitability. This company
earnings per share shows a relative decreasing growth from 2018 to 2022. By this, we can
consider the company has generated less profit for the latest than before. Other than that,
we can take a look at their price-earning ratio, which this value can show the percentage
of a company's share price to the company's earnings per share. This company’s P/E ratio
can be seen as stable because there are no large differences over the period. By this, we
can say that the company has a balanced percentage of the company share in their earning
per share. Next, market to book ratio is a financial metric used to assess a company's
current market value relative to its book value. This ratio is also can be used by investors
to represent the market's view of the value of a particular stock. As we can see, market to
book ratio for this company is having a little bit of decreasement over the 5 years. Which
also has ratios that are lower than 1, which may indicate the company is undervalued.
Overall, Ho Hup Construction Company Bhd has a lower market valuation than the
company's actual value as the

Profitability
Bina Puri Holdings Bhd
Year 2018-2019 2020 2021 2022
Return on Assets
5.92 2.27 0.45 0.45
(ROA)
Return on Equity
10.15 35.91 1.68 1.91
(ROE)
Figure 2: Profitability Ratios for Both Companies

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Ho Hup Construction Company Berhad

Year 2018 2019 2020 2021 2022
Return on Assets 0.41 0.47 0.37 0.25 0.34
(ROA)
Return on Equity 1.0 1.36 1.11 0.76 0.94
(ROE)

Bina Puri Holdings Bhd

For Bina Puri Holdings Bhd. We can see that they have a weak profitability performance
over the 5 years because has a decreased value of their ROA and ROE. Firstly, ROA can
be identified as a measurement of how effectively a company's management is working to
generate profit from their total assets. If a company got a higher ROA means that the they
are using their assets more effectively to generate profits and vice versa. By the table
above, we can see that Bina Puri Holdings Bhd ROA value has been decreasing since
2018 until 2022. This situation may suggests that the company is not using its assets as
effectively as they can. At the same time, Bina Puri Holdings Bhd ROE also shows a bad
growth. As ROE can visualize how effective a company can generate profits per equity in
the business. By this, we can see that the unstable ROE value, plus it keep declining in the
latest years, also give a bad impression to the company capability to convert their equity
into revenues. Overall, Bina Puri Holdings Bhd's profitability has a bad performance over
the period 2018 until 2022. This situation may bring to show a red flag of the company
that likely can reduce the interest of outside parties to invest in this business.

Ho Hup Construction Company Bhd

For Ho Hup Construction Company Bhd. We can see that they have had a weak and
unstable profitability performance over the 5 years because has an uncertain value of their
ROA and ROE. Firstly, ROA can be identified as a measurement of how effectively a
company's management is working to generate profit from its total assets. If a company
got a higher ROA means that they are using its assets more effectively to generate profits
and vice versa. From the table above, we can see that Ho Hup Construction Company
Bhd’s ROA value is unstable from 2018 until 2022. This situation may suggest that the
company is not using its assets as effectively as it can. At the same time, Ho Hup
Construction Company Bhd’s ROE also shows uncertain growth. As ROE can visualize
how effectively a company can generate profits per equity in the business. By this, we can
see that the unstable ROE value, even if it increases in the latest years, also gives a bad
impression of the company’s capability to convert its equity into revenues. Overall, Ho
Hup Construction Company Bhd’s profitability has a weak and unstable performance
over the period 2018 until 2022. This situation may bring to show a red flag for the
company that likely can reduce the interest of outside parties to invest in this business.

4.3 Highlight whether the financial manager of any company needs to improve on
any of the decisions.

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The financial manager of any company need to improve on any of the decisions (Ho Hup
Construction Company Bhd)
A company's financial manager needs to be qualified to handle important
financial management choices. The three key components of the financial decision-
making process are asset management, financing dividends, and investments. The
term "financial management" covers the purchase, financing, and administration of
assets. A financial manager must oversee this delicate decision-making process in
order to assess both internal and external factors that may have an impact on the
ongoing operations of the business.
The financial manager of Ho Hup Construction Company Bhd needs to focus
on how the overall debt ratio has been rising over time, which shows that there is
more debt compared to total assets. This may indicate that the business is using debt
finance more frequently. To keep the company's debt levels manageable and prevent
them from posing an excessive amount of financial risk, the financial manager should
exercise cautious debt management. As per the calculation it shows the increase in
debt ratio from the year 2018 to 2020. It recorded 0.65(2018) and slightly decreased
to 0.65 in 2019. In 2020 it increased again to 0.67, and showed consistent increase till
2021 and 2022 which is 0.71 and 0.72 respectively. The times interest earned ratio
has changed throughout time, showing a notable rise in 2021 and a sharp decline in
2022. A high ratio of times interest earned to earnings shows that the business can pay
its interest costs out of profits. The company's ability to regularly pay interest
commitments should be ensured by the financial manager, who should investigate the
causes of the variation and take appropriate action. As per the calculation time interest
ratio shows inconsistent percentage. As for 2018 it was 5.26 times and it drastically
decreased to 3.10 times in 2019. In 2020 it decreased to 2.71 times and in 2021 it rose
to 5.35 times and again drastically fell to 1.59 in 2022.
For Ho Hup Construction Company Bhd, the stated return on assets (ROA)
and return on equity (ROE) indicate that the financial manager may need to make
some decisions more effectively. Firstly, Return on Assets (ROA): Over the years, the
ROA has changed. It peaked in 2019 (.47), but it has subsequently started to decrease
in upcoming years which are .37(2020), .25 (2021) and .34 (2022) respectively. A
higher ROA denotes better asset utilization to produce profits. To increase the return
on its assets, the corporation might need to increase operational effectiveness, cost
control, or revenue growth, according to the declining trend.Similar to this, there has
been a general declining trend in the ROE over the years notwithstanding some
fluctuations. The profitability produced by shareholders' equity is measured by ROE.
The company's capacity to produce returns for its shareholders is falling, according to
the trend in ROE that is declining. The percentage is greater in 2019 at 1.36%, but it
sharply declines from 2020 through 2021 to 1.11%, .76%, and then marginally rises
to.94% in 2022. The financial manager should concentrate on methods for boosting
profitability and effective equity use to raise ROE.
These findings imply that the financial management should evaluate and deal with
elements affecting the profitability and effectiveness of the organization. This could

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entail taking action to improve operational efficiency, reducing expenses, looking at

prospects for revenue growth, and allocating resources as efficiently as possible.

4.4 Check whether the quality of the Chief Executive Officer (CEO) of the company
affects the financial management decisions.
The quality of CEO of the company affects the financial management decisions
A CEO's quality can have an effect on a company's financial performance. A capable and
successful CEO may provide strong leadership, strategic direction, and good decision-
making, all of which can improve the company's overall performance and financial success.
Here are a few examples of how a CEO's quality might impact a company's financial success.
First and foremost, strategic vision. A talented CEO is in charge of
establishing a clear strategic direction for the organization. Identifying growth
possibilities, responding to market changes, and making educated decisions that
match with the company's goals are all part of this. A CEO with a clear strategic
vision may lead the firm to long-term growth and financial success. Efficiency in
operations. Effective CEOs may frequently optimize the company's operations,
streamline procedures, and increase efficiency. Cost reductions, higher productivity,
and improved financial performance can all result from this. A CEO may improve the
company's bottom line by employing successful operational tactics.
Investor assurance. The caliber of a CEO may have a substantial influence on
investor trust in a firm. A CEO that is regarded and trusted by investors might entice
additional capital investment and shareholder backing. This can assist the company's
financial status and fuel its expansion plans. Employee morale and corporate culture.
A CEO is critical in shaping a company's corporate culture. Increased productivity,
innovation, and staff retention may be attributed to a favorable work environment and
strong employee morale. These elements can help enhance financial performance by
lowering turnover costs, recruiting top personnel, and cultivating an engaged staff.
Relations with the outside world. CEOs frequently represent the firm in
numerous external connections, such as collaborations, agreements, and engagements
with the government. The capacity of a CEO to develop and maintain excellent
connections with stakeholders like customers, suppliers, and regulators can have an
influence on the company's financial success. Positive connections may lead to better
contracts, more sales, and better market access. While the quality of the CEO can
impact a company's financial success, other elements such as industry circumstances,
market dynamics, economic considerations, and internal organizational issues must
also be considered. As a result, evaluating the influence of a CEO's quality on
financial success necessitates taking into account the larger context in which the firm
works.

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5.0 CONCLUSION
According to Bina Puri Holding Bhd's financial ratios, 2021 is the best year for managing its
financial performance. Bina Puri Holding Bhd has a market value of RM 1.25 billion
compared to previous years. It implies that the investor has high hopes for the company's
growth, expansion, and increase in profits, which will benefit both parties. Thus, the value of
market-to-book-ratio is also below one which is 0.000002 and it shows that investors are
willing to pay more for the company rather than its net asset. Moreover, its earning per share
in 2021 is RM 393294.23 million greater than other years. By having high earnings per share,
it indicates that this company likely has an extra profit to distribute to their shareholders as
dividends.
As for Ho Hup Construction Company Berhad, the best year for managing its
financial performance is in 2019, based on its financial ratios. Ho Hup Construction
Company Berhad's market value is increasing from RM 243.30M in 2018 to RM
243.30 in 2019. This indicates that in 2019, this company's financial performance may
improve in terms of higher revenue, profitability or better cost management. So, these
factors are attracting investors as it's more valuable and beneficial for them. Next, the
value of market-to-book-ratio is 0.000001. This shows that the company’s stock is
overvalued and indicates that this company has healthy future profit projections.
Bina Puri Holding Bhd's company’s financial management is better than Ho
Hup Construction Company Berhad in managing their financial performance. This is
due to its profitability. As we can see, the Return on Equity (ROE) for Bina Puri
Holding Bhd's company has the highest value from 2018 until 2022 compared to Ho
Hup Construction Company Berhad. The value of ROE of Bina Puri Holding Bhd's
company is 35.91%, the highest among the other years. This clarifies that a high ROE
shows that the company is profitable in relation to the amount of equity invested by
shareholders. It displays the company's ability to make profits and suggests that its
resources are being used efficiently. Hence, a company that has a higher ROE may
seem as a competitor within the industry which shows that this company has a strong
business model.
Besides, Bina Puri Holdings Bhd's debt-to-equity ratio fell in 2021 compared
to 2020, showing that the firm is less reliant on debt to fund its operations. However,
the long-term debt ratio remained largely steady from 2018 to 2022, indicating
efficient debt management. However, looking at the debt-to-equity ratio of Ho Hup
Construction Company Bhd, we can see that it has risen from 1.05 in 2018 to 1.55 in
2022. This could imply that the corporation used more debt to support its operations
during the period. Next, investment decisions made by Bina Puri Holdings Bhd, their
company's inventory turnover ratio to determine how they performed in their
investment decision. Over a five-year period, this company's inventory turnover ratio
increased from -6023.20 times to -1.11 times. Looking at this data, we can see that
Bina Puri Holdings Bhd has been able to sell their inventories more quickly.
We would like to recommend Ho Hup Construction Company Bhd to increase
revenue and reduce costs to enhance net profit. This can be achieved through
strategies such as expanding target market, reducing waste and elimate unnecessary
expenses. In addition, they also can reduce the amount of debt which can help

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improve Return On Equity. By reducing debt, it will lower interest expenses and
allow more profits to be allocated to shareholders. Next, we would like to advise Ho
Hup Construction Company Bhd to create a solid cash flow forecasting system that
anticipates cash inflows and outflows properly. This aids in forecasting cash
requirements and enables proactive working capital management. It also aids in
anticipating potential cash shortages and taking suitable steps. Last but not least, they
can examine the cash conversion cycle of the company, which evaluates the time it
takes to convert inventory and accounts receivable into cash. Identify bottlenecks and
put initiatives in place to reduce cycle time, such as increasing production efficiency,
shortening payment terms, or promoting quick inventory turnover.

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APPENDICES

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RATIO
CALCULATION- FINANCIAL MANAGEMENT.xlsx

Group
Presentation.pptx

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