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Executive Summary

This report is an analysis of the financial operations and performance of the company for
the year of 2013 till 2017 for both companies of Maxis Berhad and comparing it to TM
Berhad. This report will provide an assessment and analysis of the profitability, liquidity,
performance and financial position of the Maxis Berhad and TM berhad using figures from
the financial statements of the 5 years of analysis.

In the analysis, financial ratios were used to gain a critical review of the specific areas of
assessment of the company’s performance. The ratios were able to provide a clear view of
the overall performance of the company.

The concept of this project is to analyze the financial status of Maxis Berhad and
comparing it to TM Berhad for 5 years starting from 2013 until 2017 and to check the
performance whether they are performing well or lacking in performance. The performance
can be evaluated by doing Financial Analysis of Financial Statements of the companies. It
primarily aims at learning the various factors that can help with evaluation process. We
have tried to find out the reasons or ground where it is lacking. We have also tried to find
out the areas of improvement by doing comparative financial statement between these 2
companies using tools such as ratio analysis, financial statement have been used. In
statistical tools, we have used time series analysis (trends) graph for their financial

Our Project also includes objective of study, Analysis and Interpretation, findings
recommendations, Assumptions, and also forecasting the performance of the company
based on their current qualitative and quantitative analysis.

Financial Statements are prepared primarily for decision-making. They play a dominant
role in setting the framework of managerial decisions. But the information in the financial
statement is not an end in itself as no meaningful can be drawn from these statements
alone. The information provided in the financial statement is of immense use in making
decisions through analysis and interpretation of financial statements. The financial analysis
is the process of identifying the financial strength and weakness of the firm by properly
establishing relationship between the items of the balance sheet and P&L A/C. There are
various methods or techniques used in analyzing financial statement such as comparative
statement, trend analysis, qualitative and quantitative analysis and ratio analysis.

2. Analysis Overview

Company profile
With the vision of “In everything we do, from the way we deal with customers and the way
we work, to the way we manage our talent. In everything that we do, we want to be leaders”,
Maxis base their business operations in the sector of Telecom Service Providers. Maxis
Communications Berhad is a holding company which through its subsidiaries provides mobile,
fixed line, and international telecommunications services in Malaysia. It also provides Internet and
broadband services; and wireless multimedia related services, and owns, maintains, builds, and
operates radio facilities and associated switches. The company was formerly known as Binariang
Berhad and changed the name to Maxis Communications Berhad in 1999. The company was
founded in 1993 and is based in Kuala Lumpur, Malaysia. Maxis Communications Berhad
operates as a subsidiary of Binariang GSM Sdn. Bhd.

The Industry and Economic condition

Maxis have the strength of increasing operational efficiency helping them to widen the
returns. They also have approx. 15 million subscribers across the Asia Pacific. On the other hand,
Maxis has its weaknesses on small employee base in comparison with other big telecom giants,
restricted coverage area and market share due to limited presence around the world. Moreover,
alliances and agreement of Aircel in India, growth in telecommunication services increases its
opportunities. However, their main threats lie within the rapid technology changes needing capital
infusion. Telekom Malaysia, Vodafone, Telenor are the main competitors of Maxis among which
TM will be our main focus in this assignment for analysis purpose only.
In Malaysia, telecommunication providers offer the basic services and features that help
people speak with one another and consume various types of content. Most of the services that are
provided are based on 2G wireless technology, with expansion into 3G and 4G technologies on a
path that is similar to what was seen in the United States.

The following analysis has involved industry environment by using Michael E. Porter’s
five forces. Porter five forces is a well define analytic framework explains the five force that shape
competition to link the telecommunication industry to their effect on an organization’s operating

Firstly, Determination of Entry, the barrier to entry into telecommunication industry is

mainly due to the regulation and policy by government. Every potential entrant will need to obtain
a license by Malaysian Communication and Multimedia Commission (MCMC). However, it is
difficult and expensive to get an approve license from MCMC due to the strict requirements and
procedures. Capital requirement is usually an important issue to build up a firm which is has high
capability to compete in the industry. Whereas, telecommunication is a high competitive industry
in order to gain large market share. Thus, potential entrants have to ensure the sufficient financial
resource since having huge capital will be a competitive advantage to compete. (CHAN CHI YEE,

Secondly, Determinants of Supplier Power, a powerful supplier may exert bargaining

power by increase selling price or reduce the quality of the products. However, powerful of a
supplier must also depend on the position of market situation. A group of suppliers is powerful
when the product they provide are differentiated or it has built up by switching cost. These may
arise when there is occasional requirement by the buyers in this industry such as high invested in
submarine fiber optic cable, and replace the copper cable and old satellite dishes that may provide
reliable broadband connectivity. This may cause buyer tie it to particular suppliers. High
competitive environment causes exist entrants need to invest in high modernization technologies to
enable the company to support and compete in this industry. Therefore, it is crucial for the service
providers to make sure the quality of the technology equipment, yet it makes the supplier group
become more powerful. (CHAN CHI YEE, 2009)
Thirdly, Determinants of Buyer Power, a group of buyers will be considered as powerful
when they able to force down prices, demand higher quality and play competitors off against each
other. Nowadays, there are more demanding of high speed broadband and after sale service, and it
create relatively high competitive among competitors. Every entrant will aspirate to gain the
largest market share, hence to gain more market shares entrants will want to get the consumers
attention by bring out a series of attractive promotions packages. This is to help firm to absorb
more and more market shares, and yet promote their branding also. As consequences, competition
among each other will benefit the consumers who can enjoy the lower price broadband service,
and therefore, consumers become more powerful due to the competition among the service
providers. (CHAN CHI YEE, 2009)

Next, Substitute Products, substitute product is an alternative choice for consumers to

choose to purchase. Substitute product comes into play when there is high growth industry or high
competitive industry. As mentioned earlier, consumers have become more demanding in quality
broadband service and this create an opportunity for new entrants to provide a substitute product
for consumers in lower price or better performance than the existing one. (CHAN CHI YEE, 2009)

Finally, Degree of Rivalry, intensity of rivalry may arise when the competitors want to
lead in a high growth industry such as telecommunication industry. (CHAN CHI YEE, 2009)

Pricing for the industry is set by the Ministry of Communication in Malaysia. Although
carriers are free to set their own prices, there is maximum ceiling which is allowed. This has
caused innovative packaging to be created to entice customers to a specific service since all
providers provide the same basic essentials.

There have been particularly high levels of growth in specific sectors within the Malaysia
telecommunication industry since 2010, most notably in broadband connections. Although pricing
is somewhat higher in Malaysian than other nations in the same region, the signal coverage and
overall connection strength tends to be more reliable. Overall, the industry and maxis itself remain
flexible despite of challenging global economic climate which proven by the highest earning in
four years achieved for the year 2017 with RM2.06 billion profit after tax.
3. Evidential Matter

Maxis TM

Ratio Analysis: 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017

Liquidity ratios

Current Ratio: 0.51 0.62 0.58 0.49 0.57 0.99 1.33 1.25 1.15 0.98

Acid Test Ratio: 0.42 0.54 0.47 0.39 0.49 0.89 0.54 0.47 1.04 0.85

Collection period: 24.25 25.98 26.74 34.89 39.37 49.53 50.00 51.55 52.82 49.13

Days to sell inventory(Days): 11 6 2 1 1 103 63 74 93 104

Capital Structure &


Total debt to equity: 1.11 1.72 2.1 1.86 1.06 0.68 0.83 0.92 1 0.9

Times interest earned: 11.96 10.85 13.44 17.02 22.42 3.83 4.9 3.96 3.65 4.01

Long term debt to equity: 38.29 44.82 46.39 44.6 38.65 22.93 27.91 29.54 30.66 28.15

Profitability Ratio

Return on assets(%): 11.06 10.55 9.98 10.91 11.92 4.67 3.80 2.98 3.14 3.74
ROI(%): 13.91 13.64 13.21 14.63 15.36 8.96 6.84 5.40 5.75 6.75
Return on common equity(%): 27.11 36.41 41.4 42.63 31.12 14.43 11.31 9.12 10.03 11.97
Operating performance

Gross profit margin(%): 66.0 67.7 68.3 64.3 66.2 93.5 93 92.5 92.7 93.3

Net profit margin(%): 31 33.5 33.3 37.5 38.7 13.1 13.3 11.1 9.6 9.7

Asset Utilization

Accounts receivable turnover: 9.72 8.75 7.86 6.15 5.5 7.37 7.3 7.08 6.91 7.43

Inventory turnover: 32.82 65.33 212.38 283.67 563.34 3.56 5.79 4.96 3.95 3.5

Total assets turnover: 0.52 0.47 0.46 0.45 0.45 0.49 0.51 0.5 0.49 0.49

PPE turnover: 2.14 2.08 2.09 1.97 1.86 0.73 0.77 0.78 0.77 0.74

Cash turnover: 10.23 7.17 6.08 8.7 13.54 3.4 4.08 3.61 3.75 5.2

Working Capital Turnover: -7.17 -4.92 -4.67 -3.73 -4.11 392.2 14.26 7.57 10.1 31.67

Market Measures

Price to earnings: 29.4 30.8 31.8 22.7 21.3 18 28.9 33 31.2 26.5

Price to book: 8.7 10.4 12.5 9.9 6.8 2.7 4.1 3.2 3.4 2.8

Dividend payout
rate(%): 170.2 174.6 86.2 74.6 69.9 92.22 100 114.44 104.37 87.04
Table-1: Ratio analysis of Maxis and TM Berhad
Interpretation on Liquidity:

Current ratio:

Figure 1: Trend of current ratio

The current ratio helps investors and creditors understand the liquidity of a company and how
easily that company will be able to pay off its current liabilities. This ratio expresses a firm’s
current debt in terms of current assets. So a current ratio of 4 would mean that the company has 4
times more current assets than current liabilities.
In this case, according to the current ratios stated above for both companies, we can see that
current ratios for Maxis Berhad always below 1 for all 5 years, here indicates that Maxis Berhad
might have trouble on their cash flow, since their current assets is smaller than their current
liabilities. Although, the company managed to keep it stable and not out of control since the
changes for these 5 years are very minimal.
On the other hand, if we are looking into TM Company, it shows that they have stable
current ratios as most of the years on the 5 years’ timeline, the current ratio is equals to 1 or above
or near to reach 1. This indicates that the company having good liquidity on settling their debt by
their current assets.
A higher current ratio is always more favorable than a lower current ratio because it shows
the company can more easily make current debt payments, and in this case, Tm company doing
much better in handling their liquidity compared to Maxis Berhad.
If a company has to sell of fixed assets to pay for its current liabilities, this usually means the
company isn’t making enough from operations to support activities. In other words, the company
is losing money. Sometimes this is the result of poor collections of accounts receivable.
The current ratio also sheds light on the overall debt burden of the company. If a company is
weighted down with a current debt, its cash flow will suffer.
Acid Test ratio:

Figure 2: Trend of Acid Test ratio

Quick ratio is an indicator of solvency of an entity and must be analyzed over a period of
time and also in the context of the industry the company operates in.
The more uncertain the business environment, the more likely that companies would maintain
higher quick ratios. Conversely, where cash flows are stable and predictable, companies would
seek to keep quick ratio at relatively lower levels. In this case, we could see that the analysis from
Maxis berhad maintains almost 0.5 for these 5 years and have a little bit down trend on 2016 for
which they have 0.39 while on the other hand, we have TM Berhad that have much higher quick
ratio of closer to ratio 1 for 3 years and 0.5 for 2014 and 2015, showing they have better control on
their risk of leverage.

Acid test ratio which is lower than the industry average may suggest that the company is
taking too much risk by not maintaining an appropriate buffer of liquid resources. Alternatively, a
company may have a lower quick ratio due to better credit terms with suppliers than the
Collection Period:

Figure 3: Trend of collection period

The average collection period ratio measures the average number of days clients take to
pay their bills, indicating the effectiveness of the business’s credit and collection policies. This
ratio also determines if the credit terms are realistic. It is calculated by dividing receivables by
total sales and multiplying the product by 365 (days in the period).

From the ratio interpretation we could say that, both the companies have up trends on their
collection ratio, except for TM companies that managed to reduce it in their last year of 2017. But
to compare the ratio between both companies we could see that Maxis Berhad have more efficient
control on their collection period as they take less days to collect their receivables, a low average
collection period indicates that the organization is collecting payments faster. However, this may
be an indication that its credit terms are too strict, and customers may seek suppliers or service
providers with more lenient payment terms.

While on the other hand, TM Berhad takes more time on their collection of average 50
days, as a standalone figure, the average collection period does not hold much value; instead, it is a
metric best suited for comparison over time. A company experiences the greatest benefit from
calculating the average collection period by maintaining the metric over time and searching for
trends. In addition, the calculation may be compared to competitors and other businesses in the

Days to sale inventory:

Figure 4: Trend of Days to sale inventory

Day’s sales of inventory (DSI) are one measure of the effectiveness of inventory
management. By calculating the number of days that a company holds onto inventory before
selling, this efficiency ratio measures the average length of time that a company’s cash is tied up in

From the ratio above, we could see the performance of the company for the particular year,
as the graph indicates the days to sell inventory for Maxis Berhad have gone down the hills to 1
day compared to the year 2013 of 11 days, this means that they have managed to become more
effective on selling their inventories and therefore indicates the better performance over the year.
While on the side of TM Berhad, they managed to reduce their day’s sales from 103 in
2013 to 63 in the next year. But after for 2015 till 2017 they have taken more time, and thus
increase days sale consistently to 104 in 2017. This shows that the company having trouble on
their days sale for the recent years.

Interpretation on Capital structure and Solvency:

Total Debt to Equity:

Figure 5: Trend of Total Debt to Equity

Given that the debt/equity ratio measures a company’s debt relative to the total value of its
stock, it is most often used to gauge the extent to which a company is taking on debt as a means of
leveraging. A high debt/equity ratio generally means that a company has been aggressive in
financing its growth with debt. Aggressive leveraging practices are often associated with high
levels of risk.

The analysis of these ratios tell us that on the side of Maxis Berhad, the ratios for all the 5
years are above 1, which indicates the company have been aggressive in their leverage by having
more debt than equity to finance the company. Although, the company has been increasing their
debt for the 3 years starting 2013, they also managed to reduce back to 1.06 in 2017. This shows
that the company is getting back the control and managed to reduce back the risk of debt.
Looking at these ratios, one more thing to be considered is the cost of debt. This means that
how much the company incurred cost on having the debt for financing. If the cost is low and the
company can control it, debt would be beneficial to the company. However, if the cost of debt
financing ends up outweighing the returns that the company generates on the debt through
investment and business activities, stakeholders’ share values may take a hit.
On the other hand, TM Berhad has less than 1 debt/equity ratios for these 5 years except
for 2016, which they increased it to 1. This shows that the company still has more equity in
financing than relying heavily on their debt. The same concept from above would be applied on
the cost of debt.
Times Interest Earned:

Figure 6: Trend of Times Interest Earned

Times interest earned (TIE) is a metric used to measure a company's ability to meet its debt
obligations. Companies that generate consistent annual earnings are more likely to carry more debt
as a percentage of total capitalization. If a lender sees a history of generating consistent earnings,
the firm is in a better position to make principal and interest payments on time. Utility companies,
for example, provide a product that consumers use every month, and these firms generate
consistent earnings. As a result, some utility companies may raise 60% or more of their capital
from issuing debt.

In this case, for Maxis Berhad the ratio has been consistent and in fact showed positive
increment over these 5 years. Their ratio for all these years is above 10 and managed to increase it
until 22.42 in 2017. This indicates that the company has good ability on cover its interest charges
by using pretax earnings basis.
For TM Berhad, the company showing a lot less amount for these 5 years of analysis, with
the ratios of 3-4 times interest earned. This doesn’t necessarily bad, because they still manage to
meet their debt obligation using pretax earnings. On the trend analysis, TM berhad has shown the
company still in stable and consistent number for the 5 years with no extreme downhill trend.
Long Term Debt to Equity:

Figure 7: Trend of Long term debt to Equity

The long-term debt to equity ratio is a method used to determine the leverage that a
business has taken on. To derive the ratio, divide the long-term debt of an entity by the aggregate
amount of its common stock and preferred stock.
When the ratio is comparatively high, it implies that a business is at greater risk of bankruptcy,
since it may not be able to pay for the interest expense on the debt if its cash flows decline. If we
looking at the ratios from Maxis Berhad side, it has ratios of 38-46 along this 5 years, and the
highest amount was in 2015 with 46.39 but they managed to bring it down back to 38.65 in 2017
which shows that whether they decrease the debt or increase their equity, either way it is good
news for the company risk. On the other hand, comparing it to Tm Berhad, it has lot less ratio for
long term debt/equity. This means that TM Berhad has lower risk comparing to Maxis Berhad, and
the company highest ratio for these 5 years is 30.66 and still lower than all of Maxis Berhad for
those 5 years.
The ratio is also used to compare the leverage level of a business with those of its competitors, to
see if the leverage level is reasonable. From this analysis, it can be conclude that both these
companies have about the same amount of ratios even though TM Berhad has slightly lower.
Interpretation on Profitability Ratio:

Return on Asset(%):

Figure 8: Trend of Return on Asset

Return on assets (ROA) is an indicator of how profitable a company is relative to its total
assets. ROA gives a manager, investor, or analyst an idea as to how efficient a company's
management is at using its assets to generate earnings.
From the above figure, Maxis Bhd. has experienced a sharp decline in there ROA until
2015. The ROA has been decreased by 1.08% from 2013 to 2015. However, they have managed to
increase their efficiency in asset management to generate earnings after 2015. From 2015 to 2017,
Maxis observed a constant growth in ROA reaching up to 11.92% which is the highest in last 5
years. This reflects their strategies and effectiveness in asset utilization to generate profit.
On the other hand, TM Berhad has also experienced sharp decrease in their ROA until
2015 by 1.69%. The decline was more than Maxis in this case. Moreover, TM did manage to
improve on their asset management after 2015 but only managed to increase to 3.74% in 2017
which is way behind compared to Maxis. Since Maxis is a global company with operations more
than one country, it’s doing well to manage their asset efficiently and earning profits. However,
TM being a local based company has really needed to focus on asset management policies to help
them generate income.

Figure 9: Trend of ROI

Return on investment (ROI) measures the gain or loss generated on an investment relative
to the amount of money invested. ROI is usually expressed as a percentage and is typically used
for personal financial decisions, to compare a company's profitability or to compare the efficiency
of different investments.
By referring figure 9, it is seen that the ROI of Maxis Berhad is at declining stage up until
2015 but the declined amount is very negligible(0.7%). However, from then, they have a very
efficient returns on invest which reached to 15.36%. This will probably attract more investors to
come in and invest in Maxis as it is on increasing trend of ROI currently.
On the other hand, TM has experienced a downturn in their ROI until 2015. However,
they managed to improve the figure from 5.4% in 2015 to 6.75% which is way below the ROI in
2013( 8.96%). This shows performance adversity which is not at per with the industry. Maxis in
this case has done really well to attract more investors by having efficient growth in their ROI.
Return on Common Equity(%):

Figure 10: Trend of Return on Common Equity

Return on common equity (ROCE) is the amount of net income returned as a percentage of
shareholders' equity. Return on equity measures a corporation's profitability by revealing how
much profit a company generates with the money shareholders have invested.
By referring to figure 10, it is observed that the ROCE of Maxis Berhad has been
increasing until 2017 to 42.63% from 27.11% in 2013. This reflects their growth in that period and
performance efficiency. However, in 2017, there is a sudden decline in ROCE to 31.12% which is
a bad sign for shareholders and also for Maxis as a whole.
Now comparing with TM, their ROCE was declining until 2015 from 2013. However,
they have managed to shape their returns and made the trend climb up from then. The big
difference in return percentage could be due to Maxis as a global company with many operations
whereas TM being a local base company.
Interpretation on Operating Performance:

Gross Profit Margin(%):

Figure 11: Trend of Gross Profit margin

The gross profit margin ratio, also known as gross margin, is the ratio of gross margin
expressed as a percentage of sales. Gross margin, alone, indicates how much profit a company
makes after paying off its Cost of Goods sold. It is a measure of the efficiency of a company using
its raw materials and labor during the production process. The value of gross profit margin varies
from company and industry. The higher the profit margin, the more efficient a company is.
By referring to figure 11, it can be ascertained that Maxis experienced a huge decline in
their gross profit in 2016 in the five years period that has been discussed above. This could be due
to higher cost of sales particularly in 2016. However, they have managed their cost to an extent
that the GPM increased to 66.2% in 2017 and it’s an uptrend which is a positive sign.
On the other hand, Telekom Malaysia’s GPM looks quite healthy as they managed to
overcome their downturn in GPM after 2015. The percentage is quite well in comparison with
Maxis which show their competitor is having better strategies to manage cost which Maxis would
like to adopt.
Net Profit Margin(%):

Figure 12: Trend of Net Profit margin

The net profit margin is intended to be a measure of the overall success of a business. A high
net profit margin indicates that a business is pricing its products correctly and is exercising good
cost control. It is useful for comparing the results of businesses within the same industry, since
they are all subject to the same business environment and customer base, and may have
approximately the same cost structures.
From Figure 12, The NPM curve for Maxis gives consistent growth from 2013 to 2017. This
shows how well Maxis is adopting with the industry change and effectively differentiating
themselves to cater such consistency in their Net profit margin. In that 5 years period, they just
went better and better and hitting their highest NPM in 2017 (38.7%).
On the other hand, TM faced problem to maintain their NPM to the limit where they can
maintain the competitiveness. The NPM curve showing a downturn trend and declined to 9.7% in
the latest 2017. This talk a lot on their performance and competitiveness with Maxis and Maxis on
the other side continue to grow and cater more market.
Interpretation on Asset Utilization:

Account Receivable Turnover:

Figure 13: Trend of Accounts Receivables Turnover

This ratio indicates how efficient the company collects the credits that they extend to their
customers. It is measure by computing net credit sales over their average account receivables. By
referring to Maxis, the ratio keeps declining over the 5 years from 9.72 in 2013 to 5.5 in 2017.
This indicates that Maxis probably facing delinquent client or in other words they are facing
customers with poor ability to repay them back. Another situation could be because of the loose
credit policy being implemented by the group. This is important to the company because, the
longer they hold onto the receivable the bigger the opportunity cost that they have to forgone.

Compared to TM, the receivable collection is quite stable and within the range of their
average collection which are 7.23 times. This also signifies that TM has a very good credit policy
to enhance the repayment from their clients as they able to consistently achieving their average
rate of receivables turnover.
In addition to this, it is not fair saying TM is over-performed Maxis with regards to the
receivable turnover because the fact that Maxis has a bigger product line and the deal with more
consumers and also, they’re operating globally. As compared to TM, their customer base is local
customer only, so the ability and capability to enhance credit policy is higher.

Inventory Turnover:

Figure 14: Trend of Inventory Turnover

This ratio measures the ability of the company to turn over their inventory in a year time. It
is computed as total of cost of goods sold over the average of the inventories. Referring to Maxis,
the inventory turnover has been increasing about 18 times since 2013. The ratios have indicated
that there is quite significant improvement how the company had managed their inventories. This
also might happen because of the less inventories being hold on hand in which in the year 2017
there are only 4.5 million of inventories reported compared to 70.4 million in the year of 2013.
When compared to TM, their inventory turnover ratio indicates a fluctuated trend. The
highest ratio over the 5 years is in the year 2014 with 5.79 and the lowest is with 3.5 in the year
2017. However, even it is decreasing still the group are able to maintain their average of inventory
turnover of 3 to 4 times in a year.
There is huge gap figure when we look at the Maxis and TM due to the fact that Maxis has
declining over its inventories over the years and in the meantime, TM had increased their
inventories on hand. In this case, Maxis are showing a good performance in term of inventory
management but it does not necessarily mean it is good for them. Higher inventory turnover also
means that the company are holding less inventories in which it could be inadequate that would
lead to decrease in sales.

Total Assets turnover:

Figure 15: Trend of Total Asset Turnover

The asset turnover ratio is an efficiency ratio that measures a company’s ability to generate
sales from its assets by comparing net sales with average total assets. In other words, this ratio
shows how efficiently a company can use its assets to generate sales. In Maxis situation the ratio
indicating a slight decrease but is still acceptable as it is within the average assets turnover which
is at 0.47. To make a better comparison, let's look at TM performance in term how well they’re
managing their assets to earn revenue. This is because, we would get a better picture of how the
companies managing their assets.
Over the 5 years, the ratio indicates a stable asset turnover with average of 0.49 to 0.50. As
compared to Maxis, the average of TM in term of asset turnover is slightly higher even both of the
companies are showing a decrease in term of ratio from previous year. It is not fair to say that TM
is being better in term of asset turnover because of the slight different in term of figures. But still,
slight different in figures would make a different if it supported with other ratios like fixed assets
turnover ratio, cash turnover also working capital turnover to detect whether if there is any major
different in that area in which will be interpreted next.

PPE Turnover:

Figure 16: Trend of PPE ratio

This ratio measure how efficient the companies are generating revenue from their fixed
assets like machine, building, and vehicles. In order word, how many the company get in term of
sales for each dollar that they invested in PPE. As for maxis, the turnover in term of PPE is
relatively stable despite of a slight decline in 2017 by 0.11 compared to previous year. Since the
average is 2.02, they have to have a look on their PPE to check whether they’re the assets
efficiently to generate profit because the ratio is declining for two consecutive years.
As for TM, the average of PPE turnover is 0.75 in which they able to achieved it except for
the year 2017 in which showing a slight decline to 0.74 from 0.77 in the year 2017. Comparing to
Maxis, TM is a bit behind in term of PPE turnover about 1.5 times lower. This is because they’re
reporting four times higher of PPE compare to Maxis.
Both of the companies reporting a decline in the PPE Turnover, but then Maxis show a
better prospect in term of ability to manage their assets in generating the revenue. It is not all about
how much is the PPE is worth of, but it is more to how well you’re able to make use the assets to
contribute to the profit earned. That would be an important criterion for the investors to evaluate
the company performance before they put up the capital into the company.

Cash Turnover:

Figure 17: Trend of Cash Turnover

This ratio measuring the amount of times that the company’s cash has been spent through
over certain period of time. In other words, it measures the frequency of company's cash account
replenishment through the sales revenue. As for maxis the cash turnover indicates an up and down
in trend. Over the 5 years, the company cash turnover shows a strong figure at 10.23 in the year
2013, but it goes down to 6.07 in 2015 but rose back to the highest figure of 13.54 in 2017. This
indicates that, the company is trying to efficiently spend the money to ensure that the money is not
As for TM, the figures are stable in slight increase trend. The highest cash turnover achieve
is in the year 2017 with 5.2 while the lowest is 3.4 in the year 2013.
Comparing to Maxis, there a huge average amount different in which Maxis the average is
9.1 while TM is 4. This might be because the revenue earned proportioned to the cash is more in
Maxis compared to TM. However, having a higher cash turnover is good but then one point to note
is that in term the cash balance is much lower. This might drive the company to a financial trouble
if the company does not have a good back up in term of assets and equity.

Working Capital Turnover:

Figure 18: Trend of Working Capital Turnover

The working capital turnover ratio measures how efficiently a business uses its working
capital to produce sales. When look at Maxis figures, the turnover has a negative figure for over
the 5 years but in a declining manner. This is because of the higher current liabilities being
reported compared to the current assets. Even it is negative, the value is getting smaller as in the
year 2017.
As for TM, it has a positive value in which average of 91.16 over the 5 years. The figures
are actually fluctuating due to change in the current assets and current liabilities during the period.
As compared to Maxis, the inflow and outflow of money is smoother in which indicating a more
flexible spending ability and able to avoid financial trouble.
However, it does not necessarily mean that Maxis is doing bad when the figures are
negative. It just that they need to control their flows of money so that they are not trap in financial
trouble such as non-ability repays their short-term debt. Working capital turnover also does not
represent the company overall picture of company performance.
Interpretation on Market Measures:

P/E ratio:

Figure 19: Trend of Price to Earnings Ratio

This ratio measures how many times the earnings per share (EPS) have been covered by
current market price of an ordinary share. It is computed by dividing the current market price of an
ordinary share by earnings per share. P/E ratio is a very useful tool for financial forecasting. It
gives information about the amount that the investors are willing to invest in the company to earn
$1. Referring to Maxis, the P/E ratios average is 27.2 over the five years. Maxis have shown
increase in three consecutive years from 2013 to 2015 but then it decreases in the year 2016 and
2017 by 1.4.
As for TM, the average P/E ratio is 27.5 which are slightly higher than Maxis. Same as
Maxis, the P/E ratios are having its up and down over the 5 years.
So, to say which one is better, the answer is both. Because one company benchmark should
be the same what are the competitors are achieving. In case of Maxis, their ratio is almost at par
with TM indicating that the company is having a reasonable market price per share or in order
word it is not being overvalued or undervalued. However, event both of the companies have
strong position in the industry, the fall in the P/E ratios shall be investigated.
Price to book:

Figure 20: Trend of Price to Book Ratio

This ratio measures a company's market price in relation to its book value. The ratio shows
how much equity investors are paying for each dollar in net assets. It also indicates whether or not
a company's asset value is comparable to the market price of its stock. For this reason, it can be
useful for finding value stocks. Referring to Maxis, the average is 9.6 over the five years. The ratio
is quite stable but there is a decline trend by 3.1 in the year 2017.
As for TM, the average is 3.2 over the 5 years in which compared to Maxis; the reportable
amount is 3 times lower. However, both companies are actually meeting the benchmark of 1.
Since the figure exceeding 1, there is possibility that the stock is overvalued due to the fact
that the company is doing very well. It is best to compare Market to Book ratios between
companies within the same industry. TM have to look back at their company stock value as
compared to Maxis, they’re lower. This is because lower ratio could mean there is something
wrong with the company. This could indicate that the company is paying too much for what would
be left if company went bankrupt.
Dividend payout:

Figure 21: Trend of Dividend Payout rate%

The dividend payout ratio measures the percentage of net income that is distributed to
shareholders in the form of dividends during the year. This ratio also shows the portion of profits
the company decides to keep funding operations and the portion of profits that is given to its
shareholders. Referring to Maxis, the average is 115.1% over the 5 years. The trends indicate that
dividend payout are not consistent after 2015 as it the ratio decline almost half the previous year
payout. This is also might happened because the cash dividend per share from 40 sen to 20 sen
after year 2014.
As for TM, the average is 99.6%. Even it is reporting a lower percentage as compared to
Maxis; their dividend payout is more consistent except for the year 2017 as there is major drop by
In this case, a single high payout ratio does not give an impactful meaning unless the
figures are significant. It is always good to have a consistent dividend payout over the years. As
for Maxis, the investors have to be careful because the trend is downward sloping over the 5 years.
This might signaling that Maxis might not be able to pay or meet high dividend payout and also
might indicate that there is poor operating performance.
4. Assumptions

I. Level of Economic Activity

There are many key economic indicators that can be used to project the company performance
figure especially in term of sales. One of the indicators is GDP growth. GDP growth would
represent the overall movement of the goods and services produced within Malaysia over a period
of time. Based on Malaysian Development Investment Authority, MIDA forecast, the GDP growth
projected is around 5.0%-5.5% in the year 2018. The forecasted growth is slightly lower than
previous year which is around 5.2%-5.7%. Despite of lower forecast of growth, the GDP expected
to be earned is higher which is RM1228.8 billion compared to RM1168.4 billion in 2016.
Alongside with the good GDP indicators, the telecommunication industry is also expected
to keep growing. This is supported by the government role in its 11th Malaysia Plan that had set a
goal to increase the industry contribution to GDP to 17% and as of now, the industry contribution
to GDP is 13.1%. This is a possible goal because the industry is prone to the future growth include
cloud services, software development and big data analytics which would open tones of
opportunity in the industry.
In term of market capitalisation, the financial and utilities industry is ahead of
telecommunication industry over the past three years. The market capitalisation is important to
gauge the growth and also the risk potential. As for Maxis the market capitalisation has grown
about 4.4% even they ranked lower this year as shown in the figure below.
Maxis is actually at a good and stable position to grow further due to the fact that there is
positive GDP forecast, higher GDP expected to be earned, intensive government assistant to boost
the industry performance and also the consistent and stable of market capitalization in the industry.

II. The competitive landscape

Another factor that needs to be considered is the competitiveness within the

telecommunication industry. In Malaysia, the industry is dominated by fives big Telco companies
which are Axiata, Maxis, Digi, TM and also TIME. The competition in the industry is actually
intense as everyone is competing to provide the cheapest package and service to their customers.
Historically, Maxis and Celcom are actually dominating subscription market share about 40% in
2008 but then over the years their market share have been declining as their competitors are
catching up. As of now, Digi is leading in the subscription area with 27%, followed by Maxis 26%
and Celcom at 22%. One thing to be aware is the fast-growing Telco provider which is U Mobile
in which it market share have increase from 1% in 2009 to 14% in 2017. This has proved how
intense the market right now and the future also would be more critical. The illustrative figure
could be seen in the figure below:

In the other side is in term of fixed broadband or Fibre-optic network the biggest market
share is owned by the giant company which is TM at 92%. TM is the only one who has its own
fibre optic that provide internet to home and customers. This might happen because of their status
as one of the GLCs in which they are various mega scale project that they’re involved in such
High-Speed Broadband Project phase 1 and 2. The biggest competitor of TM right now is actually
Maxis and TIME. TIME have built its own network and work with other fibre providers while
Maxis rely solely on TM’s HSBB for access.
The competition in the fixed broadband industry will be further intensified with TNB is
joining the industry by offering its own fibre-optic cable to the Telco players. With this, the
competition would definitely drive the price down in the future and also would increase the
efficiencies in term of network operation, speed and capacity. Telco players including Maxis
should be aware of this presence as they could take advantage of this and develop comprehensive
strategy to compete within this industry segment.

III. Assumption on line items of Income Statement of Maxis Berhad

Items 2017(RM) 2016(RM) 2015(RM) 2014(RM) 2013(RM) Avg.

Sales/Revenue 8,696 8,612 8,601 8,389 9,084

Sales Growth(%) 0.98% 0.13% 2.53% -7.66% -1.01%

Less: Cost of sales 2,940 2,722 2,728 2,707 3,089

COGS/SALES(%) 33.809 31.607 31.717 32.268 34.005 32.68

Gross Income 5,757 5,890 5,873 5,682 5,995

GP/SALES(%) 66.20 68.39 68.28 67.73 66.00 67.32

Less: Operating expenses 2,390 2,747 3,009 2,875 3,177

OE/Sales (%) 27.48 31.90 34.98 34.27 34.97 32.72

ADD: Operating Income 3,367 3,143 2,864 2,807 2,819

OI/Sales(%) 38.72 36.50 33.30 33.46 31.03 34.60

Less: Interest Expense 135 171 198 247 228

Interest Expense Growth (%) -21.05 -13.64 -19.84 8.33 -11.55

Other income/(Expenses) -337 -236 -206 -123 -94

Income before Taxes 2,894 2,737 2,461 2,436 2,496

Less: Provision for income 702 724 713 711 724

Provision for income 0.242570836 0.264523201 0.289719626 0.291871921 0.290064103 0.276

taxes/pretax income

Net Income from continuing 2,192 2,013 1,747 1,725 1,772


Other 0 1 -8 -7 -7

Net Income 2,192 2,013 1,739 1,717 1,765

Table 2: Assumption on Income Statement of Maxis (Figures in Millions)

From Table 2, it can be seen that the average % of sales growth over the five years period
is negative 1.01% which helps us to assume that there will be decrease in sales growth by 1.01%.
On the other hand, the cost of goods sold to percentage of sales over the five years is 32.68 which
is the basis of assuming COGS will increase by 32.68% for the coming years. Next is the average
gross profit to sales percentage of 67.32 which is the base to assume that the GP for the upcoming
years will increase by 67.32%. Moreover, the average operating expense to sales and operating
income to sales % are subsequently 32.72 and 34.60 which are the basis to say that operating
expense and income both will rise by 32.72 and 34.60% consecutively. On the other hand, the
average interest expense growth is negative 11.55% over the five years which helps us to assume
that interest expense to the following years will decrease by 11.55%. Furthermore, the average
ratio of provision for income taxes to pretax income over the five years period is 0.276 which is
the base to assume that the following provisions for income taxes will increase by 0.276.
IV. Assumption on line items of Balance sheet of Maxis Berhad
Assets: 2017(RM'00 2016(RM'0 2015(RM'0 2014(RM'0 2013(RM'0 AVG.
0) 00) 00) 00) 00)

Current assets:

Cash and cash 602,127 682,346 1,296,448 1,530,519 807,946


Cash Turnover ratio 13.54 8.7 6.08 7.17 10.23 9.14

Trade receivables 918,234 958,210 688,476 571,797 622,034

Account receivables 5.5 6.15 7.86 8.75 9.72 7.60


Inventories 4494 5,942 13,247 12,440 70,433

Inventory Growth(%) -24.37% -55.14% 6.48% -82.34% -38.84%

Other current assets 717220 811,380 820,226 463,373 351,745

OCA/TCA 0.319891 0.330114 0.291026 0.179732 0.189911 0.26

Total current assets 2,242,075 2,457,878 2,818,397 2,578,129 1,852,158

Non-current assets:

PPE 4,841,261 4,502,020 4,227,252 4,008,811 4,038,431

Cap Ex as a % of Sales 22.40% 21.58% 21.87% 14.74% 8.89% 17.90%

Intangible assets 11,354,176 11,296,627 11,267,127 11,176,121 11,166,578

Intangible assets/Total 0.589851103 0.57509451 0.59347693 0.61713765 0.64436499 0.60


Other Non-current assets 811,712 1,386,554 672,169 346,547 272,418

ONCA/TA 0.047727694 0.08068302 0.04157776 0.02231255 0.01760098 0.042

Total Non-Current 17,007,149 17,185,201 16,166,548 15,531,479 15,477,427


Total Assets 19,249,224 19,643,079 18,984,945 18,109,608 17,329,585


Payables 1,554,947 1,705,750 1,539,047 1,100,825 493,975

Payables growth(%) -8.84% 10.83% 39.81% 122.85% 41.16%

short term borrowings 205,358 1,101,294 1,076,948 879,695 910,103

STB/TCL 0.052218281 0.22040841 0.22007567 0.21028994 0.24863186 0.19

Other Current liabilities 2,172,379 2,189,562 2,277,540 2,202,728 2,256,366

OCL/TCL 0.552390937 0.43820985 0.46541814 0.52655926 0.61641866 0.52

Total current liabilities 3,932,684 4,996,606 4,893,535 4,183,248 3,660,444

Non-current liabilities:

Long term borrowings 7,439,936 8,762,728 8,800,704 8,118,389 6,613,172

LTB/TNCL 0.899126233 0.88284345 0.89158124 0.88352906 0.86420427 0.88

Other long term liability 834,693 1,162,846 1,070,190 1,070,204 1,039,153

OLTL/TNCL 0.100873767 0.11715654 0.10841875 0.11647093 0.13579572 0.12

Total non-current 8,274,629 9,925,574 9,870,894 9,188,593 7,652,325


share capital 2,468,942 751,031 750,998 750,658 750,345

Reserves 4,572,969 3,969,868 3,439,017 3,964,747 5,251,491

R/TE 0.649393183 0.84091356 0.82076484 0.83683874 0.87280232 0.80

Total equity 7,041,911 4,720,899 4,190,015 4,737,767 6,016,816

Total E&L 19,249,224 19,643,079 18,984,945 18,109,608 17,329,585

Table 3: Assumption on Balance sheet items of Maxis

By referring to table 3, the following assumptions on Balance sheet item have been made:
● Cash and cash equivalents: It is estimated based on average cash turnover ratio of five
years which is expected to be 9.144 in future.
● Trade receivables: It is estimated based on average accounts receivables turnover of five
years which is expected to be 7.596 in future.
● Inventories: It is estimated based on average inventory growth of five years which is
expected to be -38.84%.
● Other current assets: It is estimated based on average of other current asset to total current
asset ratio of five years which is 0.261.
● PPE: It is estimated based on average of capital expenditure to % of sales which is 17.89%.
● Intangible assets: It is estimated based on the average of total intangibles to total current
asset of five years which is 0.604.
● Other Non-current assets: It is estimated based on average of other non-current asset to
total asset ratio of five years which is 0.042
● Payables: It is estimated based on average payables growth of five years which is 41.16%.
● Short Term borrowings: It is estimated based on average short term borrowing to total
current liabilities ratio of five years which is 0.19.
● Other current liabilities: It is estimated based on the average other current liabilities to total
current liabilities ratio which is expected to be 0.52.
● Long term borrowings: It is estimated based on the average of long term borrowings to
total non-current liabilities over five years period which is expected to be 0.88.
● Other long term liability: It is estimated based on average of other long term liability to
total noncurrent liability over five years which is expected to be 0.12.
● Reserves: It is estimated based on the average reserves to total equity ratio of five years
which is 0.80.

5. Crucial Factors
Quantitative factors
1- Revenue performance:

Figure 22: Revenue performance

Over the five years Maxis average revenue is around RM 8.676 billion. There is significant
drop in the year 2014 but then they manage to be able to consistently maintain their revenue after
the drop. The drop is due to the fact that the industry is in intense competition as discussed in the
assumptions part.
One point to be aware with is that, the ability of Maxis to sustain their revenue like how
they did in the year 2015-2017. Even they do not rank first in aggregate but they did dominate the
Average Revenue Per User in the Telco industry as illustrated below:

The reason why Maxis is leaders in ARPU is because it reflects that most of its subscribers
are in premium and high-price plan compared to its peers which is mainly driven from its postpaid
plans. Notably, Maxis postpaid ARPU was at RM102 in 2017. In contrast, Celcom and Digi
postpaid ARPU was at RM84 and RM78 respectively.

2- Operating Profit EBITDA:

Figure 23: Operating profit EBITDA Trend
Over the five years the average EBITDA is RM4.426 billion. As illustrated above the
EBITDA performance showing an uptrend slope which is a good signal in term of the company
financial health. This higher EBITDA is due to the lower capital expenditure being reported in the
industry as whole in which will be discussed further.
The figures also have beaten its peer performance like Celcom, Digi, TM and TIME in
both mobile and fixed segments. Based on data obtained by MCMC, EBITDA margin is at 54%
whilst their competitors like Celcom and Digi are at 36% and 45% respectively. As for fixed
services the average is around 30% due to the high cost incurred for network expansion and also
maintenance. The detail figures are illustrated as below:

3- Capital Expenditure:

Figure 24: CAPEX Trend

The average of CAPEX over the five years is 1.1 billion. Why CAPEX is part of critical
factors is because in telecommunication industry they would incurred high cost in term of network
extension and also cost of maintenance. CAPEX may not be charged directly to Income Statement
as it will be charge as depreciation over time but then the maintenance would be charged to
Income Statement in which would later on reducing the revenue gained. In Maxis, CAPEX was
mainly for investments in network capacity expansion, as they focused on enhancing their superior
quality network to enable their customers to continue enjoying a differentiated digital experience.
As overall industry, CAPEX allocation has drop to 6 billion from 6.98 billion in 2016. The
drop is due to the fact that Telco provider shifts the CAPEX to spend on software rather than only
spending for network expansion and maintenance. The drop in CAPEX also has cause the
company to report higher revenue and EBITDA as shown previously. The figure is illustrated in
details as below:

Qualitative factors

The elephant in the room to be addressed is that Maxis Berhad always has the upper hand
in the industry because of the early subscriptions from the users. This advantage was taken when
Maxis was one of the early player in the game when there wasn’t much competitors. The reason of
mentioning this is because, as we all know, changes among people are hard. A lot of people like to
stay inside their comfortable bubbles as long as there is not too much trouble. Observations show
that a lot of time people have better offer from various competitors but the hardest thing is for
them to change the customer and make them change their line to another line of
telecommunications. This is a huge advantage Maxis holds among their subscribers and

Training and Development of Directors

One thing to consider is company's management, including their educational and

professional backgrounds. One of the most important factors is their experience in the industry.
From the corporate governance statement, Maxis Berhad claimed to provide training and
development of directors regarding its industry and programmes. This could show us that the
decision makers have more strength and also leads to have more legitimate contribution to make
for the company.

Culture In Workplace

From the analysis of workers that has been working with maxis for more than a year, lots
of responses indicates a positive reaction towards the company workplace experienced. This is
crucial to know for the company performance based on qualitative side, as the more satisfied
workers and employees inside the company the better they can provide for customer satisfaction in
a long run.

Market structure
Maxis Berhad is categorized as inside oligopoly market. This means that the market has a
very few sellers which dominated by a few large firms. It deals with homogenous as well as
Differentiated product. The market entry barriers are difficult. Thus price is relatively elastic. This
analysis could show investors from the perspective of qualitative point of view. Oligopoly has lots
of good advantages for the company and also disadvantages to be considered, among the few
examples are:
1. High Profits
Since there is such little competition, the companies that are involved in the market have the
potential to bring a large amount of profits. The services and goods that are controlled through
oligopolies are generally highly needed or wanted by the large majority of the population.

2. Simple Choices
Having only a few companies that offer the goods or service that you are looking for makes it easy
to compare between them and choose the best option for you. In other markets it can be difficult to
thoroughly look at all of the competitors to compare pricing and services offered.

1. No Fear Of Competition
Often times the companies that are in the oligopoly market become very settled with their
business. The profits and the way they run are guaranteed to work, so they no longer feel the need
to come up with creative or innovate new ideas.

From the information above, we could conclude that Maxis Berhad is on the upper hand in
this market as there are only few competitors. But on the other hand, the disadvantage of the
company has no fear of competition is bad for the performance cause they might slack of work and
getting demotivated. Although in this case, over the years there are more competitors managed to
break through the market, and reduce this problem to happen.

SWOT analysis

- High network quality and customer service
- Experienced management team
- The oldest and biggest in term of size and technology
- Strong and effective distribution network around Malaysia
- Rural area cannot reach the network
- Need to pay for maxis customer service
- Have hidden charges for postpaid and broadband
- Does not offer triple pay of mobile broadband and pay TV
- Underserved broadband population offer great growth opportunity
- Potential for triple play if combined with provider
- New mobile devices
- Ability to expand their business to international level
- Under competitive pressures
- Aggressive broadband promotion by wireless connection
- Regulatory hurdles

6. Inferences
Forecasted Income Statement of Maxis Berhad

2018(RM) 2019(RM)
Items 2017(RM) Forecasted Forecasted

Sales/Revenue 8,696 8,609 8,523

Less: Cost of sales 2,940 3,901 5,176

Gross Income 5,757 4,708 3,347

2,390 3,172 4,210

Less: Operating expenses

ADD: Operating Income 3,367 4,532 6,100

Less: Interest Expense 135 119.4075 105.6159338

Other income/(Expenses) -337 -337 -337

Income before Taxes 2,894 5,612 4,795

Less: Provision for income

Taxes 702 895.752 1142.979552

Net Income from continuing

operation 2,192 4,716 3,652

0 0 0

2,192 4,716 3,652

Net Income
Table 4: Forecasted Income Statement of Maxis (in Millions)

By referring Table 4, it can be ascertained that the forecasted gross profit is predicted
to decrease to RM4708 from RM5757 in 2018 . This adverse effect is due to increase in predicted
COGS which will adversely impact on the gross profit margin which would be 54.69%(Predicted).
This shows a decrease in GPM by 11.51% compared to 2017. However, the forecasted COGS will
be worse in 2019 and increase up to RM 5176, thus declining further gross profit to RM 3347.

However, their predicted operating income is going to increase up to RM6100 in 2017

from RM3367 in 2017. Also the forecasted interest expenses is going to decline which in turn
increase the forecasted Net profit up to RM3652 in 2019 from RM2192 in 2017. But the forecasted
net profit in 2018 will be higher compared to the forecast in 2019 due to higher forecasted
operating expense. The predicted NPM is 54.78% in 2018 and 42.85% in 2019.
Forecasted Balance sheet of Maxis Berhad

2018(RM'000) 2019(RM'000)
Assets: 2017(RM'000) Forecasted Forecasted

Current assets:

Cash and cash equivalents 602,127 941,904 932,495

Trade receivables 918,234 1,132,763 930,459

Inventories 4494 2,749 1,681

Other current assets 717220 903,697 1,138,658

Total current assets 2,242,075 2,981,113 3,003,293

Non-current assets:

PPE 4,841,261 5,707,847 6,729,551

Intangible assets 11,354,176 18,166,682 29,066,691

Other Non-current assets 811,712 845,804 881,328

Total Non-Current assets 17,007,149 24,720,332 36,677,570

Total Assets 19,249,224 27,701,445 39,680,863


Payables 1,554,947 2,194,963 3,098,410

short term borrowings 205,358 244,376 290,807

Other Current liabilities 2,172,379 2,302,016 2,499,064

Total current liabilities 3,932,684 4,741,355 5,888,281

Non-current liabilities:

Long term borrowings 7,439,936 11,324,948 15,460,181

Other long term liability 834,693 934,856 1,047,039

Total non-current liabilities 8,274,629 12,259,804 16,507,220


share capital 2,468,942 2,468,942 2,468,942

Reserves 4,572,969 8,231,344 14,816,420

Total equity 7,041,911 10,700,286 17,285,362

Total E&L 19,249,224 27,701,446 39,680,863

Table 5: Forecasted Balance Sheet of Maxis

By referring to figure 1, the forecasted balance sheet of Maxis ascertains that their
predicted total assets is going to increase up to RM39,680,863 by 2019. After calculating the Total
assets turnover ratio, it is seen that in 2018 the predicted turnover is 0.311 and in 2019, it is 0.215. This
means their future ability to generate sales from its assets is going to be affected. However, the cash
and cash equivalents show a better estimated balance for future in comparison with 2017 which
might give them advantage over their most liquid asset and increase the ability to meet short term
borrowings. On the other hand, their estimated trade receivables turnover in 2018 is 7.6 and in
2019 is 9.16. These figures are comparatively higher compared to past figures. This could mean
that Maxis going to have better customer collection in future.

On the other hand, Maxis’s payables is predicted to increase further by 2019 along with
short term and long term borrowings. After calculating the estimated current ratio, it is seen that in
2018 it will be 0.63 and in 2019 0.51. These figures are still at par with the historic ratios which
means that even if Maxis’s borrowings are predicted to increase; their ability to meet them is also
Furthermore, if we look into the total debt to equity ratio in 2018 and 2019 which is 1.59 and
1.30. These figures are more in comparison with 2017 which means their debt financing is
predicted to increase in coming years which could increase risk. However, their past figures were
even more than what has been predicted in future. This could give them the confidence on
capitalizing on debt properly.

To sum up, from the quantitative point of view, the future profit of Maxis is favorable. Even
though their future payables and debts are adversely affected, better profit margin and better
customer collection could still be giving maxis the level of confidence to deal with their negative
variables. Also, they must have an eye on their asset utilization in order for them to have better
utilization to generate more sales. However, predictions are predictions which are totally based on
assumptions and historic figures which may or may not happens. Maxis still have to consider their
qualitative aspects before planning or formulating any strategies. From quantitative point of view,
they have the biggest strength of strong and effective distribution network around Malaysia and
opportunities to produce new mobile devices and enter new markets. This could enhance their
future sales and generate more revenue to balance off their liabilities and debts. Also the market
structure of Maxis is Oligopolistic which can always give them the desired advantage with any
new things that they want to come up with. Therefore, it is thoroughly understood that
performance and strategies should always be justified by considering both qualitative and
quantitative aspects.