1.

0 NAME OF COMPANY AND ADDRESS

1.1 AJINOMOTO MALAYSIA BERHAD
Name of company: Ajinomoto Malaysia Berhad
Reg. No.: 0004295W
Address: Lot 5710, Jalan Kuchai Lama, Petaling, 58200 Kuala Lumpur, Malaysia
Industry: Manufacturing and Selling AJI-NO-MOTO Products and other Seasoning
and Food Items

1.2 ORIENTAL FOOD INDUSTRIES HOLDING BERHAD

Name of company: Oriental Food Industries Holding Berhad
Reg. No.: 0038289A
Address: No. 65, Jalan Usaha 7, Air Keroh Industrial Estate, 75450 Melaka, Malaysia
Industry: Manufacturing and Marketing of Biscuits, Cakes, Snack Food and
Confectioneries

2.0 STOCK PRICE AND PERFORMANCE

2.1 LIQUIDITY RATIO

Liquidity ratio is a type of financial ratio used to determine a company’s ability to
pay its short-term debt obligations. The metric helps determine if a company can use
its current, or liquid, assets to cover its current liabilities.
Three liquidity ratios are commonly used – the current ratio, quick ratio, and net
working capital. In each of the liquidity ratios, the current liabilities amount is placed
in the denominator of the equation, and the liquid assets amount is placed in the
numerator.

2.2 CURRENT RATIO

Current ratio provides an indication of the extent to the firm’s liquidity, that is how
far the claims of short-term creditors are covered by current assets.
 AJINOMOTO MALAYSIA BERHAD

YEAR 2016 2017 2018 2019 2020

Current Asset RM259,596,499 RM441,375,721 RM400,659,886 RM455,722,690 RM391,393,229
Current Liabilities RM46,764,061 RM45,327,601 RM37,451,218 RM56,116,876 RM71,254,089
Ratio 5.55 times 9.74 times 10.70 times 8.12 times 5.49 times

Analysis:

Current Ratio
12

10

0
2016 2017 2018 2019 2020

RATIO

i. For 2016, it shows that the company’s ability to pay is RM5.55 for RM1 of its
short-term liability.
ii. For 2017, it shows that the company’s ability to pay is RM9.74 for RM1 of its
short-term liability.
iii. For 2018, it shows that the company’s ability to pay is RM10.70 for RM1 of
its short-term liability.
iv. For 2019, it shows that the company’s ability to pay RM8.12 for RM1 of its
short-term liability.
 v. For 2020, it shows that the company’s ability to pay RM5.49 for RM1 of its
short-term liability.
vi. Overall, the year 2018 has better performance compared to the year 2016,
2017, 2019 and 2020 as the company has the increase in the liquidity of its
assets to meet short-term obligations due within one year. The ratio that more
than one indicates that the company has good financial resources and good
performance to settle down its short-term obligations such as current debt.

ORIENTAL FOOD INDUSTRIES HOLDING BERHAD

YEAR 2016 2017 2018 2019 2020

Current Asset RM118,184,063 RM102,480,661 RM102,278,302 RM106,944,919 RM104,233,090
Current Liabilities RM35,084,235 RM37,564,995 RM48,347,442 RM44,406,149 RM34,135,109
Ratio 3.37 times 2.73 times 2.12 times 2.41 times 3.05 times

Analysis:

Current Ratio
4

3.5

2.5

1.5

0.5

0
2016 2017 2018 2019 2020

i. For 2016, it shows that the company’s ability to pay is RM3.37 for
RM1 of its short-term liability.
ii. For 2017, it shows that the company’s ability to pay is RM2.73 for
RM1 of its short-term liability.
 iii. For 2018, it shows that the company’s ability to pay is RM2.12 for
RM1 of its short-term liability.
iv. For 2019, it shows that the company’s ability to pay is RM2.41 for
RM1 of its short-term liability.
v. For 2020, it shows that the company’s ability to pay is RM3.05 for
RM1 of its short-term liability.
vi. Overall, the year 2016 has better performance compared to the year
2017, 2018, 2019 and 2020 as the company has the increase in the
liquidity of its assets to meet short-term obligations due within one
year. The ratio that more than one indicates that the company has good
financial resources and good performance to settle down its short-term
obligations such as current debt.

2.3 QUICK RATIO

It also known as the Acid-test ratio. This is a measure of a firm’s ability to pay off its
short-term obligations without having to rely on the sale of inventory and prepaid,
that tends to be the least liquid of the current assets.

AJINOMOTO MALAYSIA BERHAD

YEAR 2016 2017 2018 2019 2020

Current Asset RM259,596,499 RM441,375,721 RM400,659,886 RM455,722,690 RM391,393,229
Inventory RM53,309,443 RM61,501,284 RM45,743,251 RM44,632,081 RM53,729,281
Current Liabilities RM46,764,061 RM45,327,601 RM37,451,218 RM56,116,876 RM71,254,089
Ratio 4.41 times 8.38 times 9.48 times 7.33 times 4.74 times

Analysis:

Quick Ratio
10
9
8
7
6
5
4
3
2
1
0
2016 2017 2018 2019 2020

i. For 2016, it shows that the company’s ability to pay without having to rely on
illiquid current assets is RM4.41 for RM1 of its short-term liability.
ii. For 2017, it shows that the company’s ability to pay without having to rely on
illiquid current assets is RM8.38 for RM1 of its short-term liability.
iii. For 2018, it shows that the company’s ability to pay without having to rely on
illiquid current assets is RM9.48 for RM1 of its short-term liability.
iv. For 2019, it shows that the company’s ability to pay without having to rely on
illiquid current assets is RM7.33 for RM1 of its short-term liability.
v. For 2020, it shows that the company’s ability to pay without having to rely on
illiquid current assets is RM4.74 for RM1 of its short-term liability.
vi. Hence, the year 2018 has better performance compared to the year 2016,
2017, 2019 and 2020 in term of the company ability to pay it short-term
obligation without having to rely on its illiquid current assets. This ratio
excluded the inventory from the assets because the company need to give
 discount to the customer to buy quickly in order to finish it below 90 days if
they wish to liquidate the asset through the inventory.

ORIENTAL

YEAR 2016 2017 2018 2019 2020

Current Asset RM118,184,063 RM102,480,661 RM102,278,302 RM106,944,919 RM104,233,090
Inventory RM20,881,740 RM25,957,155 RM29,144,894 RM38,240,307 RM35,959,641
Current Liabilities RM35,084,235 RM37,564,995 RM48,347,442 RM44,406,149 RM34,135,109
Ratio 2.77 times 2.04 times 1.51 times 1.55 times 2.00 times

Analysis:

Quick Ratio
3

2.5

1.5

0.5

0
2016 2017 2018 2019 2020

RATIO

i. For 2016, it shows that the company’s ability to pay without having to rely on
illiquid current assets is RM2.77 for RM1 of its short-term liability.
ii. For 2017, it shows that the company’s ability to pay without having to rely on
illiquid current assets is RM2.04 for RM1 of its short-term liability.
iii. For 2018, it shows that the company’s ability to pay without having to rely on
illiquid current assets is RM1.51 for RM1 of its short-term liability.
iv. For 2019, it shows that the company’s ability to pay without having to rely on
illiquid current assets is RM1.55 for RM1 of its short-term liability.
 v. For 2020, it shows that the company’s ability to pay without having to rely on
illiquid current assets is RM2.00 for RM1 of its short-term liability.
vi. Hence, the year 2016 has better performance compared to the year 2017,
2018, 2019 and 2020 in term of the company ability to pay it short-term
obligation without having to rely on its illiquid current assets. This ratio
excluded the inventory from the assets because the company need to give
discount to the customer to buy quickly in order to finish it below 90 days if
they wish to liquidate the asset through the inventory.

2.4 NET WORKING CAPITAL

It is commonly accepted as the absolute measure of the firm’s liquidity since it
measures solvency in terms of Ringgit and no ratio. Positive Net Working Capital
indicates the amount of current assets that are financed with long-term financing. On
the other hand, if the Net Working Capital is negative, it represents the amount of
fixed assets that are financed with current liabilities.

AJINOMOTO MALAYSIA BERHAD

YEAR 2016 2017 2018 2019 2020

Current Asset RM259,596,499 RM441,375,721 RM400,659,886 RM455,722,690 RM391,393,229
Current Liabilities RM46,764,061 RM45,327,601 RM37,451,218 RM56,116,876 RM71,254,089
Ratio RM212,832,438 RM396,048,120 RM363,208,668 RM399,605,814 RM320,139,140

Analysis:
 Net Working Capital
RM,450,000,000
RM,400,000,000
RM,350,000,000
RM,300,000,000
RM,250,000,000
RM,200,000,000
RM,150,000,000
RM,100,000,000
RM,50,000,000
RM,0
2016 2017 2018 2019 2020

RATIO

i. For 2016, the net working capital is RM212,832,438 derived from the
difference of its current assets and current liabilities.
ii. For 2017, the net working capital is RM396,048,120 derived from the
difference of its current assets and current liabilities.
iii. For 2018, the net working capital is RM363,208,668 derived from the
difference of its current assets and current liabilities.
iv. For 2019, the net working capital is RM399,605,814 derived from the
difference of its current assets and current liabilities.
v. For 2020, the net working capital is RM320,139,140 derived from the
difference of its current assets and current liabilities.
vi. Overall, the increase in the company net working capital from
RM212,832,438 in 2016 to the RM396,048,120 in 2017 and from
RM363,208,668 in 2018 to the RM399,605,814 in 2019 indicate that the
company is relatively liquid and able to meet its short-term obligations as it
come due. The increase in net working capital shows that the company have
good financial health and efficient in its business operational. Thus, it can
have the potential to invest and grow and able to pay back creditors. In the
2017 has decrease from RM396,048,120 to RM363,208,668 in 2018 and also
decrease RM399,605,814 in 2019 to RM320,139,140 in 2020.
 ORIENTAL

YEAR 2016 2017 2018 2019 2020

Current Asset RM118,184,063 RM102,480,661 RM102,278,302 RM106,944,919 RM104,233,090
Current Liabilities RM35,084,235 RM37,564,995 RM48,347,442 RM44,406,149 RM34,135,109
Ratio RM83,099,828 RM64,915,666 RM53,930,860 RM62,538,770 RM70,097,981

Analysis:

Net Working Capital

RM,90,000,000
RM,80,000,000
RM,70,000,000
RM,60,000,000
RM,50,000,000
RM,40,000,000
RM,30,000,000
RM,20,000,000
RM,10,000,000
RM,0
2016 2017 2018 2019 2020

RATIO

i. For 2016, the net working capital is RM70,987,00 derived from the difference
of its current assets and current liabilities.
ii. For 2017, the net working capital is RM70,987,00 derived from the difference
of its current assets and current liabilities.
iii. For 2018, the net working capital is RM70,987,00 derived from the difference
of its current assets and current liabilities.
iv. For 2019, the net working capital is RM70,987,00 derived from the difference
of its current assets and current liabilities.
v. For 2020, the net working capital is RM70,987,00 derived from the difference
of its current assets and current liabilities.
vi. Overall, the increase in the company net working capital from RM53,930,860
in 2018 to the RM70,097,981 in 2020 indicate that the company is relatively
liquid and able to meet its short-term obligations as it come due. The increase
in net working capital shows that the company have good financial health and
efficient in its business operational. Thus, it can have the potential to invest
and grow and able to pay back creditors. In the 2016 has decrease from
RM83,099,828 to RM53,930,860 in 2018.