FACULTY BUSINESS AND MANAGEMENT

BACHELOR OF BUSINESS ADMINISTRATION (HONS) FINANCE

FIN658 - FINANCIAL STATEMENT ANALYSIS

GROUP ASSIGNMENT:
FINANCIAL REPORT

PREPARED FOR:
DR NURAZLEENA BINTI ISMAIL

PREPARED BY:

NAME STUDENT ID

ADELINA AZURA BINTI MUSADIK 2021864964

NUR AZEFFAH BINTI ROSLI 2021849418

NUR NAJWA ATHIRAH BINTI MAT ZAID 2021858518

NUR RAISA ADELIN BINTI RUSLAN 2021833922

WAN NUR FATEHAH BINTI WAN MOHD SOGHIR 2021464948

D2BA2425B

SUBMISSION DATE:

13 JULY 2023
 Acknowledgement
Syukur Alhamdulillah and Thank you, Allah SWT, for providing us with the fortitude and
time necessary to complete our assignment within the deadline set by our dear lecturer Dr.
Nurazleena Binti Ismail. Without her assistance and direction, we might not have been able to
finish this group report. She gives us guidance and encourages us while we work on this report
from beginning to end. We sincerely appreciate what she has taught us over the course of this
semester, making it simpler for us to apply it to this report.

Next, we would like to thank everyone who has helped us, both directly and indirectly, in
the process of finishing this report. We especially wanted to express our gratitude to BA242 5B,
who has consistently supported and encouraged me throughout this semester in all of the
assignments and assessments that the lecturers have given. Last but not least, we want to
specifically thank our family for their unending love and support while we worked to finish this
report. This report would never have been finished without their help and encouragement. We
are grateful.

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 TABLE OF CONTENTS

Acknowledgement.......................................................................................................... 2
1.1 INTRODUCTION........................................................................................................ 4
1.2 COMPANY BACKGROUND..................................................................................5
1.2.1 KPJ HEALTHCARE SDN BHD................................................................................. 5
1.2.2 MEDI LIFESTYLE LIMITED......................................................................................6
1.3 VISION AND MISSION......................................................................................................7
1.4 BOARD OF DIRECTOR (BOD)......................................................................................... 8
2.1 FINANCIAL RATIO...................................................................................................10
2.2 Liquidity Ratios................................................................................................................ 10
2.3 Activity Ratios.................................................................................................................. 15
2.4 Profitability Ratios............................................................................................................ 19
2.5 Leverage Ratios...............................................................................................................23
3.1 COMPARATIVE ANALYSIS..................................................................................... 27
3.2 YEAR-TO-YEAR CHANGE OF BALANCE SHEET............................................ 27
3.3 YEAR-TO-YEAR CHANGE OF INCOME STATEMENT..................................... 30
4.1 COMMON SIZE ANALYSIS..................................................................................... 32
4.2 COMMON SIZE ANALYSIS OF BALANCE SHEET............................................32
4.3 COMMON SIZE ANALYSIS OF INCOME STATEMENT.....................................35
5.0 IMPROVEMENT AND RECOMMENDATION.......................................................... 37
6.0 CONCLUSION..........................................................................................................39
REFERENCES............................................................................................................................ 40
APPENDICES............................................................................................................................. 41

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1.1 INTRODUCTION

We are pleased to present the financial analysis report for KPJ Healthcare and Medi
Lifestyle Limited. This comprehensive report aims to provide a detailed evaluation of the
companies’ financial performance, assess their financial health, and offer valuable insights to
assist in informed decision-making.

In today's dynamic business environment, it is crucial for stakeholders, investors, and

management to have a comprehensive understanding of a company's financial position. The
objective of this analysis is to delve into the key financial indicators, ratios, and trends that can
help gauge the company's overall performance and its ability to generate sustainable growth
and profitability.

The report comprises an assessment of the company's financial statements, including

the income statement and balance sheet, for the 5 years period from 2018 to 2022. By
analyzing these financial statements and employing various financial ratios and metrics, we
have conducted a comprehensive review of the company's liquidity activity, profitability, and
leverage ratio.

Additionally, this report also provides a comparative analysis of these companies

financial performance against industry benchmarks, enabling a better understanding of its
competitive positioning and industry trends. This comparison will help identify areas of strength
and potential areas for improvement.

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1.2 COMPANY BACKGROUND

1.2.1 KPJ HEALTHCARE SDN BHD

KPJ Healthcare Berhad is a leading private healthcare provider in Malaysia. The

company was established in 1981 and is part of the Johor Corporation Group. KPJ
Healthcare operates a network of hospitals, medical centers, and healthcare facilities
across Malaysia, offering a wide range of medical services and specialties.

The company's primary focus is on providing quality healthcare services to both

local and international patients. KPJ Healthcare operates under the principle of
patient-centered care, striving to deliver personalized and comprehensive medical
treatments to meet the diverse needs of individuals and communities.

KPJ Healthcare has a strong presence in Malaysia, with a network of hospitals

and healthcare centers strategically located in various states. The company is known for
its state-of-the-art facilities, advanced medical technologies, and highly skilled medical
professionals. The services provided by KPJ Healthcare encompass various medical
disciplines, including general medicine, surgery, pediatrics, obstetrics and gynecology,
cardiology, oncology, orthopedics, and many more.

In addition to its healthcare services, KPJ Healthcare is also involved in

healthcare education and training. The company operates its own nursing college, KPJ
Healthcare University College, which offers programs in nursing and allied health
sciences.

KPJ Healthcare is committed to continuous improvement and innovation in

healthcare delivery. It strives to maintain high standards of patient care, safety, and
satisfaction. The company's mission is to be the preferred healthcare provider and to
contribute to the well-being and betterment of society.

Overall, KPJ Healthcare has established itself as a reputable and trusted

healthcare provider in Malaysia, offering comprehensive medical services and
contributing to the advancement of the healthcare industry in the country.

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1.2.2 MEDI LIFESTYLE LIMITED

Medi Lifestyle Limited is a healthcare group that is dedicated to promoting

healing and well-being through its core services in healthcare and wellness. The
company initially ventured into health and wellness with the acquisition of postpartum
care services under the Nadora brand.

The company's primary goal is to establish and deliver a meaningful health care
value model that emphasizes high-quality care and meaningful engagement.
Recognizing the promising growth in the healthcare sector, Medi Lifestyle Limited is
constantly strategizing to identify growth opportunities in aesthetics, wellness, and
physiology services in the future.

Medi Lifestyle Limited has been listed on the Catalist Board of SGX-ST since
2011. In 2020, the company underwent a transformation from the oil and gas
engineering business to the provision of healthcare and wellness services. Currently, the
group operates a postpartum care center and a chiropractic and physiotherapy center at
SS2 Petaling Jaya, known as the "PJ Confinement Centre."

The company envisions providing high-quality healthcare services within Asia,

initially focusing on postpartum care services. Medi Lifestyle Limited consistently reviews
its plans and strategies for the healthcare sector and actively seeks out opportunities in
the field of aesthetics, wellness services, and physiology services.

Overall, Medi Lifestyle Limited aims to establish itself as a provider of exceptional

healthcare services, starting with postpartum care, while actively exploring other areas
within aesthetics, wellness, and physiology services.

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 1.3 VISION AND MISSION

COMPANIES VISION & MISSION

KPJ HEALTHCARE SDN BHD Our Vision is being THE PREFERRED

HEALTHCARE PROVIDER to our clients as
endeavor to be their lifelong companion
throughout their healthcare journey.

As we go all out to implement our Mission of

DELIVERING QUALITY HEALTHCARE
SERVICES and providing Par Excellence, we
remain committed to delivering world-class
client’s care with professionalism and an
undivided compassion to the countless
communities that we service.

MEDI LIFESTYLE LIMITED We’re on a mission to improve the health of

those we serve, committed to giving our
community the best possible healthcare and
wellness experiences.

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1.4 BOARD OF DIRECTOR (BOD)
● KPJ HEALTHCARE

DATUK MD ARIF BIN MAHMOOD

[Chairman, Non-Independent Non-Executive Director]

DATO’ MOHD REDZA SHAH MOHAMED RIDZA BIN KHAIRUDDIN BIN JAFLUS
BIN ABDUL WAHID MOHAMED ABDULLA
[Independent
[Senior Independent [Independent Non-Executive Director]
Non-Executive Director] Non-Executive Director]

HISHAM BIN ZAINAL LEE LAI FAN SHAMSUL ANUAr BIN

MOKHTAR ABDUL MAJID
[Independent and
[Independent and Non-Executive Director] [Non-Independent
Non-Executive Director] Non-Executive]

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ROZAINI BIN MOHD SANI PROF. DATO’ DR AZIZI BIN ANNIE BINTO ROSLE
HAJI OMAR
[Non-Independent [Non-Independent
Non-Executive Director] [Non-Independent Non-Executive Director]
Non-Executive Director]

● MEDI LIFESTYLE LIMITED

Dato' Low Koon Poh Harry Ng Kesavan Nair

("Dato' Low")
[Lead Independent Director] [Independent Director]
[Executive Director]

Carmen NG Tan Sri Ahmad

[Independent Director] [Independent Director]

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2.1 FINANCIAL RATIO

2.2 Liquidity Ratios

Liquidity ratios show how well a company can meet its short-term commitments. The current
ratio and the acid-test or quick ratio are two typical examples of liquidity ratios. The current ratio
is determined by dividing a company's current assets by its current obligations. This number
shows how well a company's current assets can cover its short-term debts. A current ratio of 1
or higher is usually good because it shows that a company has enough current assets to cover
its current obligations. The acid-test ratio is found by removing a company's inventory from its
current assets and dividing the result by its current liabilities. This ratio is more conservative
because it only looks at the company's most liquid assets. Most people think that a ratio of 1 or
higher is good because it shows that a company has enough liquid assets to cover its present
liabilities without using inventory.

● CURRENT RATIO = CURRENT ASSET / CURRENT LIABILITY

MEDILIFESTYLE HEALTHCARE

2022 2021 2020 2019 2018

CURRENT ASSET 1,390,954 2,727,639 2,572,664 5,543,710 22,428,374

CURRENT 8,372,213 8,800,615 11,080,255 19,390,156 34,319,340

LIABILITY

CURRENT RATIO 0.17 times 0.31 times 0.23 times 0.29 times 0.65 times

KPJ HEALTHCARE

2022 2021 2020 2019 2018

CURRENT ASSET 1,313,942 968,575 1,070,265 1,179,499 1,142,446

CURRENT 1,660,321 1,580,146 1,231,978 1,197,933 887,385

LIABILITY

CURRENT RATIO 0.79 times 0.61 times 0.87 times 0.98 times 1.29 times

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Analysis:
Medilifestyle:
Medi Lifestyle Healthcare's current ratio has been decreasing over the past 5 years. In
2022, the current ratio was 0.17 times, which means that the company had 17 cents in current
assets for every dollar in current liabilities. This is a very low current ratio, and it indicates that
Medi Lifestyle Healthcare may have difficulty meeting its short-term debt obligations.
In 2018, the current ratio was 0.65 times, which is a much healthier level. This means
that Medi Lifestyle Healthcare had 65 cents in current assets for every dollar in current liabilities.
However, the current ratio has been decreasing since then, which is a cause for concern.
There are a few possible reasons why Medi Lifestyle Healthcare's current ratio has been
decreasing. One possibility is that the company has been investing in long-term assets, such as
property or equipment. This would reduce the company's current assets and increase its current
liabilities, which would lower the current ratio.
Another possibility is that the company has been experiencing financial difficulties. If the
company is not generating enough cash flow to cover its short-term debt obligations, it may
have to sell some of its current assets to raise cash. This would also lower the current ratio.
It is important to note that the current ratio is just one measure of liquidity. Other factors,
such as the company's cash flow and debt-to-equity ratio, should also be considered when
assessing a company's liquidity position.
Overall, the decreasing current ratio of Medi Lifestyle Healthcare is a cause for concern.
The company may have difficulty meeting its short-term debt obligations if it does not improve its
liquidity position.

KPJ Healthcare:
The current ratio for KPJ Healthcare has been decreasing over the past 5 years. In
2022, the current ratio was 0.79 times, which means that the company had 79 cents in current
assets for every dollar in current liabilities. This is a relatively healthy level, but it is lower than
the current ratio of 1.29 times in 2018.
There are a few possible reasons why KPJ Healthcare's current ratio has been
decreasing. One possibility is that the company has been investing in long-term assets, such as
property or equipment. This would reduce the company's current assets and increase its current
liabilities, which would lower the current ratio.

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 Another possibility is that the company has been experiencing financial difficulties. If the
company is not generating enough cash flow to cover its short-term debt obligations, it may
have to sell some of its current assets to raise cash. This would also lower the current ratio.
The decreasing current ratio of KPJ Healthcare is a cause for some concern. The
company may have difficulty meeting its short-term debt obligations if it does not improve its
liquidity position. However, the current ratio is still relatively healthy, and the company may be
able to manage its debt obligations without any major problems.

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 ● ACID TEST RATIO = (CURRENT ASSET - INVENTORY) / CURRENT LIABILITY
MEDI LIFESTYLE

2022 2021 2020 2019 2018

CURRENT ASSET 1,390,954 2,727,639 2,572,664 5,543,710 224,28,374

INVENTORY 36,588 46,787 27,187 970,671 1,529,374

CURRENT LIABILITY 8,372,213 8,800,615 11,080,255 19,390,156 34,319,340

ACID TEST RATIO 0.16 times 0.30 times 0.23 times 0.24 times 0.61 times

KPJ HEALTHCARE

2022 2021 2020 2019 2018

CURRENT ASSET 1,313,942 968,575 1,070,265 1,179,499 1,142,446

INVENTORY 65,872 53,753 52,052 53,609 50,170

CURRENT LIABILITY 1,660,321 1,580,146 1,231,978 1,197,933 887,385

ACID TEST RATIO 0.75 times 0.58 times 0.83 times 0.94 times 1.23 times

Analysis:
Medilifestyle:
The acid-test ratio for Medi Lifestyle Healthcare has been decreasing over the past 5
years. In 2022, the acid-test ratio was 0.16 times, which means that the company had 16 cents
in current assets minus inventory for every dollar in current liabilities. This is a very low acid-test
ratio, and it indicates that Medi Lifestyle Healthcare may have difficulty meeting its short-term
debt obligations.
In 2018, the acid-test ratio was 0.61 times, which is a much healthier level. This means
that Medi Lifestyle Healthcare had 61 cents in current assets minus inventory for every dollar in
current liabilities. However, the acid-test ratio has been decreasing since then, which is a cause
for concern.
There are a few possible reasons why Medi Lifestyle Healthcare's acid-test ratio has
been decreasing. One possibility is that the company has been investing in inventory. This

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would increase the company's inventory and reduce its current assets minus inventory, which
would lower the acid-test ratio.
Another possibility is that the company has been experiencing financial difficulties. If the
company is not generating enough cash flow to cover its short-term debt obligations, it may
have to sell some of its inventory to raise cash. This would also lower the acid-test ratio.
The decreasing acid-test ratio of Medi Lifestyle Healthcare is a cause for concern. The
company may have difficulty meeting its short-term debt obligations if it does not improve its
liquidity position.

KPJ Healthcare:
The acid-test ratio for KPJ Healthcare has been decreasing over the past 5 years. In
2022, the acid-test ratio was 0.75 times, which means that the company had 75 cents in current
assets minus inventory for every dollar in current liabilities. This is a relatively healthy level, but
it is lower than the acid-test ratio of 1.23 times in 2018.
There are a few possible reasons why KPJ Healthcare's acid-test ratio has been
decreasing. One possibility is that the company has been investing in inventory. This would
increase the company's inventory and reduce its current assets minus inventory, which would
lower the acid-test ratio.
Another possibility is that the company has been experiencing financial difficulties. If the
company is not generating enough cash flow to cover its short-term debt obligations, it may
have to sell some of its inventory to raise cash. This would also lower the acid-test ratio.
The decreasing acid-test ratio of KPJ Healthcare is a cause for some concern. The
company may have difficulty meeting its short-term debt obligations if it does not improve its
liquidity position.

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 2.3 Activity Ratios

Activity ratios are used to figure out how well a company takes care of its assets. In this report,
inventory turnover and debt turnover are used to look at how well a business is doing. Inventory
turnover is found by dividing the cost of goods sold by the average number of items in stock
over a certain time frame. This ratio shows how many times a company's product is sold and
replaced over a certain time period. A higher inventory turnover ratio means that a company is
selling its stock faster, which is usually a good thing. You can figure out a company's receivable
turnover by dividing its net credit sales by its average accounts receivable for a certain time
period. This number shows how quickly a business gets paid by its customers. If a company has
a bigger receivable turnover ratio, it means that it is getting paid faster, which is usually a good
sign.

● INVENTORY TURNOVER = COST OF GOODS SOLD / INVENTORY

MEDI LIFESTYLE

2022 2021 2020 2019 2018

COST OF GOOD -2,308,053 -905,861 -537,396 -5,304,638 -1,301,738

SOLDS

INVENTORY 36,588 46,787 27,187 970,671 1,529,374

INVENTORY -63.08 times -19.36 times -19.77 times -5.46 times -0.85 times
TURNOVER

KPJ HEALTHCARE
2022 2021 2020 2019 2018

COST OF GOOD -1,751,150 -1,663,940 -1,494,888 -1,627,665 -2,329,282

SOLDS

INVENTORY 65,872 53,753 52,052 53,609 50,170

INVENTORY -26.58 times -30.96 times -28.72 times -30.36 times -46.43 times
TURNOVER

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Analysis:
Medilifestyle:
Based on the available data, it appears that Medi Lifestyle witnessed a substantial rise in
their cost of goods sold between the years 2018 and 2019. Nevertheless, a decline was
observed in the year 2020, subsequently succeeded by a resurgence in both 2021 and 2022.
The presence of negative values indicates that the company incurred costs in excess of its
generated revenues in the process of manufacturing goods.
The inventory levels exhibited fluctuations throughout the years. The year 2019
witnessed a decline in inventory levels, which was subsequently followed by a substantial
decrease in the year 2020. Nevertheless, there was a marginal upward trend observed in the
year 2021, followed by a subsequent decline in the subsequent year, 2022.
The inventory turnover metric serves as an indicator of the speed at which a company is
able to sell its inventory. In this particular instance, the presence of negative values indicates
that the inventory turnover of the company is negative. This occurrence may be attributed to
either an anomaly or an error during the process of data entry.
Based on the information provided, it can be inferred that Medi Lifestyle encountered
difficulties pertaining to their cost of goods sold and inventory management. Nevertheless, in the
absence of further context or supplementary financial information, it proves challenging to offer
a thorough evaluation of the company's fiscal performance.

KPJ Healthcare:
The inventory turnover for KPJ Healthcare has been decreasing over the past 5 years. In
2022, the inventory turnover was -26.58 times, which means that it took the company 26.58
years to sell its inventory. This is a very low inventory turnover, and it indicates that the company
may have too much inventory on hand.
There are a few possible reasons why KPJ Healthcare's inventory turnover has been
decreasing. One possibility is that the company has been increasing its inventory levels. This
could be due to a number of factors, such as increased demand, changes in the company's
inventory management practices, or problems with the supply chain.
Another possibility is that the company's sales have been decreasing. If the company is
not selling as many goods, it will have more inventory on hand.
The decreasing inventory turnover of KPJ Healthcare is a cause for some concern. The
company may be holding too much inventory, which could lead to increased costs and
decreased profits. The company should investigate the reasons for the decreasing inventory
turnover and take steps to improve it.

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 ● RECEIVABLES TURNOVER = SALES / ACCOUNT RECEIVABLES
MEDI LIFESTYLE

2022 2021 2020 2019 2018

SALES 2,400,959 1,397,4 622,695 9,767,584 2,961,463

43

ACCOUNT 623,711 0 27,187 994,837 14,157,067

RECEIVABLES

RECEIVABLES 3.85 times 0.00 22.90 times 9.82 times 0.21 times
TURNOVER

KPJ HEALTHCARE

2022 2021 2020 2019 2018

SALES 2,920,658 2,589,851 2,397,443 2,737,919 3,365,608

ACCOUNT 645,705 481,393 457,400 549,602 515,743

RECEIVABLES

RECEIVABLES 4.52 times 5.38 times 5.24 times 4.98 times 6.53 times
TURNOVER

Analysis:
Medilifestyle:
The receivables turnover for Medi Lifestyle Healthcare has been decreasing over the
past 5 years. In 2022, the receivables turnover was 3.85 times, which means that it took the
company 3.85 years to collect its receivables. This is a very low receivables turnover, and it
indicates that the company may have a problem collecting its receivables.
There are a few possible reasons why Medi Lifestyle Healthcare's receivables turnover
has been decreasing. One possibility is that the company is selling to customers who are not
creditworthy. This means that the company is more likely to have to write off some of its
receivables as bad debts.
Another possibility is that the company's credit terms are too lenient. This means that the
company is giving customers too much time to pay their bills.
The decreasing receivables turnover of Medi Lifestyle Healthcare is a cause for some
concern. The company may have a problem collecting its receivables, which could lead to

17
increased bad debts and decreased cash flow. The company should investigate the reasons for
the decreasing receivables turnover and take steps to improve it.

KPJ Healthcare:
The receivables turnover for KPJ Healthcare has been increasing over the past 5 years.
In 2022, the receivables turnover was 4.52 times, which means that it took the company 4.52
years to collect its receivables. This is a relatively good receivables turnover, and it indicates
that the company is collecting its receivables fairly quickly.
There are a few possible reasons why KPJ Healthcare's receivables turnover has been
increasing. One possibility is that the company is selling to customers who are more
creditworthy. This means that the company is less likely to have to write off some of its
receivables as bad debts.
Another possibility is that the company's credit terms have become more stringent. This
means that the company is giving customers less time to pay their bills.
The increasing receivables turnover of KPJ Healthcare is a positive sign. The company
is collecting its receivables more quickly, which could lead to increased cash flow and
decreased bad debts. The company should continue to monitor its receivables turnover and
take steps to improve it if it starts to decrease.

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 2.4 Profitability Ratios

Profitability ratios are utilised to evaluate a company's ability to generate profits relative to its
assets, sales, and other variables. Profit margin and return on assets were used to determine
the profitability of the company. A company's net profit margin is determined by dividing its net
income by its total revenue for a given period. This ratio indicates how much profit a business
generates per dollar of revenue. A company with a higher net profit margin is more effective at
generating profits from sales. On the other hand, return on assets (ROA) is calculated by
dividing a company's net income for a specified period by its total assets. This ratio evaluates a
company's profitability relative to its asset utilisation. A greater ROA indicates that a company
generates greater profits per dollar of assets.

● Net Profit Margin = (Net Income / Sales) x 100

MEDILIFESTYLE LIMITED

2022 2021 2020 2019 2018

Net Income -4,302,794 -13,661,359 -4,376,804 -3672511 -8805852

Sales 2,400,959 1,397,443 622,695 27852 2961463

(percentage) 100 100 100 100 100

Net Profit Margin -17.92% -97.76% -702.88% -131.85% -29.73%

KPJ HEALTHCARE

2022 2021 2020 2019 2018

Net Income 184,890 77,503 205,775 232,723 222,782

Sales 2,920,658 2,589,851 2,397,443 2,737,919 3,365,608

(percentage) 100 100 100 100 100

Net Profit Margin 6.33% 2.99% 8.58% 8.50% 6.62%

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Analysis:

Based on the provided net profit margin figures, we can analyze and compare the
financial performance of Medilifestyle Limited and KPJ Healthcare over the years:

Medilifestyle Limited:
1. In 2022, Medilifestyle Limited had a net profit margin of -17.92%. This indicates that the
company experienced a loss, with expenses exceeding its revenue.
2. In 2021, the net profit margin was -97.76%. This implies a significant decline in profitability
compared to the previous year, reflecting a substantial loss.
3. In 2020, the net profit margin was -702.88%. This indicates a significant decline in profitability,
with a substantial loss.
4. In 2019, the net profit margin was -131.85%, implying a loss that exceeded the company's
revenue.
5. In 2018, the net profit margin was -29.73%. Although negative, the loss was relatively smaller
compared to other years.

Overall, Medilifestyle Limited has been facing severe profitability challenges, with
negative net profit margins in all the years mentioned. The company's losses have been
substantial, indicating financial difficulties and potential operational inefficiencies.

KPJ Healthcare:
1. In 2022, KPJ Healthcare achieved a net profit margin of 6.33%. This signifies a positive
profitability, with the company earning a profit.
2. In 2021, the net profit margin was 2.99%, indicating a slight increase in profitability compared
to the previous year.
3. In 2020, the net profit margin was 8.58%. This suggests a relatively higher profitability level,
with the company earning a profit.
4. In 2019, the net profit margin was 8.50%, which indicates a stable profitability level similar to
the previous year.
5. In 2018, the net profit margin was 6.62%, showing consistent profitability over the years.

In comparison to Medilifestyle Limited, KPJ Healthcare has demonstrated consistent

positive net profit margins, indicating profitability in each of the years mentioned. The company's
profitability has been relatively stable, with slight fluctuations but no major losses.

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 Based on these figures, it is evident that KPJ Healthcare has a stronger financial
performance and stability compared to Medilifestyle Limited. However, it's important to note that
financial analysis should consider other factors such as revenue, operating expenses, debt
levels, and market conditions to gain a comprehensive understanding of a company's financial
health.

● Return on Asset = (Net Income / Total Asset) x 100

MEDILIFESTYLE LIMITED

2022 2021 2020 2019 2018

Net Income -4,302,794 -13,661,359 -4,376,804 -3672511 -8805852

Total Assets 2,176,137 4,030,283 20,944,064 30330861 24225072

(percentage) 100 100 100 100 100

Return on Asset -197.73% -338.97% -20.90% -12.11% -36.35%

KPJ HEALTHCARE

2022 2021 2020 2019 2018

Net Income -184,890 77,503 205,775 232,723 222,782

Total Assets 6,187,641+ 6,187,641+ 6,141,431+ 5,985,847+ 4,792,869+

6,994,0662 6,141,4312 5,985,8472 4,792,869 4,233,908

(percentage) 100 100 100 100 100

Return on Asset 2.80% 1.26% 3.39% 2.15% 2.46%

Analysis:

Based on the provided return on asset (ROA) figures, we can analyze and compare the
financial performance of Medilifestyle Limited and KPJ Healthcare over the years:

Medilifestyle Limited:
1. In 2022, Medilifestyle Limited had a ROA of -197.73%. This indicates a substantial negative
return on the company's assets, suggesting significant financial difficulties and potential
inefficiencies in asset utilization.

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2. In 2021, the ROA was -338.97%, representing a further decline in asset performance
compared to the previous year.
3. In 2020, the ROA was -20.90%. Although negative, the magnitude of the return improved
compared to the subsequent years.
4. In 2019, the ROA was -12.11%, which shows a negative return on the company's assets but
with a smaller magnitude of loss compared to other years.
5. In 2018, the ROA was -36.35%, indicating a negative return on assets but with a relatively
smaller loss.

Overall, Medilifestyle Limited has experienced consistently negative returns on its assets
over the years, reflecting poor asset utilization and potential financial challenges.

KPJ Healthcare:
1. In 2022, KPJ Healthcare achieved a ROA of 2.80%, signifying a positive return on the
company's assets, albeit at a relatively low level.
2. In 2021, the ROA was 1.26%, indicating a slight decline in asset performance compared to
the previous year.
3. In 2020, the ROA was 3.39%, reflecting a relatively higher return on the company's assets.
4. In 2019, the ROA was 2.15%, which shows a consistent but moderate return on assets.
5. In 2018, the ROA was 2.46%, indicating a stable asset performance similar to the previous
year.

In comparison to Medilifestyle Limited, KPJ Healthcare has demonstrated positive

returns on its assets in all the years mentioned. However, the returns have generally been
relatively low, suggesting potential room for improvement in asset utilization and efficiency.

Based on these figures, it can be concluded that KPJ Healthcare has exhibited better
asset performance and profitability compared to Medilifestyle Limited. However, as with any
financial analysis, it is essential to consider other factors and conduct a comprehensive
assessment of the companies' financial health, including revenue, expenses, debt levels, and
market conditions.

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 2.5 Leverage Ratios

Leverage ratios are used to assess the proportion of a company's debt to its equity and other
factors. I utilised the debt-to-equity ratio and the debt ratio as leverage ratios. A company's
debt-to-equity ratio is determined by dividing its total debt by its total equity. This ratio gauges
the proportion of a company's debt to its equity. A greater debt-to-equity ratio indicates that a
business has more debt than equity, which can increase its financial risk. The debt ratio is
calculated by dividing the total debt by the total assets of a company. This ratio assesses the
proportion of an organization's assets that are financed by debt. A higher debt ratio indicates
that a company has more debt relative to its assets, which can increase its financial risk.

● Debt Ratio = Total Liability / Total Assets

MEDILIFESTYLE LIMITED

2022 2021 2020 2019 2018

Total Liability 10,887,528 9,959,730 13,336,484 26912099 34,409,303

Total Asset 2,176,137 4,030,283 20,944,064 30330861 24225072

Debt Ratio 5.00 2.47 0.64 0.89 1.42

KPJ HEALTHCARE

2022 2021 2020 2019 2018

Total Liability 4,639,848 3,937,133 3,939,219 3,936,583 2,656,166

Total Asset 6,994,066 6,187,641 6,141,431 5,985,847 4,792,869

Debt Ratio 0.6634 0.6363 0.6414 0.6576 0.5541

Analysis:

Based on the provided debt ratio figures, we can analyze and compare the debt levels of
Medilifestyle Limited and KPJ Healthcare over the years:

Medilifestyle Limited:
1. In 2022, the debt ratio was 5.00, indicating that the company's total debt was five times higher
than its total assets. This suggests a high level of leverage and potential financial risk.

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2. In 2021, the debt ratio was 2.47, showing a lower debt level compared to the previous year
but still relatively high.
3. In 2020, the debt ratio was 0.64, suggesting a substantial reduction in debt compared to the
previous year. However, the ratio is still relatively high, indicating a significant portion of assets
being financed by debt.
4. In 2019, the debt ratio was 0.89, signifying an increase in debt levels compared to the
previous year. The company's assets were financed to a large extent by debt.
5. In 2018, the debt ratio was 1.42, indicating a higher debt level compared to the previous year.
The company had a relatively higher proportion of debt compared to its assets.

KPJ Healthcare:
1. In 2022, the debt ratio was 0.6634, suggesting that the company's total debt accounted for
approximately 66.34% of its total assets. This indicates a moderate level of leverage.
2. In 2021, the debt ratio was 0.6363, showing a slight decrease in debt level compared to the
previous year.
3. In 2020, the debt ratio was 0.6414, indicating a relatively stable debt level compared to the
previous year.
4. In 2019, the debt ratio was 0.6576, signifying a consistent debt level similar to the previous
year.
5. In 2018, the debt ratio was 0.5541, suggesting a relatively lower debt level compared to the
previous year.

Comparing the debt ratios of Medilifestyle Limited and KPJ Healthcare, it is evident that
KPJ Healthcare has maintained a relatively lower debt level in each of the years mentioned.
This suggests a more conservative approach to debt financing and potentially lower financial
risk.

On the other hand, Medilifestyle Limited has exhibited significantly higher debt ratios,
indicating a higher level of leverage and potential financial vulnerability. However, it's important
to note that the interpretation of debt ratios should consider industry norms, company-specific
factors, and the overall financial health of the organizations.

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 ● Debt to Equity Ratio = Long Term Debt / Total Equity

MEDILIFESTYLE LIMITED

2022 2021 2020 2019 2018

Long Term Debt 293,314 1,358,258 5,351,578 7521943 89963

Total Equity -8,711,391 -5,929,447 7,607,580 3418762 -10184231

Debt to Equity Ratio -0.03 -0.23 0.70 2.20 -0.01

KPJ HEALTHCARE

2022 2021 2020 2019 2018

Long Term Debt 4,639,848 3,937,133 3,939,219 3,936,583 2,656,166

Total Equity 2,354,218 2,250,508 2,202,212 2,049,264 2,136,703

Debt to Equity Ratio 1.971 1.749 1.789 1.921 1.243

Analysis:

Based on the provided debt to equity ratio figures, we can analyze and compare the debt levels
relative to equity of MedilifestyleHealthcare and KPJ Healthcare over the years:

Medilifestyle Healthcare:
1. In 2022, the debt to equity ratio was -0.03. A negative debt to equity ratio suggests that the
company has negative equity or a deficit in shareholder's equity.
2. In 2021, the debt to equity ratio was -0.23, indicating a further negative equity situation.
3. In 2020, the debt to equity ratio was 0.70, which indicates that the company had more debt
than equity. This suggests a relatively higher level of debt compared to the shareholders' equity.
4. In 2019, the debt to equity ratio was 2.20, implying a significant increase in debt compared to
equity. The company's debt level was more than double its equity.
5. In 2018, the debt to equity ratio was -0.01, suggesting a negligible or minimal level of debt
relative to equity.

KPJ Healthcare:
1. In 2022, the debt to equity ratio was 1.971, indicating that the company's debt was
approximately twice the equity. This suggests a relatively higher proportion of debt compared to
equity.

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2. In 2021, the debt to equity ratio was 1.749, showing a similar level of debt relative to equity
compared to the previous year.
3. In 2020, the debt to equity ratio was 1.789, implying a relatively stable debt to equity
proportion compared to the previous year.
4. In 2019, the debt to equity ratio was 1.921, indicating a slight increase in debt compared to
equity.
5. In 2018, the debt to equity ratio was 1.243, suggesting a relatively lower debt to equity
proportion compared to the subsequent years.

Comparing the debt to equity ratios of Medilifestyle Healthcare and KPJ Healthcare, it is
evident that Medilifestyle Healthcare has exhibited more volatile and unfavorable debt to equity
ratios, including negative ratios and higher debt levels compared to equity. This indicates
potential financial instability and a higher reliance on debt financing.

In contrast, KPJ Healthcare has generally maintained a higher proportion of debt

compared to equity, indicating a moderate level of leverage. However, the ratios are relatively
more stable and within a reasonable range. It's important to note that the interpretation of debt
to equity ratios should consider industry norms, company-specific factors, and the overall
financial health of the organizations.

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3.1 COMPARATIVE ANALYSIS

3.2 YEAR-TO-YEAR CHANGE OF BALANCE SHEET

● KPJ Healthcare Bhd

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 ● Medi Lifestyle Limited

Comment / Analysis: Based on the information above, it illustrates the year to year
change analysis of two companies which are KPJ Healthcare and Medi Lifestyle Limited
using balance sheets. As we can see here, KPJ Healthcare experienced uneven
movement for the 5 years compared to Medi Lifestyle Limited where this company has
experienced a negative movement over this period. According to the table of balance
sheet in KPJ Healthcare, it has shown a positive movement in 2018 to 2019 where the
company was able to increase the percentage of total assets from 13% to 25%.
However, the company was facing decline from 2019 to 2021 where the company was
experiencing the reduction from 25% in 2019 to 1% in 2021. Whereas, in 2022, it shows
an increasing movement where the company managed to get 13% which is higher than
the previous year (2021) . This situation has given a good sign for the company's
performance as it leads to high profitability of the company. In contrast to Medi Lifestyle
Limited, the company had a negative amount in 5 years. For example, this company is

28
facing a massive decreasing amount of total assets which is -81% in 2021 compared to
other years. However, this company is able to gain -46% in 2022 which indicated that
this company was having a financial problem and may impact their ability to make profit.

Besides, the deposits, bank and cash balance of KPJ Healthcare company has
experienced a decreasing amount where the company only managed to get 47% in 2022
in contrast to Medi Lifestyle Limited which this company is able to make -58% in 2022.
For the KPJ Healthcare company, it shows that the company is able to maintain the
financial and could fund the future investment compared to Medi Lifestyle Limited which
shows the financial distress of the company. This situation may lead to bankruptcy or
other financial restructuring.

On other hand, the current liabilities of the trade and other payable in KPJ Healthcare
shows an increase from 2% in 2021 to 16% in 2022. Whereas, Medi Lifestyle Limited
has facing an increase from -14% in 2021 to 49% in 2022 in terms of its other payable.
As a result, it shows that both companies are relying on the credit purchase of goods
which could be a sign for the financial difficulty. However, overall the total liabilities of
both companies shows an increase in the current year.

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 3.3 YEAR-TO-YEAR CHANGE OF INCOME STATEMENT

● KPJ Healthcare Bhd

● Medi Lifestyle Limited

Comment / Analysis: The table above shows the year-to-year change for the income
statement for KPJ Healthcare and Medi Lifestyle Limited for 5 years. As we can see
here, the revenue for KPJ Healthcare has increased from 8% in 2021 to 13% in 2022
contrast with Medi Lifestyle where it has gained 72% in 2022. This situation indicates
that both companies are in a good position as they generate more income from their
operations. However, the revenue of Medi Lifestyle Limited has aggressively declined to
RM 27,852 in 2029 compared to other years. Besides, the gross profit for KPJ
Healthcare shows the decline movement from 2018 to 2020 where this company was
experiencing a negative amount of gross profit which is -6% in 2018, -9% in 2019 to
-19% in 2020. However, this company was able to get back on track where it managed
to gain 26% of gross profit in 2022. Counter to Medi Lifestyle, it shows that the gross
profit is -81% in 2022. This situation can be a sign of financial trouble as the company is
not generating enough revenue to cover its direct costs of producing goods and

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services. Furthermore, the profit before tax for KPJ Healthcare shows a positive change
which has been increased from -45% in 2020 to 117% in 2022. However, the Medi
Lifestyle Limited shows a decrease from 19% in 2020 to -68% in 2022. This situation
shows that the company might have faced losses over the years. Overall, the net profit
for KPJ Healthcare shows that this company is in a good financial position as it
managed to get 178% in 2022. In contrast to Medi Lifestyle Limited, where this company
is in a financial distress as they generate -69% which indicates losses for this company.

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4.1 COMMON SIZE ANALYSIS

4.2 COMMON SIZE ANALYSIS OF BALANCE SHEET

● KPJ Healthcare Bhd

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● Medi Lifestyle

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Comment / Analysis: The common size analysis of KPJ Healthcare and Medi Lifestyle
Limited's balance sheets over five years, from 2018 to 2022, is displayed using the data
given above. Here, we can observe that both KPJ Healthcare and Medi Lifestyle had
inconsistent movement during a five-year period. According to the balance sheet table
for KPJ Healthcare, there has been an unequal growth in non-current assets from 2018
to 2022. Non-current assets for the corporation grew from 2018 to 2020 by 72.48% to
80.57%, declined somewhat in 2021 by 80.3%, and then climbed by roughly 78.96% in
2022. Despite a rise of 7.42% from 2018 to 2020, the Medi Lifestyle's non-current assets
unexpectedly fell by 32.32% and 36.08%, respectively, in 2021 and 2022. Property,
plant, and equipment (PPE) for KPJ Healthcare will decrease from 2018 to 2022 by
50.71% to 39.47%, while Medi Lifestyle will expand from 2018 to 2020 by 6.56% to
22.99%, fall in 2021 by 3.89%, and then recover with a growth of 11.03% in 2022.

KPJ Healthcare's trade receivables declined from 2018 to 2021 by 10.76% to 7.78% and
then grew by 9.23% in 2022, while Medi Lifestyle's trade receivables also decreased
from 2018 to 2021 by 58.44% to 12.26% and then increased by 28.66% in 2022. Here,
we can see that in terms of trade receivables, Medi Lifestyle performs better than KPJ
Healthcare. KPJ has a better asset cycle for the firm than Medi Lifestyle.

Furthermore, KPJ Healthcare's trade payables only rise by 10.79% and 12.87%,
respectively, in 2018 and 2019, then decline until 2021 before rising again in 2022 by
10.3%. It demonstrates that Medi Lifestyle Limited company has superior trade payables
than KPJ Healthcare since it declined negatively from 2018 to 2022 by 55.52% to 0.49%.
Thus, the lease liabilities for the two companies are not equal, but for KPJ Healthcare
and Medi Lifestyle, respectively, they will decline by 14.98% and 13.48% in 2022. Only
1.5%, or a very little difference, differentiates the two.

Finally, from 2018 to 2022, KPJ Healthcare's total equity declined by 44.58% to 33.66%,
whereas Medi Lifestyle's equity decreased adversely by a negative 400.31% in 2022. It
demonstrates that Medi Lifestyle struggles to raise the company's equity since it is
insufficient for the needs of the company. It's because a company that has negative
shareholders' equity may be in financial trouble or may have used all of its retained
earnings and any proceeds from stock issuance to reinvest in the business by buying
expensive property, plant, and equipment (PPE).

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 4.3 COMMON SIZE ANALYSIS OF INCOME STATEMENT

● KPJ Healthcare Bhd

● Medi Lifestyle

35
Comment / Analysis: The income statement for KPJ Healthcare and Medi Lifestyle
Limited for the five years from 2018 to 2022 is shown in the table above along with a
common size analysis. As we can see in table KPJ Healthcare, the revenue for KPJ
Healthcare has decreased from 2018 to 2022 by RM 3,308,117 to RM 2,920,658 while
the revenue for Medi Lifestyle has fluctuated negatively during the year and favourable
at the end of the year. which reduce from RM 2,961,463 to RM 622,695 from 2018 to
2020 then increase from RM 1,397,443 to RM 2,400,959 from 2021 to 2022.

Additionally, the gross profit increased from 2018 to 2019 by 30.80% to 40.55%, declined
from 2021 to 2023 by 35.75%, and increased again in 2023 by 40.04%. The Medi
Lifestyle, however, had a negative decline from 2018 to 2020 of 56.04% to 13.70%, an
improvement in 2021 of 35.18%, and a decline by 3.87% in 2022. It demonstrates that
KPJ Healthcare outperforms Medi Lifestyle in terms of business performance.

Last but not least, KPJ Healthcare's profit before tax increased from 2018 to 2019 by
8.06% to 10.06%, decreased from 2021 to 2022 by 4.68%, and then increased again in
2022 by 9.02%. But unlike Medi Lifestyle, the business runs a loss before taxes. Even
though Medi Lifestyle has a loss before income taxes, the firm will continue to grow from
2018 through 2022.

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5.0 IMPROVEMENT AND RECOMMENDATION

KPJ HEALTHCARE BHD

Based on the financial ratio analysis, it appears that KPJ Healthcare company is facing a
liquidity challenge. To address this issue, KPJ Healthcare Bhd has several potential courses of
action. One option is to enhance cash inflows by borrowing money, selling assets, or boosting
sales. Another possibility is to reduce cash outflows by cutting expenses, postponing payments
to suppliers, or negotiating better payment terms with creditors. KPJ Healthcare Bhd can also
enhance its liquidity ratios by implementing more effective management of working capital, such
as reducing inventory levels or improving the collection of account receivables. Additionally, the
company could consider debt restructuring or seeking additional equity financing to improve its
financial position.

Furthermore, the leverage ratio of the company indicates a negative trend, and KPJ
Healthcare Bhd can adopt various strategies to address this issue. Firstly, the company can
make a down payment loan or issue equity to retire debt and reduce the overall debt level. KPJ
Healthcare Bhd can also improve its profitability by increasing sales or reducing expenses,
thereby boosting its earnings before interest and taxes (EBIT) and decreasing the debt-to-EBIT
ratio. Moreover, they can enhance their leverage ratios by generating higher earnings through
investments in new products or markets, or by enhancing operational efficiency. Finally, the
company may consider debt restructuring or seeking additional equity financing to improve its
financial position.

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MEDI LIFESTYLE LIMITED

Due to Medi Lifestyle's high liquidity ratio, it is clear that it can meet its short-term debt
obligations. As a way to further enhance liquidity ratios, you suggest paying off creditors and
changing debt with short-term maturities into debt with longer-term maturities. The quick and
current ratios would rise as a result of this strategy, increasing the amount of short-term liquidity
that is accessible for other uses.

You recommend lowering overhead costs like rent, marketing, and employee salaries to
improve the liquidity ratio. These are a few illustrations of overhead expenses. If these costs
were reduced, more money would be available for use in other operations, increasing the
overall financial flexibility.

Although the Medi Lifestyle activity ratio is in good shape, you advise developing a more
precise forecasting strategy to anticipate client demand. If supply and demand are balanced, it
is possible to increase stock turnover rates and get rid of surplus inventory.

The leverage ratio is acceptable, however it might be made better by renegotiating the
loan's terms. Refinancing high-interest debts and restructuring low-interest loans can reduce the
debt-to-equity ratio and guarantee that there are enough assets to cover commitments.

According to Medi Lifestyle's profitability ratio, the business lost money in 2020 and 2021
but turned a profit in 2022. You suggest that in order to boost profitability, it is vital to increase
sales, decrease operating costs, increase turnover, raise output, and improve overall
effectiveness. The implementation of these approaches is anticipated to promote the company's
growth into international markets and help it achieve sustained profitability.

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6.0 CONCLUSION

In conclusion, we successfully examined and explained the analysis of the financial

reports of KPJ Healthcare Bhd company and Medi Lifestyle Limited. The financial analysis we
conducted included evaluating financial ratios, performing comparative analysis, and applying
common size analysis for the years 2018, 2019, 2020, 2021, and 2022. By conducting this
thorough financial analysis, we gained valuable insights into the financial well-being,
performance, and potential risks of these companies. This information assists us in making
informed decisions regarding investment opportunities, lending considerations, and business
collaborations. Through financial analysis, we were able to uncover crucial details about the
liquidity, profitability, efficiency, and solvency of these companies, enabling us to evaluate their
ability to fulfill financial obligations and generate value for stakeholders.

Furthermore, financial analysis allows us to identify patterns and trends in a company's

financial performance over time, which aids in making predictions about future growth and
success. As students, performing financial analysis on these companies' financial reports has
equipped us with essential skills and knowledge that will prove valuable in our future careers.
Additionally, this analysis enhanced our understanding of financial comparative analysis,
financial statement analysis, and financial ratios—essential aspects in various business fields.
Lastly, conducting financial analysis has honed our research skills as we collected and analyzed
data from multiple sources to form a comprehensive assessment of the financial health and
performance of these companies.

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REFERENCES

Bloomenthal, A. (2006, May 1). Financial ratio analysis: Definition, types, examples,and
how to use. Investopedia. https://www.investopedia.com/terms/r/ratioanalysis.asp

Investor relations - KPJ Healthcare berhad. (n.d.). Listedcompany.com. Retrieved July

13, 2023, from https://kpj.listedcompany.com/ar.html

No title. (n.d.). Listedcompany.com. Retrieved July 13, 2023, from

https://medilifestyle.listedcompany.com/ar.html

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APPENDICES

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