3.

0 SUMMARY OF ANALYSIS AND RECOMMENDATIONS

3.1 Liquidity Ratios

3.1.1 Current Ratios

Current ration
1.6
1.4
1.2
1
Axis Title

0.8
0.6
0.4
0.2
0
2018 2019 2020 2021 2022

Based on Tenaga Nasional Berhad current ratio on 2018 is higher than other year. This means
that TNB has enough current assets to cover its current liabilities by 1.41 on 2018. On year
2019, current ratio for this company is 1.08 its mean the company has slightly more current
assets than current liabilities. On year 2020 to 2021, this company had a lower ratio and that
means this company had not have enough liquid assets to meet its short-term obligations.
However, on 2022 it increases again.

3.1.2 Quick Ratio

Quick ratio
1.6
1.4
1.2
1
Axis Title

0.8
0.6
0.4
0.2
0
2018 2019 2020 2021 2022
Based on Tenaga Nasional Berhad quick ratio on 2018 is 1.35 and higher than other year. It
means that the company has enough money on hand to pay its obligations. On year 2019
quick ratio is 1.00 and is considered to be neutral. This means that a company has the same
amount of quick assets for every dollar of current liabilities. However, on 2020 and 2021
quick ration decrease so company may have difficulty meeting its short-term obligations if
unexpected expenses or cash flow problems arise. On 2022 quick ration increases again.

3.1.3 Average Collection Period

average collection ratio

180
160
140
120
Axis Title

100
80
60
40
Based on 20 Tenaga
0
Nasional 2018 2019 2020 2021 2022 Berhad
Average Collection Period from year 2018 to 2019 is decrease as much as 15.17 and increase
from 34.11 to 163.79 from 2019 to 2022. On year 2018 number of average collection period
for this family is the lower number. This mean year 2018 is the shorter time to take for a
company to collect credit sales and had a greater liquidity. Meanwhile, for year 2022 had
highest number of average collection period the company is having difficulty collecting
payments from its customers, which can lead to cash flow problems.

3.1.4 Accounts Receivable Turnover

accounts receivable turnover

12

10

8
Axis Title

0
2018 2019 2020 2021 2022
Based on Tenaga Nasional Berhad accounts receivable turnover, the graph shows that the on
year 2018 is 7.41 its mean the company is collecting accounts receivable and it is increasing
cash flow. On year 2019, number of accounts receivable turnover is 10.70 more higher than
other year. This means that this year is the faster the collection of the firm’s credit accounts
and more liquid the firm. Meanwhile, from year 2020 to 2022 decreasing from 6.38 to 2.23.
This mean that year is slow the collection of the firm credit account and less liquidity.

3.1.5 Inventory Turnover

inventory turnover
35

30

25

20
Axis Title

15
Based on nventory
10
turnover on
5
2018 is higher as
many 0
2018 2019 2020 2021 2022
as 29.54
this means the
investment in inventory turnover is lower. However, the graph show that the inventory
turnover is decrease from year 2019 to 2022 as much as 2.27. This is happened because
company’s investment is higher.

3.2 CAPITAL STRUCTURE RATIOS

3.2.1 Debt Ratio

Debt ratio
72.00%
70.00%
68.00%
66.00%
Axis Title

64.00%
62.00%
60.00%
58.00%
56.00%
2018 2019 2020 2021 2022
Based on Tenaga Nasional Berhad debt ratio from year 2018 to 2022 is show increase as
much as 8.81%. That means reliance on non-owner financing or financial leverage is increase
and it indicates that a company is taking on a lot of risk. This could lead to financial problems
in the future, such as difficulty paying off debt, bankruptcy, or even liquidation. On year
2018, debt ratio is lower than other year that mean indicates a smaller reliance on non-owner
financing or financial.

3.2.2 Times Interest Earned

Times Interest Earned

4.5
4
3.5
3
Axis Title

2.5
2
1.5
1
Based 0.5 on Tenaga
0
2018 2019 2020 2021 2022 Nasional
Berhad times interest earned is decrease from year 2018 to 2021 as much as 2.92. On year
2018 times interest earned is 3.87 greater than the other year. That mean the firm’s ability to
pay its interest in a timely manner is greater. However, the graph from year on 2019 to 2021
show that is decrease as much as 1.23. That mean the company is in a vulnerable financial
position. If there is any unexpected decrease in revenue or increase in expenses, the company
may not be able to cover its interest payments and could default on its debt. Also, on year
2022 it increases back as much 3.16.

3.3 ASSETS MANAGEMENT EFFICIENCY RATIOS

3.3.1 Total Assets turnover

Total Assets Turnover

0.35
0.3
0.25
Axis Title

0.2
0.15
0.1
0.05
0
2018 2019 2020 2021 2022
Based on Tenaga Nasional Berhad total assets turnover from year 2018 to 2020 is decrease
from 0.33 to 0.26. This shows that the firm’s efficient use of its investment in total assets is
not efficient. However, on year 2021 it increases a little bit as much 0.26 and decrease back
on year 2022 as much as 0.25. This is because it means that the company is not generating as
much revenue from its assets as it could be.

3.3.2 Fixed Assets Turnovers

Fixed Asset Turnover

0.48
0.46
0.44
Axis Title

0.42
0.4
0.38
0.36
0.34
Based on Tenaga 2018 2019 2020 2021 2022 Nasional
Berhad fixed asset turnover on year 2018 is 0.45. From year 2019 to 2020 show that the
graph is decrease as much as 0.07. This mean that the firm ‘efficient use of its investment in
fixed assets is not effective. However, it increases back from year 2020 to 2022 from 0.39 to
0.44. That mean data on year 2021 and 2022 is not generating as much revenue from its fixed
assets as it could be.

3.4 Analysis of Profitability Ratios

 Profitability Ratios
20 18.5
18 16.11 16.73
16 15.36
13.64
14
12
10
7.64
8 6.3 6.25 6.27 6.67
5.69
6 4.25 4.26 4.06
3.21 3.5 3.77
3.7 3.72
4 2.15
1.83 1.94 1.97
1.84 1.7
2
0
2018 2019 2020 2021 2022

Grass Profit Margin (%) Operating Profit Margin (%)

Net Profit Margin (%) Operating Return on Assets (%)
Return on Equity (%)

Figure 3.4 : Profitability Ratios

According to figure 3.4, the Gross Profit Margin of Tenaga Nasional BHD was
experiencing an increasing trend from 2018 to 2021, then a downward trend from 2021 to
2022. The highest gross profit margin for Tenaga Nasional BHD was on 2021 which is
4.06%. If TNB's revenue increased during this time period, it could contribute to a larger
gross profit margin. Higher revenue means more money to pay the cost of goods sold
(COGS), resulting in a higher gross profit. On 2022, this company having a decreasing again
because of the pricing pressure.

According to figure 3.4, the Operating Profit Margin of Tenaga Nasional BHD was
experiencing an increasing trend trom 2018 to 2020, then a downward trend from 2020 to
2021 and increasing again from 2021 to 2022. The highest operating profit margin for Tenaga
Nasional BHD was on 2022 which is 18.5%. Tenaga Nasional BHD has larger sales or
revenues in 2022 than the previous year, it may result in a better operating profit margin. This
could be due to rising electricity demand, additional customers, or successful pricing
measures.

According to figure 3.4, the Net Profit Margin of Tenaga Nasional BHD was experiencing
increasing trend from 2018 to 2019. Then a downward trend from 2019 to 2022. The lowest
net profit margin for Tenaga Nasional BHD was on 2018 which is 1.83%. Tenaga Nasional
BHD has larger sales or revenues in 2022 than the previous year, it may result in a better
operating profit margin. This could be due to rising electricity demand, additional customers,
or successful pricing measures.

According to figure 3.4, the Operating Return on Assets of Tenaga Nasional BHD was
experiencing a downward trend from 2019 to 2021. Then experience an increasing trend from
2021 to 2022. The highest operating return on assets for Tenaga Nasional BHD on 2022
which is 6.67%. Changes in accounting standards or practises can have an impact on financial
ratios, including ROA. If TNB changes its accounting practises or has to make adjustments
owing to regulatory changes, the stated ROA figure may be affected.

According to figure 3.4, the Return on Equity for Tenaga Nasional BHD was experiencing a
increasing trend from 2018 to 2019 and experienced an decreasing trend from 2019 to 2020.
Continue with increasing from 2020 to 2021 and decreased from 2021 to 2022. The highest
return on equity for Tenaga Nasional BHD was on 2019. A corporation makes larger profits
or raises its net income, its ROE may rise. Revenue growth, cost-cutting measures, enhanced
operational efficiency, or successful company strategies could all contribute to this.

3.5 Analysis of Market Value Ratios

 Price Earnings Ratio
25 22.67
21.16
20
16.7
14.81
15
11.8
10

0
2018 2019 2020 2021 2022

Price Earnings Ratio

Figure 3.5 : Price Earnings Ratio

According to figure 3.5, the Price Earning Ratio for Tenaga Nasional BHD was
experiencing a downward trend from 2018 to 2019. Then experience a decreasing trend from
2019 to 2021 and increase back from 2021 to 2022. The highest price earnings ratio for
Tenaga Nasional BHD was RM22.67 which is on 2018. TNB's profits per share climbed
dramatically throughout that time period, which boosted the P/E ratio. Investors may have
expected stronger earnings in the future and were willing to pay a higher price for the stock.

Market to Book Ration

1.6
1.4 1.32 1.35

1.2 1.1 1.04

1 0.95

0.8
0.6
0.4
0.2
0
2018 2019 2020 2021 2022

Market to Book Ration

Figure 3.6 : Market to Book Ratio

According to figure 3.6, the Market to Book Ratio was experiencing an increasing
trend from 2018 to 2019 and decreasing from 2019 to 2021. It increase again from 2021 to
2022. The highest market to book ratio for Tenaga Nasional BHD is 1.35 times which in on
2019. If investors were confident in the company's future prospects, they might have been
willing to pay a premium for its stock, causing the market value to rise.