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    Gamuda Berhad and IJM Corporation Bhd are two major construction companies in Malaysia that have demonstrated strong financial performance in recent years. Specifically: 1) Both companies achieved their highest current ratios and net working capital in 2015. 2) They also achieved identical gross profit rates of 50% in 2015. 3) Gamuda had higher returns on sales in 2014 at 42% compared to IJM's 18%, but IJM had a higher return on assets that year at 13% versus Gamuda's 10%. 4) While their financial ratios showed similarities in areas like current ratio and gross profits, IJM generally demonstrated stronger cash flows and liquidity whereas Gamuda achieved better profitability through

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    Document 1

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    cassilda
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    Gamuda Berhad and IJM Corporation Bhd are two major construction companies in Malaysia that have demonstrated strong financial performance in recent years. Specifically: 1) Both companies achieved their highest current ratios and net working capital in 2015. 2) They also achieved identical gross profit rates of 50% in 2015. 3) Gamuda had higher returns on sales in 2014 at 42% compared to IJM's 18%, but IJM had a higher return on assets that year at 13% versus Gamuda's 10%. 4) While their financial ratios showed similarities in areas like current ratio and gross profits, IJM generally demonstrated stronger cash flows and liquidity whereas Gamuda achieved better profitability through

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    Gamuda Berhad and IJM Corporation Bhd are two major construction companies in Malaysia that have demonstrated strong financial performance in recent years. Specifically: 1) Both companies achieved their highest current ratios and net working capital in 2015. 2) They also achieved identical gross profit rates of 50% in 2015. 3) Gamuda had higher returns on sales in 2014 at 42% compared to IJM's 18%, but IJM had a higher return on assets that year at 13% versus Gamuda's 10%. 4) While their financial ratios showed similarities in areas like current ratio and gross profits, IJM generally demonstrated stronger cash flows and liquidity whereas Gamuda achieved better profitability through

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    23 views4 pages

    Document 1

    Uploaded by

    cassilda
    Gamuda Berhad and IJM Corporation Bhd are two major construction companies in Malaysia that have demonstrated strong financial performance in recent years. Specifically: 1) Both companies achieved their highest current ratios and net working capital in 2015. 2) They also achieved identical gross profit rates of 50% in 2015. 3) Gamuda had higher returns on sales in 2014 at 42% compared to IJM's 18%, but IJM had a higher return on assets that year at 13% versus Gamuda's 10%. 4) While their financial ratios showed similarities in areas like current ratio and gross profits, IJM generally demonstrated stronger cash flows and liquidity whereas Gamuda achieved better profitability through

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    of 4

    Focusing on three core businesses in Engineering and Construction, Infrastructure Concessions

    and Property Development, we take pride in having delivered numerous large-scale civil
    infrastructure projects to-date; operate and maintain 230 km of highways that serve more than
    two million road users each day. Through their associate company SPLASH, Gamuda owns one
    of the largest privatized water suppliers in Malaysia, providing essential water resource for 2
    million residents and industries in the Klang Valley and Selangor.

    Vision:

    Aim to lead the region in innovative breakthrough solutions for large scale public infrastructure
    and property development.

    Mission:

    Gamuda Berhad reliably deliver innovative world-class infrastructure and premier lifestyle
    properties for our customers through our core businesses in infrastructure development and
    construction, operation of infrastructure facilities and property development.

    Similarities

    1. Both company has the highest current ratio in year 2015


    2. Both company has highest net working capital in year 2015
    3. Both company has highest gross profit rate in year 2015
    4. Both company has the same gross profit rate in 2015 which is 50%
    5. Both company has highest return on sales in 2014
    6. Both company has highest return on asset in 2014

    Differences

    7. IJM’s current ratio is more than Gamuda’s in year 2015 (optimum year for both
    companies)
    8. Gamuda’s cash ratio is lower than IJM’s during their optimum year.
    9. IJM’s optimum return on sales in 2014 is lower than Gamuda’s.
    10. Gamuda’s optimum operating margin is higher than IJM’s.
    Ratio’s IJM Gamuda
    Current ratio IJM has reached the highest Gamuda has reached the
    current ratio rate in year 2015 highest current ratio rate in
    which is RM2.60 per RM1.00 year 2015 which is RM1.79
    liability. per RM1.00 liability.
    Cash ratio IJM has reached the highest Gamuda has reached the
    cash ratio rate in year 2015 highest cash ratio rate in year
    which is cash and marketable 2013 which is cash and
    securities of RM1.16 per marketable securities of
    RM1.00 liability. RM0.27 per RM1.00 liability.
    Net working capital IJM has reached the highest Gamuda has reached the
    net working capital in year highest net working capital in
    2015 which has excess of year 2015 which has excess
    RM6, 882,828 at the end of of RM831, 088 at the end of
    the financial year. the financial year.
    Gross profit rate IJM has generated the highest Gamuda has generated the
    gross profit rate in the year highest gross profit rate in the
    2015 which is 30% from its year 2015 which is 30% from
    sales its sales.
    Return on sales IJM has derived the most Gamuda has derived the most
    return on sales margin in the return on sales margin in the
    year 2014 which is 18% from year 2014 which is 42% from
    every RM1.00 worth of sales. every RM1.00 worth of sales.
    Return on assets The highest return on asset The highest return on asset
    ratio is seen in year 2014. ratio is seen in year 2014
    (13%) (10%)

    Return on stockholder’s IJM’s highest ROE is 0.13 in Gamuda’s ROE is 0.18. in


    equity year 2014. 2014
    Operating margin IJM's operating income is Gamuda's operating income is
    RM4, 663,406 (Net sales – all RM 3,883,120 (Net sales – all
    operating expenses). operating expenses).
    According to this formula, According to this formula,
    IJM's operating margin 5.46. Gamuda's operating margin
    7.58.

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