BACHELOR OF ACCOUNTING WITH HONOURS

MAY / 2023

BBPW3103

FINANCIAL MANAGEMENT I

MATRICULATION NO : 850830016396001
IDENTITY CARD NO. : 850830016396
TELEPHONE NO. : 018-2373605
E-MAIL : [email protected]
LEARNING CENTRE : TAIPING LEARNING CENTER

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Table of Contents

PART 1................................................................................................................................2
Introduction Of The Selected Companies............................................................................2
TIME dotcom...................................................................................................................2
Media Prima.....................................................................................................................6
Calculation of relevant profitability ratios for the selected companies...............................9
Gross profit margin..........................................................................................................9
Net profit margin...........................................................................................................10
Operating profit margin.................................................................................................10
Return on assets.............................................................................................................10
Return on equity............................................................................................................11
Earnings per share..........................................................................................................11
Profitability Ratio – Time Dotcom................................................................................12
Profitability Ratio – ASTRO MALAYSIA HOLDINGS BERHAD............................13
Analysis of the relevant profitability ratios.......................................................................14
Comparison of the companies’ profitability (TIME dotCom vs Astro Malaysia Holding
Berhad)..............................................................................................................................18
Summary............................................................................................................................22
References..........................................................................................................................24

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PART 1
Introduction Of The Selected Companies

TIME dotcom

A Malaysia-based telecommunications company called Time dotCom ("TIME" or

the "Group" or the "Company") offers domestic and international connectivity, data
center, cloud computing, and managed service solutions to the enterprise, wholesale, and
retail market segments throughout the ASEAN region. Time dotCom is a
telecommunications company with a base in Kuala Lumpur, Malaysia (dotCom, 2023).
TIME was established in 1996. TIME dotCom (Time), a fixed-line telecommunications
operator that has been listed on the Malaysian Stock Exchange since 2001, connects
homes and companies by utilizing the most talented individuals and cutting-edge
technologies.

Based in Kuala Lumpur and Cyberjaya, TIME provides data center solutions and a
comprehensive range of domestic and international connectivity to the wholesale,
enterprise, SME, and consumer markets. The central hub of communications in order to
satisfy the insatiable demand for quick, dependable, and secure bandwidth, TIME is
committed to providing entire fiber network solutions and value-added services. TIME
has an operating presence in Singapore, Thailand, Vietnam, and Cambodia in addition to
Malaysia. These nations also have fiber optic network assets. TIME is able to connect
Europe, Africa, and Asia all the way to the western seaboard of the United States through
its investments in the UNITY, FASTER, Asia Pacific Gateway ("APG"), and Asia-
Africa-Europe-1 ("AAE-1") cable systems. In spite of the fierce competition in the global
bandwidth market, TIME is able to produce higher revenues thanks to its broad reach.

With the purchase of a 60% share in AVM Cloud Sdn Bhd ("AVM Cloud"), a
prominent Malaysian private cloud computing company that is among the top VMware
service providers in Southeast Asia, the Group has also enhanced its cloud business.
Strategic acquisitions, joint ventures, and alliances have been started to increase business
sustainability moving ahead by minimizing dependency on a single market, particularly

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Malaysia. ASEAN continues to be a primary focus of TIME's regional business growth.
The Group currently lists CMC Telecommunications Infrastructure Corporation ("CMC")
in Vietnam and Symphony Communications Public Company Limited ("SYMC") in
Thailand as associates.

Image 1 : Financial review (Annual Report 2021)

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 Image 2 : Financial highlight (Annual Report 2021)

Similar to the previous fiscal year, revenue growth in FY2021 was also made
possible by the data center and data product groups' higher contributions. In FY2021, the
data product category earned RM1,042.9 and the data center product category earned
RM284.5 million, respectively. This represented an improvement of 5% and 78%,
respectively, year over year, when one-time income from non-recurring contracts was
excluded. The addition of AVM Cloud solutions helped the data center product group
increase sales.

Due to the increase in Internet users brought on by the trend toward working and
studying from home, TIME continued to have great revenue growth in the retail customer
category, with a 26% increase. Due to the increasing push toward digitalization, the
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Enterprise client category also showed an increase in revenue growth of 26% year over
year. Revenue decreased by just 1% for the Wholesale customer group. The difficulties
encountered in the wholesale sector in the second half of FY 2020 continued into
FY2021.

Media Prima

Astro Malaysia Holdings Berhad (Astro) is Malaysia's leading content and entertainment
company serving 5.5 million households (or 69% of TV households in Malaysia), 8,900
businesses, 17.7 million weekly FM radio and online listeners, 8.4 million monthly
digital listeners, unique visitors and 3.3 million shoppers across its TV, radio, digital and
retail platforms.

Astro is the largest content creator in Malaysia and the ratings in the market are
dominated by local content. They offer three different video services: Astro Pay-TV,
NJOI, and Sooka, our own millennial OTT that aims to serve Malaysians in various
market segments (Systems, 2021). In 1996, Astro Malaysia Holdings was headquartered
in Bukit Jalil and launched its own satellite subscription service. Meanwhile, the
MEASAT satellite network took off with the launch of MEASAT 1. A new pay TV
service called Astro is launched and starts broadcasting 22 TV channels and 8 music
channels. Launches of additional MEASAT satellites began in 1998, enabling Astro to
begin expanding its services.

The company was granted Multimedia Super Corridor status in 1997. In 2003, it was
acquired by Celestial Pictures. Two years later, Astro acquired an Indian radio station
called Time Highway Radio in Malaysia. The company also launched the first IPTV
subscription service based on content licensed from Goal TV. The company also acquired
Yes Television (Hong Kong) Limited and Goal TV Asia Limited to distribute broadband
and TV content in the region. In 2006, Rohana Rozhan, Chief Financial Officer of
AAAN, was elected CEO of Astro Malaysia. The same year, Astro introduced Astro

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MAX, its first PVR service. 2007 the company launched its first video-on-demand
service, adding Hong Kong TVB dramas to the platform.

On April 28, 2008, Astro cảm xúc and HTV established a joint venture in Vietnam. The
program was also picked up by Vietnam Cable Television and distributed nationwide. On
14 June 2010, AAAN was delisted from the Main Market of Bursa Malaysia following
the successful acquisition by Usaha Tegas Sdn. Bhd. As a result, the business was
renamed to Astro Holdings Sdn Bhd. In 2012, the company was again listed on the
Malaysian stock market.

Financial Highlights (Annual Report 2021)

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 Against the backdrop of COVID-19, structural changes in the media business, and
continuous acts of piracy, FY21 revenue moderated by 11% to RM4.36 billion. Due to
the pandemic's severe effects on several customer segments—including businesses in the
hospitality and food and beverage sectors and residential customers whose livelihoods
were impacted—subscription and other revenue declined by 11% to RM3.47 billion. The
Sports Pack one-time rebate given to customers in the first half to make up for the
COVID-19-related global live sports pause and Astro efforts to move customers from ala-
carte offerings to HD-enabled bundles offering better value were the main causes of the
ARPU decline of 3% to RM96.9.

Due to advertisers being cautious with their expenditure during lockdowns, the
overall advertising business had a 17% decline in FY21. Despite being severely impacted
in the first half of FY21, Group Financial Review. As its iconic programs and live
productions began and advertisers increased spending to reengage viewers, Astro's adex
staged a recovery in the second half. The amount of advertising revenue in FY21 was
RM428 million, a third decrease. Shares for Radex, TV Adex, and Digidex were 76%,
41%, and 3%, respectively.

Their online store Go Shop did well, generating a record RM461 million in revenue
in FY21 and posting its first full-year pre-tax profit of RM17 million. Go Shop
immediately shifted to meet shifting client demand by increasing its product line, and as a
result, saw a 30% increase in its customer base. More than 50% of Go Shop's FY21
revenue came from digital sales, taking advantage of the boom in internet shopping.

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Calculation of relevant profitability ratios for the selected companies.

The profitability ratio gauges how well the business is able to turn investments and
sales into profits. It serves as a gauge of the company's effectiveness and efficiency in
accomplishing its profit goal (Assoc Prof Dr Yusnidah Ibrahim, Faudziah Zainal Abidin,
Norlida Abd Manab, Rusmawati Ismail, & Zaemah Zainuddin, 2021).

(Assoc Prof Dr Yusnidah Ibrahim, Faudziah Zainal Abidin, Norlida Abd Manab,
Rusmawati Ismail, & Zaemah Zainuddin, 2021)

Gross profit margin

The profit per ringgit of sales that can be utilized toamong Southeast Asia's top VMware
service providersofit margin. Higher gross profit margins indicate reduced
implementation costs for sales operations, which is good for the company's financial
standing.

By dividing gross profit by sales, one can determine gross profit margin. After the
business has covered all of the costs of the goods, it displays the balance % for each
ringgit of sales.

The calculation of the gross profit margin is shown below:

Gross profit Gross Profit

= x 100
margin Sales

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Net profit margin

The company's capacity to make a profit from each ringgit of sales after subtracting all
costs, such as cost of goods sold, sales expenses, general and administrative expenses,
depreciation charges, interest expenses, and tax, is measured by its net profit margin. The
company's standing is improved by a bigger net profit margin since it indicates effective
purchasing management at low costs.

By dividing the profit after tax by sales, one can determine the net profit margin.
Therefore, the following formula is used to determine net profit margin:

Profit after tax

Net profit margin = x 100
Sales

Operating profit margin

The operating profit margin evaluates how well operations manage to cut expenses and
boost returns before interest and tax. A higher operating profit margin is preferable
because it shows that the business can run effectively. Following is the formula for
calculating operational profit margin:

Operating profit
Operating profit margin = x 100
Sales

Return on assets

The efficiency with which a business uses its assets to produce profit is measured by its
return on assets or return on investment. The status of the company is improved by a
larger ratio since it shows how effectively management uses its resources to produce
profits.

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The formula for calculating return on assets is as follows:

Profit after tax

Return on Assets = x 100
Total assets

Return on equity

Return on equity is a metric that identifies how effectively a business produces profits for
its common owners. The better the ratio, the more profit the company may produce for its
owners.

The formula for return on equity is as follows:

Profit after tax

Return on equity = x 100
Shareholders’ equity

Earnings per share

The net profit that is produced from each common share is calculated using earnings per
share. The management and investors frequently prioritize this information because they
view it as a crucial sign of the business's performance. As a result, the standing of the
shareholders improves as this ratio's value increases.

By dividing the total number of issued common shares by the net profit, one can calculate
earnings per share. The following chart illustrates how earnings per share are calculated:

Profit available to ordinary

shareholders
Earnings Per Share =
Number of ordinary shares
issued

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Profitability Ratio – Time Dotcom

Year 2019 Year 2020 Year 2021

Ratio Formula
(RM) (RM) (RM)

Gross profit margin 652,233,000 x 100% 732,555,000 x 100% 847,936,000 x 100%

1,113,873,000 1,223,169,000 1,396,362,000
Gross profit x 100%
Sales =58.56% =59.89% =60.72%

Net profit margin 314,036,000 x 100% 326,904,000 x 100% 396,778,000 x 100%

1,113,873,000 1,223,169,000 1,396,362,000
Profit after tax x 100%
Sales =28.19% =26.73% =28.42%

Operating profit 328,128,000 x 100% 423,098,000 x 100% 532,724,000 x 100%

margin 1,113,873,000 1,223,169,000 1,396,362,000

Operating profit x 100% =29.46% =34.59% =38.15%

Sales

Return on assets 314,036,000 x 100% 326,904,000 x 100% 396,778,000 x 100%

3,520,734,000 3,900,583,000 4,121,339,000
Profit after tax x 100%
Total assets =8.92% =8.38% =9.63%

Return on equity 314,036,000 x 100% 326,904,000 x 100% 396,778,000 x 100%

2,766,857,000 3,050,292,000 3,163,544,000
Profit after tax x 100%
Shareholders’ equity =11.35% =10.72% =12.54%

Earnings per share 314,036,000 328,047,000 393,160,000

584,446,000 598,404,000 1,817,726,000
Profit available to
ordinary shareholders = RM 53.73 = RM 54.82 = RM 21.63
Number of ordinary
shares issued

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Profitability Ratio – ASTRO MALAYSIA HOLDINGS BERHAD

Year 2019 Year 2020 Year 2021

Ratio Formula
(RM) (RM) (RM)

Gross profit margin 1,944,782,000 x 100% 1,895,561,000 x 100% 1,619,805,000x100%

5,479,048,000 4,911,803,000 4,359,668,000
Gross profit x 100%
Sales =35.49% =38.59% =37.15%

Net profit margin 462,921,000 x 100% 644,615,000 x 100% 527,825,000 x 100%

5,479,048,000 4,911,803,000 4,359,668,000
Profit after tax x 100%
Sales =8.45% =13.12% =12.11%

Operating profit 651,145,000 x 100% 862,680,000 x 100% 692,843,000 x 100%

margin 5,479,048,000 4,911,803,000 4,359,668,000

Operating profit x 100% =11.88% =17.56% =15.89%

Sales

Return on assets 460,824,000 x 100% 644,615,000 x 100% 527,825,000x100%

6,259,558,000 7,708,475,000 5,785,222,000
Profit after tax x 100%
Total assets =7.36% =8.36% =9.12%

Return on equity 460,824,000 x 100% 644,615,000 x 100% 527,825,000 x 100%

678,908,000 938,760,000 1,148,765,000
Profit after tax x 100%
Shareholders’ equity =67.88% =68.67% =45.95%

Earnings per share 462,921,000 655,298,000 539,847,000

5,214,006,000 5,214,369,000 5,214,507,000
Profit available to
ordinary shareholders = RM 0.09 = RM 0.13 = RM 0.10
Number of ordinary
shares issued

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Analysis of the relevant profitability ratios

TIME dotCom

Gross Profit Margin

The gross profit margin for TIME dotCom shows an increase every year. For the year
2019, TIMEdotCom shows 58.56%, the year 2020 is 59.89% and for the year 2021 is
60.72%. This gross profit margin ratio is considered healthy and satisfactory. It shows the
profit each ringgit of sales can be used to pay sales and administration expenses. TIME
dotCOm shows lower expenses or costs involved in implementing sales activity. The
industry average is 30%. TIME dotCom shows a satisfactory gross profit margin
compares industry average.

Net Profit Margin

The net profit margin for TIME dotCom shows fluctuate for 3 years. In the year 2019,
TIME dotCom shows 28.19%, year 2020 shows 26.73%, and year 2021 is 28.42%. The
industry average is 6.4%. TIME dotCom shows the ability of the company to generate net
profit from each ringgit of sale after deducting all expenses. The higher net profit margin
show efficiency in purchase management with low purchasing costs. The year 2020
shows a decrease from 2019 however the year 2021 increased to 28.42% and higher than
year of 2019 and 2020. Compared to the industry average, which only produced 6.4 cents
for each ringgit of sales, TIME dotCom was able to produce more net profit per ringgit of
sales. Overall in net profit margin, TIME dotCom shows satisfactory and healthy.

Operating Profit Margin

TIMES dotCom shows an increase every year as a result of the operating profit margin.
This demonstrates how TIME dotCom operates effectively and controls operating
expenses to produce increased earnings before interest and tax. TIMES dotCom shows in
the year 2019 is 29.46%, the year 2020 is 34.59% and the year 2021 is 38.15%. TIMES
dotCom shows able to operate efficiently in order to achieve low cost but high returns.
The industry average is 10%. TIMES dotCom shows satisfactory.

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Return On Assets

TIMES dotCom shows a fluctuation in 3 years from 2019, 2020 and 2021. In the year
2019, it shows 8.92%, in the year 2020 is 8.38% and in the year 2021 is 9.63%. The year
2020 shows a decrease from 2019 however the year 2021 increased again higher than
year of 2019 and 2020. This demonstrates that TIMES dotCom manages its assets more
effectively to create a profit when compared to other businesses in the sector.
Management of TIMES dotCom efficiency in using all assets to generate company profit.

Return On Equity

TIMES dotCom shows a fluctuation in 3 years from 2019, 2020 and 2021. In the year
2019, it shows 11.35%, in the year 2020 is 10.72% and in the year 2021 is 12.54%. The
year 2020 shows a decrease from 2019 however the year 2021 increased again higher
than year of 2019 and 2020. This demonstrates that TIMES dotCom manages its assets
more effectively to create a profit when compared to other businesses in the sector.
Management of TIMES dotCom efficiency in using all assets to generate company profit.
This indicates that the management of the business is more effective than the sector
average (8%). The higher the ratio, which refers to shareholders holding ordinary shares,
the more effectively the company is generating profits for them.

Earnings Per Share

It shows the net profit that is generated from each ordinary share. It is given priority to
the management and investors because shows the company‘s success and performance.
The higher value is a good benefit to ordinary shareholders. The company shows
RM53.73 in year 2019, the year 2020 is RM54.82 and the year 2021 is RM21.63. We can
see the earnings per share increase from 2019 to 2020 but decrease in 2021 by about half
of the price from 2019 and 2020. Even though the price in 2021 is smaller than the other
2 years but it is still good and satisfactory compared to the industry average which is
RM0.26. This difference's worth is negligible and, in reality, it corresponds to the actual
sum that will be paid out to shareholders.

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Astro Malaysia Holdings Berhad

Gross Profit Margin

The gross profit margin for Astro shows a fluctuation for 3 years. For the year 2019, it
shows 35.49%, the year 2020 is 38.59%, and for the year 2021 is 37.15%. The year 2020
shows a decrease from 2019 and an increase back in 2021 with not much difference. This
gross profit margin ratio is considered healthy and satisfactory. It shows the profit each
ringgit of sales can be used to pay sales and administration expenses. Astro shows lower
expenses or costs involved in implementing sales activity. The industry average is 30%.
Astro shows a satisfactory gross profit margin compares industry average.

Net Profit Margin

The net profit margin for Astro shows fluctuate for 3 years. In the year 2019, Astro shows
8.45%, the year 2020 shows 13.12%, and the year 2021 is 12.11%. The industry average
is 6.4%. Astro shows the ability of the company to generate net profit from each ringgit
of sale after deducting all expenses. The higher net profit margin show efficiency in
purchase management with low purchasing costs. The year 2021 shows a decrease from
2020 but still higher than 2019. Compared to the industry average, which only produced
6.4 cents for each ringgit of sales, Astro was able to produce more net profit per ringgit of
sales.. A low or decreasing net profit margin indicates that Astro‘s performance is not
good and the company's operations are increasingly less efficient. This will harm the
company because it will be difficult to expand its business and the company's
performance may also decline in the future. Therefore, it is necessary to know the factors
that cause the fluctuation of the net profit margin ratio so that the company can find
solutions / alternative problem-solving as a form of evaluating company performance.
Based on the company's financial statements for 3 years, it can be seen that the tendency
of the net profit margin ratio to fluctuate, which indicates that the company's performance
is not stable and can be said to be unfavorable and the company's operations are
increasingly less effective. Therefore, it is necessary to know the factors that cause the
fluctuation of the net profit margin ratio. However, the net profit margin still shows
satisfactory and healthy than the industry average.

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Operating Profit Margin

Astro shows fluctuating margin for 3 years of the operating profit margin. This
demonstrates how Astro operates effectively and controls operating expenses to produce
increased earnings before interest and tax. Astro shows in the year 2019 is 11.88%, in the
year 2020 is 17.56% and the year 2021 is 15.89%. The year 2021 shows a decrease from
2 years before but still higher than the industry average. One of the most crucial
accounting measures of operational efficiency is operating margin, which is universally
accepted. From the operating profit margin formula, we can see that the sales and
operating profit of Astro show a decrease and its influence of the decreased margin.
However, Astro shows satisfaction and is able to operate efficiently in order to achieve
low cost but high returns. The industry average is 10%.

Return On Assets

Astro shows an increase in 3 years from 2019, 2020 and 2021. In the year 2019, it shows
7.36%, in the year 2020 is 8.36% and in the year 2021 is 9.12%. This demonstrates that
Astro manages its assets more effectively to create a profit when compared to other
businesses in the sector. Management of Astro efficiency in using all assets to generate
company profit.

Return On Equity

Astro shows a fluctuation in 3 years from 2019, 2020 and 2021. In the year 2019, it
shows 67.88%, in the year 2020 is 68.67% and in the year 2021 is 45.95%. The year 2020
shows an increase from 2019 however the year 2021 decreased lower than years of 2019
and 2020. Increased debt can lead to a reduction in equity because it increases the amount
of equity needed to generate returns. However, the result is still more effective than the
sector average which is 8%. Astro manages its assets effectively to create a profit when
compared to other businesses in the sector. Management of Astro efficiency in using all
assets to generate company profit.

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Earnings Per Share

It shows the net profit that is generated from each ordinary share. It is given priority to
the management and investors because shows the company‘s success and performance.
The higher value is a good benefit to ordinary shareholders. The company shows
fluctuation in earnings per share which are RM0.09 in the year 2019, the year 2020 is
RM0.13 and the year 2021 is RM0.10. We can see the earnings per share increase from
2019 to 2020 but decrease in 2021. This shows that Astro has lower earnings per share
than the industry average which is RM0.26. Earnings per share are primarily influenced
by a company's income and the number of outstanding ordinary shares. An increase in
income would result in an increase in EPS, whereas a loss in income would result in a
decrease in EPS if the number of shares remained constant. Companies may have to pay
more interest if they take on more debt, which could lower their EPS.

Comparison of the companies’ profitability (TIME dotCom vs Astro Malaysia

Holding Berhad)

Profitability Industry TIME dotCom Astro

ratio average 2019 2020 2021 2019 2020 2021
Gross Profit
30% 58.56% 59.89% 60.72% 35.49% 38.59% 37.15%
Margin
Net Profit
6.4% 28.19% 26.73% 28.42% 8.45% 13.12% 12.11%
Margin
Operating
10% 29.46% 34.59% 38.15% 11.88% 17.56% 15.89%
Profit Margin
Retun on
4.8% 8.92% 8.38% 9.63% 7.36% 8.36% 9.12%
Assets
Return on
8% 11.35% 10.72% 12.54% 67.88% 68.67% 45.95%
Equity
Earning Per
0.26 53.73 54.82 21.63 0.09 0.13 0.01
Share (RM)

Table 1: Comparison of the TIME dotCOm and Astro of the profitability ratio.

Table 1 shows the comparison of the profitability ratio of the two companies which
are TIME dotCom and Astro Malaysia Holding Berhad. It shows the profitability ratio for

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3 years which are 2019, 2020, and 2021. Using the information at a single point in time,
profitability ratios are a class of financial measurements that are used to evaluate a
company's capacity to generate profits in relation to its revenue, operating costs, balance
sheet assets, or shareholders' equity over time. They rank high among the metrics most
frequently employed in financial analysis.

Profitability ratios can provide insight into a company's financial health and
performance. The optimum use of ratios is as a comparison tool, not as a standalone
metric. Efficiency ratios, which take into account how effectively a company uses its
assets internally to generate money (as opposed to after-cost earnings), can be used in
conjunction with profitability ratios.

Comparison of Gross Profit Margin

By Table 1, we can see the gross profit margin for TIMES dotCom for 3 years is higher
than Astro. TIMES dotCom shows increasing every year for 3 years but Astro shows a
fluctuation for 3 years. TIMES dotCom is considered more healthy and satisfactory than
Astro. This means Astro needs to improve the performance of the company. Gross profit
margin can increase when the revenue increase. The management of Astro can raise
profit margins in a number of ways, including through increasing revenues. By raising
the cost of their goods or services, managing the company more successfully, eliminating
wasteful expenditure, and lowering overhead costs, management can also boost profit
margins. Astro may increase its revenue by focusing on customer retention. The
telecommunications and media industry growing fast with much competition and
packages offered by other companies. Astro may wish to look to its current customer
base for revenue-generating opportunities without significantly increasing running costs.
Start off by establishing clear and realistic expectations that their clients can rely on right
away. Show consideration for the customers and do whatever else is necessary to assist
them while letting them know they are getting a lot of use out of their service. If Astro
takes this route and does it properly, it may increase revenue at a low cost, increasing its
profit margin and enhancing customer loyalty.

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Comparison of Net Profit Margin

Net profit margin shows TIMES dotCom is higher than Astro. This means that TIMES
dotCom indicates that procurement and related costs are better managed compared to
Astro. TIMES dotCom had managed to generate a higher net profit for each ringgit of
sale compared to Astro within 3 years. The amount of profit that is still left over after
taxes is known as the net profit margin. As a result, it provides the most precise
understanding of a company's profitability. From Table 1, we can see that Astro has
fluctuated in percentage for 3 years. Astro can raise net profit margin by either growing
sales or decreasing marketing costs and operating expenses. Companies must concentrate
on marketing and customer outreach techniques that go beyond conventional mass
promotions in order to develop new revenue sources.

Operating Profit Margin

The operating profit margin shows that TIMES has more satisfaction and it is able to
operate more efficiently than Astro. TIMES also operates effectively and controls
operating expenses to produce increased earnings before interest and tax better than
Astro. It is possible to increase operating profit margin by either increasing revenue or
decreasing expenditures. These two strategies for raising profit margins are frequently
linked: boosting sales can help a business attain economies of scale, cutting production
costs while also generating more income. Astro management needs better managerial
controls, more effective resource usage, better pricing, and more successful marketing
can all increase operating profit. The operational margin can be defined as the ratio of a
company's profits from its main business to its total revenues. Investors can then
determine if a company derives the majority of its revenue from its main businesses or
from other sources, like investment.

Comparison of Return On Assets

Return on assets between TIMES and Astro is not much different. However, TIMES is
higher than Astro. This means TIMES is better at managing assets to generate profit
compared with Astro. Astro ratio is higher than the industry average but still lower than
TIMES. Astro needs to improve the effectiveness of the company in using its assets to

20
generate profit. Astro needs to improve its net income and total assets to match similar
numbers in order to increase its return on assets. By raising its profit margin or operating
efficiency, as determined by its asset turnover, Astro can raise its return on assets and
subsequently its return on equity. By reducing expenses as a percentage of revenue,
margins are increased. Selling more products or services with a given amount of assets
can increase asset turnover.

Comparison of Return On Equity

Table 1 shows the comparison between TIMES and Astro in return on equity. It shows
that Astro is higher than TIMES. This shows that Astro is more satisfactory and able to
generate high profits for its owners. compared to TIMES. Astro manages the company
more efficient in generating profit for its ordinary shareholders compared to the TIMES
company. TIMES can increase their return on equity in a number of ways. These tactics
include boosting profits while cutting expenses, increasing productivity, expanding asset
investments while cutting liabilities, or upping dividend payments or share buybacks.

Comparison of Earnings Per Share

Earning per share between TIMES and Astro shows that TIMES is a bigger ratio than
Astro. This means TIMES has success in their performance and how they are influenced
by a company's income and the number of outstanding ordinary shares compared to
Astro. Earnings per share (EPS) measures a firm's profitability on a per-share basis and is
a number investors frequently use to appraise a stock or company. Astro can raise its
earnings per share (EPS) or lower its share count through share buybacks, but a firm
whose outstanding share count rises faster than its earnings would see a decline in EPS.

21
Summary

The goal of this paper was to analyze the performance of two telecommunications
and media sectors based on the Main Market of Bursa Malaysia. Two companies that
were chosen are TIMES dotCom and Astro Malaysia Holding Berhad. Based on the six
calculations of the profitability ratio, it is clear that analysts and investors use these ratios
to measure and assess a company's capacity to generate revenue (profit) in relation to
sales, operating expenses, balance sheet assets, and shareholders' equity over a specific
time period. They show how effectively a company utilizes its resources to produce profit
and shareholder value. Most businesses frequently aim for a larger ratio or value because
doing so typically indicates that the company is operating profitably and creating cash
flow. The ratios are most helpful when compared to other companies in a similar industry
or to earlier time periods.

Both companies which are TIMES dotCom and Astro show that they manage well
the companies better than the industry average ratio. TIMES dotCom shows overall is
satisfactory and healthy because the ratio shows very good if compare to Astro. TIMES
dotCom also shows good operation which can achieve the efficiency of company
operation. The gross profit margin shows a better ratio than the industry average. The
operating profit margin is satisfactory to the industry average. From the scope of the
assets, TIMES achieves maximum use of its assets to generate sales for the company.
They manage to use all the assets in order to generate good profit for the company. This
performance can see in ratios of return on assets and return on equity. It shows
satisfactory overall. TIMES also can generate good earnings per share from the year 2019
until 2021.

Astro Malaysia Holding Berhad shows lower performance than TIMES dotCom. The
profitability ratios margin show Astro is more satisfactory than the industry average but
still needs to improve to increase the ratio to be better in the future. The gross profit
margin, net profit margin, and operating margin are higher than the industry average
means that Astro can manage efficiency the purchasing department and cost of the

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company very well but need improvement to increase the gross profit in the future to
compete with TIMES dotCom. Astro shows satisfaction in return on assets, and return on
equity but not for earnings per share. It means this company is not effective in generating
returns from investments and sales. It also can show how a company is efficient and
effective in achieving its profit objective. Earnings per share show lower than the
industry average and show unsatisfactory to the company. It is mean Astro needs to
improve the shares issued for the better status of the shareholders. Since it can be used to
track a company's success and profitability over time, earnings per share is a crucial
metric for investors. Additionally, earning per share contributes to the price-to-earnings
ratio, one of the most popular pricing indices used by investors to determine the worth of
a stock. Overall for Astro, it shows satisfaction in asset management and profitability
ratios. However, this company needs improvement in a lot of areas in management which
is how to increase the revenue, how to manage inventory efficiency, how to get lower
expenditure and cost, how to purchase management achieve low purchasing costs for the
company, and how the company operates efficiently. From the usage of company assets,
this company is able to achieve above the industry average but Astro must improve its
performance and manage its assets better to compete with other telecommunication and
media industries. That means this company is efficient in using company assets to
generate sales to the company.

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References

Assoc Prof Dr Yusnidah Ibrahim, Faudziah Zainal Abidin, Norlida Abd Manab,
Rusmawati Ismail, & Zaemah Zainuddin. (2021). BBPW3103 Financial
Management 1. Kuala Lumpur: Open Universiti Malaysia.

Berhad, M. P. (2023). Who We Are. Von https://www.mediaprima.com.my/:

https://www.mediaprima.com.my/who-we-are.html abgerufen

Berhad, T. d. (2019). Annual Report 2019. Shah Alam: Time dotCom Berhad.

Berhad, T. d. (2020). Annual Report 2019. Shah Alam: Time dotCom Berhad.

Berhad, T. d. (2021). Annual Report 2019. Shah Alam: Time dotCom Berhad.

Bhd, A. M. (2019). INTEGRATED ANNUAL REPORT 2021. Kuala Lumpur: Astro

Malaysia Holding Sdn. Bhd.

Bhd, A. M. (2020). INTEGRATED ANNUAL REPORT 2021. Kuala Lumpur: Astro

Malaysia Holding Sdn. Bhd.

Bhd, A. M. (2021). INTEGRATED ANNUAL REPORT 2021. Kuala Lumpur: Astro

Malaysia Holding Sdn. Bhd.

dotCom, T. (2023). About Us. Von https://www.time.com.my:

https://www.time.com.my/about-us/our-company abgerufen

Systems, M. N. (2021). About Us. Von https://corporate.astro.com.my:

https://corporate.astro.com.my/our-company/about-us abgerufen

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