1.

1 INTRODUCTION

1.1.1 Company logo

1.1.2 Profile and background of the company

DiGi Telecommunications Sdn.Bhd is known as Mutiara Telecommunications Sdn.Bhd. The

company was formerly known as Mutiara Telecommunications Sdn Bhd and changed its
name to Digi Telecommunications Sdn Bhd in January 1999. Digi Telecommunications Sdn
Bhd is a mobile service provider based in Malaysia. DiGi is a mobile communication
company that engaged in the establishment, maintenance and provision of
telecommunication and related services. The company was founded on 24 May 1995 and
headquartered in Shah Alam, Malaysia. Besides that, DiGi is the first telecommunication
industry to launch and operate a fully digital cellular network in Malaysia. So, Digi can be
getting more market share on Malaysia to compete with others competitors. Digi vision is to
be seen as stars in excellent customer experience by enhancing communications to improve
customers’ quality of life, at home, work and play. Besides that, the mission of Digi is
providing customers specific solutions to meet individual needs for communications,
connectivity and access to information and security. It has provided an environment where
our employees can grow and be fulfilled in position. 
1.1.3 Business activities

DiGi is a leading mobile telecommunications company providing a range of mobile and

wireless services under the DiGi Prepaid and DiGi Postpaid brand name, delivering voice,
mobile content and data services to both individual and corporate customers. Its data service
focuses on the development of new mobile interactive services which include infotainment
via SMS, WAP, GPRS and MMS. Mobile content includes value-added and entertainment
content for mobile phone. One of the activities is presented by DiGi telecommunications
companies is call Spark. Spark! is a 5 days 4 nights stay away program and designed to
spark original and creative thinking amongst Malaysian pre-university youth between 17 to
19 years old. Another activity presented by DiGi is postrophe. Postrophe is DiGi’s web-
based creative expression platform that runs programmes and activities through which all
Malaysians can discover and develop their artistic creative talents. 

1.1.4 Competitors

There are some competitors that DiGi confronted with. One of the primary competition is
Maxis Berhad. Maxis Berhad is the leading mobile marketing communications service
contributer in Malaysia over 11. 4 million mobile users. Maxis Berhad offered some services.
Such as, prepaid, postpaid, 3G service and Maxis Broadband. While another competition is
Celcom Axiata Berhad, also known as Celcom, is the oldest telecommunication company in
Malaysia. Celcom is now generally a world amount for mobile communication. That they had
extended the initial frequency music group for GSM from 900 MHz to 1800 MHz. Celcom
provide Virtual Mobile Operator services(VMO) and rural marketing communications
services by using CDMA Technology and Satelite Telephone.

1.2 FINANCIAL ANALYSIS

1.2.1 What is financial analysis?

Financial analysis is the process of evaluating businesses, projects, budgets and other
finance-related entities to determine their performance and suitability. Typically, financial
analysis is used to analyze whether an entity is stable, solvent, liquid or profitable enough to
warrant a monetary investment. When looking at a specific company, a financial analyst
conducts analysis by focusing on the income statement, balance sheet, and cash flow
statement.
1.2.2 Explain the objective financial analysis?

The objective of financial analysis is to provide decision makers information about a

business enterprise for use in decision-making. The following objective is to assessment of
past performance and current position. And then, to predict of net income and growth
prospects and to prediction bankrupt and failure.

1.2.3 What are the financial statement involve in preparing the financial analysis?

The finance function reports on these internal control systems through the preparation of
financial statements, such as income statements, balance sheets, and cash flow statements.

1.2.4 Who are the users of financial statement?

The main users of financial statements are Investors and potential investors are interested in
their potential profits and the security of their investment. Future profits may be estimated
from the target company's past performance as shown in the income statement. And then,
Employees and trade union representatives need to know if an employer can offer secure
employment and possible pay rises. They will also have a keen interest in the salaries and
benefits enjoyed by senior management. After that, Lenders need to know if they will be
repaid. This will depend on the solvency of the company, which should be revealed by the
statement of financial position. Long-term loans may also be backed by 'security' given by
the business over specific assets. The value of these assets will be indicated in the
statement of financial position. Suppliers need to know if they will be paid. New suppliers
may also require reassurance about the financial health of a business before agreeing to
supply goods and Customers need to know that a company can continue to supply them into
the future. This is especially true if the customer is dependent on a company for specialised
supplies.
1.2.5 Calculate the ratio (DIGI BERHAD)

Formula 2017 2018

1. Current ratio = Current Assets 1,885,864 2,089,762
Current Liabilities 2,281,857 2,695,158
= 0.83 times =0.76 times
2. Quick ratio = Current Assets - Inventory 1,885,864 – 59,138 2,089,762 – 61,135
Current Liabilities 2,281857 2,695,158
=0.80 times =0.75 times
3. Inventory ratio = Cost of goods sold 1,514,645 1,543,003
Inventory 59,138 61,135
= 25.61 times =25.24 times
4. Average collection = Account receivable x 365 1,216,988 x 365 1,460,709 x 365
Period Sales 6,340,473 6,527,111
= 70.06 days = 81.68 days

5. Debt ratio = Total Liabilities X 100 5,314,895 x100 5,532,868 x 100

Total Assets 5,833,613 6,206,056
= 91.11 percent = 89.15 percent

6. Times Interest Earned= Earning before Interest 1,985,350 2,079,442

Interest expenses 132,457 129,984
= 14.99 times = 16 times
7. Gross Profit Margin = Gross Profit x 100 4,825,828 x 100 4,984,108 x 100
Sales 6,340,473 6,527,111
= 76.11 percent =76.36 percent

8. Net Profit Margin = Net profit x 100 1,476,698 x 100 1,540,788 x 100
Sales 6,340,473 6,527,111
= 23.29 percent 23.61 percent

9. Return on Assets = Net Profit x 100 1,476,698 x 100 1,540,788 x 100

Total Assets 5,833,613 6,206,056
= 25.31 percent = 24.83 percent

10. Return on Equity = Net Profit x100 1,476,698 x 100 1,540,788 x 100
Total Equity 518,718 673,188
= 284.68 percent = 228.88 percent
1.2.6 Ratio Analysis (DIGI BERHAD)
 1. Current ratio
Current ratio
0.84
0.82
0.8
0.78
0.76
Current ratio of DIGI BERHAD was decreased by
0.74 0.07 times from 2017 to 2018.
0.72
2017 2018 2. Quick ratio

Quick ratio
0.8
0.78
0.76
0.74
0.72
2017 2018

Quick ratio of DIGI BERHAD was decreased by 0.05 times from 2017 to 2018.

3. Inventory ratio
Inventory ratio
25.7
25.6
25.5
25.4
Inventory ratio of DIGI BERHAD for year 2018 is
25.3
25.2 0.37 times lower than 2017.
25.1
4. Average collection Period
25
2017 2018

Average collection Period

84
82
80
78
76
74
72
70
68
66
64
2017 2018

Average collection period of DIGI BERHAD for year 2017 is 70.06 days and 2018 is 81.68
days. So, 2017 is better performance than 2018 because take lower collection period.
5. Debt ratio

Debt ratio
91.5
91
90.5
90
89.5
89
88.5
88
2017 2018

Debt ratio of DIGI BERHAD was decreased by 1.96 percent from 2017 to 2018.

6. Times Interest Earned

Times earned period

16.2
16
15.8
15.6
15.4
15.2
15
14.8
14.6
14.4
2017 2018

Times Interest Earned of DIGI BERHAD for year 2018 is 1.01 times higher than 2017.

7. Gross Profit Margin

Gross Profit Margin

76.4
76.35
76.3
76.25
76.2
76.15
76.1
76.05
76
75.95
2017 2018

Gross Profit Margin of DIGI BERHAD was increased by 0.25 percent from 2017 to 2018.

8. Net Profit Margin

 Net Profit Margin
23.7

23.6

23.5

23.4

23.3

23.2

23.1
2017 2018

Net Profit Margin of DIGI BERHAD was increased by 0.32 percent from 2017 to 2018.

9. Return on Assets

Return on Assets
25.4
25.3
25.2
25.1
25
24.9
24.8
24.7
24.6
24.5
2017 2018

Return on Assets of DIGI BERHAD was decreased by 0.48 percent from 2017 to 2018.

10. Return on Equity

Return on Equity
300
250
200
150
100
50
0
2017 2018

Return on Equity of DIGI BERHAD was decreased by 55.8 percent from 2017 to 2018.
1.1 INTRODUCTION

1.1.1 Company logo

1.1.2 Profile and background of the company

On 19 October 1999, Maxis introduced the prepaid brand "Hotlink".In 2002, Maxis acquired
TimeCel, a rival mobile service provider, from TimedotCom Berhad. Prior to the purchase,
Maxis offered prefix number beginning with 012, and TimeCel 017. On 27 April 2007, an
offer was made to buy out Maxis and privatize the company in preparation for expansions
into the Indonesian, Indian and Qatari markets. The deal was offered by Ananda Krishnan,
who pledged Maxis RM17.46 billion (US$5.1 billion) in exchange for all remaining shares of
the company. The offer is to be formally made by Usaha Tegas, a company owned by
Krishnan, on 3 May 2007, while the Kuala Lumpur Stock Exchange suspends trading of the
company's shares until 3 May. Under the urging of the former Prime Minister Datuk Seri
Najib Tun Razak, Maxis announce that it will re-list the company in Bursa Malaysia on 11
November 2009. The initial public offering, which constitute 30% of the company and involve
its Malaysian operations, will raise at least MYR 11.7 billion. In September 2013, Maxis
prepaid, Hotlink launched its #Hotlink plan, which is claimed to be the first
telecommunications company to offer free internet services on cellular networks, Hotlink
calling it "Free Basic Internet" which offers download speeds up to 64kbit/s and which the
management says is enough for checking Facebook, Twitter and Wikipedia on mobile
optimized sites and also essentially eliminating data overage charges which as previously
implemented at MYR 0.10/10KB.

1.1.3 Business activities

Because of the Maxis Berhad’s telecommunication services are offered all around the
country, so, the services are being targeted all the potential customers wherever in Malaysia,
no matter with rural and urban areas. Maxis Berhad uses product differentiation to target
different group of the customers. Different group of customers may have different needs and
wants. Different plans and services are offered to reach the different group of customers.
From the age segments which are below 25 and above 25, Maxis Berhad is using different
plans to target these 2 groups of potential customers, both male and female, have the
different intention to use the telecommunication services. For the customers age below 25,
Maxis Berhad targets this group by offering the prepaid plan to them, this group of
customers usually use phone to have entertainment, communicate with friends, and enjoy
the social life, they are usually not necessary to make the call in whatever situation, they just
use the telecommunication service to have entertainment and lack dealing with important
case, but they use it constantly.

1.1.4 Competitors

Competition between Maxis and Digi which both of them is from the same business field that
selling the same product which is mobile communication. Maxis and Digi operating in the
same business field which provide mobile communication services to customers. Digi
targeted on teenagers by providing an entertainment service for this group consumers such
as provide free internet connection with no cost for Digi consumers to view Facebook
everyday by using stated link. Besides, Maxis doesn’t provide this kind of opportunity for
their consumers because most properly they target on those working populations. Maxis
promoting family plans package that charges low cost for family member who using the
same network to encourage family member sign up the package to save their cost.
Otherwise, Digi has come out with a package that is once we have send message more than
RM 2 each day the continue cost will be free as consumers message to the same network. It
only charge RM 2 each day if consumers fulfil the package condition.

1.2 FINANCIAL ANALYSIS

1.2.1 What is financial analysis?

Financial analysis is the process of evaluating businesses, projects, budgets and other
finance-related entities to determine their performance and suitability. Typically, financial
analysis is used to analyze whether an entity is stable, solvent, liquid or profitable enough to
warrant a monetary investment. When looking at a specific company, a financial analyst
conducts analysis by focusing on the income statement, balance sheet, and cash flow
statement.

1.2.2 Explain the objective financial analysis?

The objective of financial analysis is to provide decision makers information about a
business enterprise for use in decision-making. The following objective is to assessment of
past performance and current position. And then, to predict of net income and growth
prospects and to prediction bankrupt and failure.

1.2.3 What are the financial statement involve in preparing the financial analysis?

The finance function reports on these internal control systems through the preparation of
financial statements, such as income statements, balance sheets, and cash flow statements.

1.2.4 Who are the users of financial statement?

The main users of financial statements are Investors and potential investors are interested in
their potential profits and the security of their investment. Future profits may be estimated
from the target company's past performance as shown in the income statement. And then,
Employees and trade union representatives need to know if an employer can offer secure
employment and possible pay rises. They will also have a keen interest in the salaries and
benefits enjoyed by senior management. After that, Lenders need to know if they will be
repaid. This will depend on the solvency of the company, which should be revealed by the
statement of financial position. Long-term loans may also be backed by 'security' given by
the business over specific assets. The value of these assets will be indicated in the
statement of financial position. Suppliers need to know if they will be paid. New suppliers
may also require reassurance about the financial health of a business before agreeing to
supply goods and Customers need to know that a company can continue to supply them into
the future. This is especially true if the customer is dependent on a company for specialized
supplies.

1.2.5 Calculate the ratio (MAXIS BERHAD)

Formula 2017 2018

1. Current Ratio = Current Asset 2,470,196 2,667,655
3,944,800 4,542,011
Current Liabilities
= 0.63 times = 0.59 times
2. Quick ratio = Current Assets - Inventory 2,470,196 – 4,494 2,667,655 – 15,919
3,944,800 4,542,011
Current Liabilities
= 0.63 times = 0.58 times
3. Inventory ratio = Cost of goods sold 3,116,505 3,010,000
4,494 15,919
Inventory
= 693.48 times = 189.08 times
 4. Average collection = Account receivable x 365 1,809,783 x 365 2,056,512 x 365
9,419,290 9,192,436
period Sales
= 70.12 days = 81.65 days
5. Debt ratio = Total Liabilities x 100 12,188,429 x 100 12,656,830 x 100
Total Assets 19,134,442 19,806,561

= 63.69% = 63.90%
6. Times Interest Earned = Earing before Interest 2,878,420 2,368,722
445,032 389,054
Interest expenses
= 6.47 times = 6.09 times
7. Gross Profit Margin = Gross Profit x 100 6,302,785 x 100 6,182,436 x100
Sales 9,419,290 9,192,436

= 66.91% = 67.26%
8. Net Profit Margin = Net profit x 100 2,180,042 x 100 1,779,719 x 100
Sales 9,419,290 9,192,436

= 23.14% = 19.36%
9. Return on Assets = Net Profit x 100 2,180,042 x 100 1,779,719 x 100
Total Assets 19,134,442 19,806,561

= 11.39% = 8.99%
10. Return on Equity = Net Profit x100 2,180,042 x 100 1,779,719 x 100
Total Equity 6,946,013 7,149,731

= 31.39% = 24.89%

1.2.6 Ratio Analysis (MAXIS BERHAD)

1. Current Ratio
 Current Ratio
0.64
0.63
0.62
0.61
0.6
0.59
0.58
0.57
0.56
2017 2018

Current ratio of MAXIS BERHAD was decreased by 0.04 times from 2017 to 2018. Which is
0.63 times in 2017 and 0.59 times in 2018.

2. Quick Ratio

Quick Ratio
0.64
0.63
0.62
0.61
0.6
0.59
0.58
0.57
0.56
0.55
2017 2018

Quick ratio of MAXIS BERHAD was decreased by 0.05 times from 2017 to 2018. Which is
0.63 times in 2017 and 0.58 times in 2018.

3. Inventory Ratio
 Inventory Ratio
800
700
600
500
400
300
200
100
0
2017 2018

Inventory ratio of MAXIS BERHAD was decreased by 504.4 times from 2017 to 2018. Which
is 693.48 times in 2017 and 189.08 times in 2018.

4. Average collection period

Average collection period

84
82
80
78
76
74
72
70
68
66
64
2017 2018

Average collection period of MAXIS BERHAD was increased by 11.53 days from 2017 to
2018. Which is 70.12 days in 2017 and 81.65 days in 2018.
5. Debt Ratio

Debt Ratio
63.95
63.9
63.85
63.8
63.75
63.7
63.65
63.6
63.55
2017 2018

Debt Ratio of MAXIS BERHAD was increased by 0.21% from 2017 to 2018. Which is
63.69% in 2017 and 63.90% in 2018.

6. Times Interest Earned

Times Interest Earned

6.5

6.4

6.3

6.2

6.1

5.9
2017 2018

Times Interest Earned of MAXIS BERHAD was decreased by 0.38 times from 2017 to 2018.
Which is 6.47 times in 2017 and 6.09 times in 2018.
7. Gross Profit margin

Gross Profit margin

67.3

67.2

67.1

67

66.9

66.8

66.7
2017 2018

Gross Profit margin of MAXIS BERHAD was increased by 0.35% from 2017 to 2018. Which
is 66.91% in 2017 and 67.26% in 2018.

8. Net Profit margin

Net Profit margin

24
23
22
21
20
19
18
17
2017 2018

Net Profit margin of MAXIS BERHAD was decreased by 3.78% from 2017 to 2018. Which is
23.14% in 2017 and 19.36% in 2018.
9. Return on assets

Return on assets
12

10

0
2017 2018

Return on assets of MAXIS BERHAD was decreased by 2.40% from 2017 to 2018. Which is
11.39% in 2017 and 8.99% in 2018.

10. Return on equity

Return on equity
35
30
25
20
15
10
5
0
2017 2018

Return on equity of MAXIS BERHAD was decreased by 6.50% from 2017 to 2018. Which is
31.39% in 2017 and 24.89% in 2018.