public sector accounting
Financial Performance
The table below shows that the analysis of financial ratios.
Types of Ratio
Sub Ratio
Perbadanan Kemajuan Negeri Kedah (PKNK)
Syarikat Air Darul Aman (SADA)
Liquidity Ratio
Current Ratio
2.19 times
-
Quick Ratio
2.04 times
-
Cash Ratio
0.343 times
-
Efficiency Ratio
Working Capital
RM 189,278,871
RM 120,434,000
Inventory Turnover
1.3 times
-
Total Assets Turnover
0.078 times
-
Profitability
Profit Margin
36.8%
7.94%
Operating Margin
45.32%
10.62%
Return on Assets (ROA)
2.95%
2.74%
Return on Invested Capital (ROIC)
54.08%
28%
Solvency Ratio
Total Debt Ratio
32.16%
-
Based on our analysis we found that both companies, Perbadanan Kemajuan Negeri Kedah (PKNK) and Syarikat Air Darul Aman (SADA) use financial performance measurement. For PKNK, they use all the technique in financial performance measurements which are budgeting, financial reporting and financial ratio analysis. However, for SADA we do not obtain enough information as their financial report is confidential. We gain some information from the website, but it is still not sufficient. Hence, we just conclude that SADA only use financial reporting and financial ratio analysis to measure their performance.
In liquidity ratio, we only have information on PKNK. For current ratio and quick ratio, it shows that PKNK has good liquidity in terms of their current assets to meet their current liabilities. However, in cash ratio, PKNK does not have enough cash in order to pay their liabilities in the short term period. It shows that the company not in a good term.
Moreover, in efficiency ratio, both PKNK and SADA working capital are RM 189,278,871 and RM 120,434,000. It shows that PKNK is better than SADA in the aspect of operating liquidity even though both show positive working capital. Besides, a high inventory turnover ratio of PKNK is a signal of company’s management efficiency. Furthermore, for total assets turnover, it shows
The table below shows that the analysis of financial ratios.
Types of Ratio
Sub Ratio
Perbadanan Kemajuan Negeri Kedah (PKNK)
Syarikat Air Darul Aman (SADA)
Liquidity Ratio
Current Ratio
2.19 times
-
Quick Ratio
2.04 times
-
Cash Ratio
0.343 times
-
Efficiency Ratio
Working Capital
RM 189,278,871
RM 120,434,000
Inventory Turnover
1.3 times
-
Total Assets Turnover
0.078 times
-
Profitability
Profit Margin
36.8%
7.94%
Operating Margin
45.32%
10.62%
Return on Assets (ROA)
2.95%
2.74%
Return on Invested Capital (ROIC)
54.08%
28%
Solvency Ratio
Total Debt Ratio
32.16%
-
Based on our analysis we found that both companies, Perbadanan Kemajuan Negeri Kedah (PKNK) and Syarikat Air Darul Aman (SADA) use financial performance measurement. For PKNK, they use all the technique in financial performance measurements which are budgeting, financial reporting and financial ratio analysis. However, for SADA we do not obtain enough information as their financial report is confidential. We gain some information from the website, but it is still not sufficient. Hence, we just conclude that SADA only use financial reporting and financial ratio analysis to measure their performance.
In liquidity ratio, we only have information on PKNK. For current ratio and quick ratio, it shows that PKNK has good liquidity in terms of their current assets to meet their current liabilities. However, in cash ratio, PKNK does not have enough cash in order to pay their liabilities in the short term period. It shows that the company not in a good term.
Moreover, in efficiency ratio, both PKNK and SADA working capital are RM 189,278,871 and RM 120,434,000. It shows that PKNK is better than SADA in the aspect of operating liquidity even though both show positive working capital. Besides, a high inventory turnover ratio of PKNK is a signal of company’s management efficiency. Furthermore, for total assets turnover, it shows