syarikat takaful malaysia fianncial ratios

Topics: Financial ratio, Investment, Financial ratios Pages: 6 (1432 words) Published: December 28, 2013


FINANCIAL PERFORMANCE SYARIKAT TAKAFUL MALAYSIA
1. Introduction
Syarikat Takaful Malaysia Berhad (Takaful Malaysia) was incorporated on the 29th of November 1984. The current authorised capital of Takaful Malaysia is RM500 million and paid-up capital is RM162.817 million. It commenced operation on the 22nd of July, 1985 prior to its official launching on the 2nd of August 1985 by the then Prime Minister of Malaysia, Tun Dr. Mahathir Mohamed The incorporation of Takaful Malaysia was based on the recommendation of the “Task Force on the Study for the Establishment of an Islamic Insurance Company in Malaysia” (Task Force) set up by the Government of Malaysia in 1981. 2. Financial Analysis of the Financial Statements

The financial analysis ratio’s is base on highlights for profitability, liquidity, and management efficiency and leverage ratios. SYARIKAT TAKAFUL MALAYSIA

 
2010
2011
2012
Current Ratio
1.43
2.52
2.39
Operating Income Return on Investment ( OIROI)
32.90%
21.20%
24.60%
Operating Profit Margin
94.33%
92.48%
92.00%
Total Asset Turnover
0.34
0.23
0.26
Fixed Asset Turnover
44.3
29.03
5.82
Return on Equity (ROE)
13.90%
16.80%
40.86%
Profitability Ratio
3.34%
5.53%
7.24%

3. Comments on financial statement of Syarikat Takaful Malaysia 3.1 The current ratio increased from year 2010 to year 2012. The possible reason for the increase is maybe due to expansion of operations overseas in generating receivables. 3.2 Operating income shows a decrease from year 2010 to 2012. The company has shown some improvement on the sales and possibly generating it from the new product that recently was launched by the company and aggressive marketing on giving some value added benefits to its clients. 3.3The company’s profit margin decreased by 2% and it is consistent from year 2010 till year 2012. The possible reason for the increase in margin is due to growth in sales and creating more revenue for the company. Another factor contributing to this factor is improved investment and underwriting result. Its subsidiaries in Indonesia have also shown some recovery. The company has also shown increase in penetrating the Sabah market and working closely with the state government.

3.4The company’s asset turnover decrease from year 2010 till year 2012 and this ratio shows that the company need to find other ways to squeeze more sales out of its assets. However, this is not critical as the core business of the company is getting contributions from clients and assets are to support the distributors and management of the distribution channel. 3.5The company’s fixed asset turnover decrease drastically from year 2010 till year 2012 and it is possible due to the company acquiring of assets overseas to foray into overseas property investments and taking advantage of the overseas devalued market depreciation of some of the country’s currency exchange rate. 3.6The company’s return on equity (ROE) increase from year 2010 till 2012 despite its mudharabah concept. The company has invested in a paperless environment to operate it and it is design to streamline operation procedures. This has also made the company the first insurer to adopt the paperless system. The company has also plans to expand the infrastructure capabilities to include the end to end processing for all documents it handles. The mention factors helped the company to improve operating expenses and thus giving good return for its bottom line. 3.7Profit ratio has increase steadily from year 2010 till year 2012. A few factors has contributed to this increase and mainly due to good investment judgment and cutting operating cost due to its good investment in a new system that allows a paperless environment and much more efficient in procedures and serving the clients accurately and faster. Another factor that might contribute to the increase in profit margin is the company’s reshuffling of its contributing portfolio. Syarikat...
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