After calculation the Gross profit margin ratio it shows that Gamuda Company is lower than IJM Berhad. Since Gamuda Company is 17.23% but IJM Berhad is 23.76% and showing that IJM Berhad is higher Gamuda Company.
Operating profit margin ratio shows that Gamuda Company is lower than IJM Berhad. The reason for that Gamuda Company is 10.58% but IJM Berhad is 18.65% and showing that IJM Berhad is higher Gamuda Company.
Basic earning power shows that Gamuda Company is lower than IJM Berhad. The reason for that Gamuda Company is 3.97% but IJM Berhad is 5.96% and showing that IJM Berhad is higher Gamuda Company.
Return on total assets shows that IJM Berhad is lower than Gamuda Company. The reason for that IJM Berhad is 2.65% but Gamuda Company is 4.28% and showing that Gamuda Company is higher than IJM Berhad.
Return on common equity it shows that IJM Berhad is lower than Gamuda Company. The reason for that IJM Berhad is only 6.48% but Gamuda Company is 8.62% and showing that Gamuda Company is higher than IJM Berhad.
This point to show that they are all lower than industry average, and company was ineffective in controlling its spending and inefficiently using its assets and capital in running business activities at higher operating costs to reduce its profit earning.
Apart from, Liquidity it has current ratio it shows that IJM Berhad is lower than Gamuda Company. The cause for that is IJM Berhad is only 2.09:1 but Gamuda Company is 2.18:1and showing that Gamuda Company is higher than IJM Berhad.
Acid-test ratio shows that IJM Berhad is lower than Gamuda Company. The explanation for that IJM Berhad is only 1.89:1 but Gamuda Company is 2.14:1and showing that Gamuda Company is higher than IJM Berhad.
This is because they are both lower than industry average which indicating that company might have lesser amount of current assets and in relation to its current liabilities so that company has low liquidity to finance in short-term debts and might be facing some short-term problem.
In addition, assets management has inventory turnover it shows that IJM Berhad is lower than Gamuda Company. The explanation for that IJM Berhad is only 5.78 times but Gamuda Company is 25.49 times it showing that Gamuda Company is higher than IJM Berhad.
Inventory turnover is much lower than industry average it's representing that company has slow stock turnover in business so goods purchased and kept in store were very slowly taken out for resale, in resulting there was large amount of stock accumulated to tie up money and poor inventory management.
Total assets turnover shows that IJM Berhad is lower than Gamuda Company. The explanation for that IJM Berhad is only 0.32 times but Gamuda Company is 0.37 times it showing that Gamuda Company is higher than IJM Berhad. Total assets turnover is also lower than industry average its signifying that company was inefficiently is using assets in business activities and causing lower sales generated in relation to its assets value and poor assets management.
Debtor ratio shows that IJM Berhad is lower than Gamuda Company. The explanation for that IJM Berhad is only 0.54:1 but Gamuda Company is 0.65:1 it showing that Gamuda Company is higher than IJM Berhad.
Days sales outstanding show that the IJM Berhad is lower than Gamuda Company. The explanation for that IJM Berhad is only 197.1days but Gamuda Company is 237.25days it showing that Gamuda Company is higher than IJM Berhad.
Debtor ratio and days sales outstanding both are higher than industry average is representative that company has allowed longer credit time to collect money slowly from customers it causing large amount from the debtor balance accumulated to tie up money and poor management on debtor collections.
Moreover, market value to common stockholders has earnings per share show that show that the IJM Berhad is higher than Gamuda Company. It is because IJM Berhad is RM0.25 but Gamuda Company is RM0.14 it showing that IJM Berhad is higher than Gamuda Company.
In price earnings ratio show that IJM Berhad is lower than Gamuda Company. The explanation for that IJM Berhad is only 19.2times but Gamuda Company is 22.86 times it showing that Gamuda Company is higher than IJM Berhad.
Earnings yield shows that the IJM Berhad is higher than Gamuda Company. It describe as the Gamuda Company is 5.83% only but IJM Berhad is 6.94% it showing that IJM Berhad is higher than Gamuda Company.
Lastly, market price per value is shows that the IJM Berhad is lower than Gamuda Company. It describe as the Gamuda Company is 1.99:1 but IJM Berhad is 1.24:1 it showing that IJM Berhad is lower than Gamuda Company.
Conclusion
Business performance are to strategic to get the information that most of the firm is the form of strategic process, outcome measurement, and most to the individuals within the firm it was performance measurement, incentives and motivation. Since business performance are a primary means of directing what a firm knows and learns and how does the company doing. Lastly, they may maybe become the single most strategic information system resource in the firm. IJM Corporate Berhad had a better performance because using its assets and capital in running business activities at higher operating costs to reduce its profit earning. Which means that Gross profit higher is will make the operating cost reduce.
Question 2
2.0 What is financial market?
Financial market is an organization and people who are lack of fund and want to borrow money are brought together with those having surplus fund for lending out in the financial market so that those lack of fund can borrow money from those having surplus fund in the market.
Financial market also defines as where buyers and sellers participate in the trade of assets such as equities, bonds, currencies and derivatives. Financial markets is having transparent pricing, basic regulations on trading, costs and fees and market forces determining the prices of securities that trade.
Some of the financial markets only allow participants that meet certain criteria, which can be based on factors like the amount of money held, the investor's geographical location, knowledge of the markets or the profession of the participant.
2.1 What is various type of the financial market?
The various type of financial market is as follow:
Money market is a market dealing with short-term, highly debt securities in which funds are borrowed or loaned for short periods of less than one year. Capital market is dealing with stocks or shares intermediate or long-term debts which funds are borrowed or loaned for a long period of one year or more than one year. Mortgage markets are dealing with loans on house, commercial, industrial real estate and farmland. Consumer credit markets are dealing with loans on autos and appliances, as well as loans for education, vacations, and vehicles. Primary markets are which corporations raise capital by issuing new securities or new shares. Secondary markets existing and already outstanding securities or other financial assets are traded among investor after they have been issued by the corporations. Initial public offering (IPO) is the firms or corporations through everyone by offering securities or shares to the public for the first time. E.g.: New Company. Private market is the financial transaction work privately and directly between two parties without going to public where the transaction may be structured in any manner that appeals to the two parties. For example, private market transactions are bank loans and placement if debts with insurance companies.
2.2 What is the three different ways for transferring capital or fund from savers to borrowers in the financial market?
There is three different ways are capital or fund can be transferred between savers and borrowers are as follow:
The first are the Direct transfer from savers to borrowers are takes place when a corporation issues and sells its stocks or bonds directly to savers without passing through any financial institution and the corporation as borrower directly delivers through the securities.
Secondly, Indirect transfer from the savers to borrowers through investment banking house means it send from the issuance of a corporation's securities through the investment bank serves as a middleman to facilitate the resell corporation's securities to the savers serves are money lender and receive the fund from the money lender pass through to the investment bank and received by the corporation which acts as borrower.
Thirdly, Indirect transfer from the savers to borrowers through a financial intermediary through investment banking house means it send from the issuance of a corporation's securities through the financial intermediary as a money lender to corporations or borrowers from savers to facilitate the resell corporation's securities to the savers serves are money lender and receive the fund from the money lender pass through to the investment bank and received by the corporation which acts as borrower.
2.3 What are the investment banking house and various financial intermediaries which pay role in the fund transfer from savers to borrowers?
The investment banking house are organization that underwrites and distributes the new issues of business corporations' securities to assist corporation obtain fund for financing. For examples of investment banking house are HSBC and JP Morgan.
Financial intermediaries are specialized financial firms that facilitate to transfer of funds from savers to demanders of capital or borrowers. Financial intermediaries gains economies of scale in analyzing the creditworthiness of potential borrowers in processing and collecting loans. Thus, it was helping the individual savers to diversify their fund investment.
In the financial intermediaries it has Commercial banks, Saving and loan associations, Mutual savings fund, Credit unions, Pension funds, and Life insurance companies.
Commercial banks are the traditional department stores for the finance, serve as a wide variety of savers and borrowers. Commercial banks were the major institutions that handle checking accounts and through the Federal Reserve System expanded or contracted the money supply. Moreover, commercial banks are providing an ever-widening range of service including stock brokerage services and insurance. There are quite different from investment banks since commercial banks lend out money to borrowers whereas investment bank assist business corporation to raise capital or fund from savers.
Savings and loan associations are served individual savers and residential and commercial mortgage borrowers where they collect funds from many small savers and lend out this money to house buyers and types of borrowers. The most significant economic function of savings and loan association is to create liquidity in the capital market.
Mutual saving fund are similar to savings and loan association which accepts saving from individuals and lend out money to maintain a long-term basis to house buyers and consumers.
Credit unions are the cooperative links with the members who are assume to have a common bond. Therefore unions collect savings from members and loan to other members who need funds to their finance for the auto purchase, house improvement and house mortgage. There is the cheapest source of funds available to individual borrowers.
Pension funds are the retirement plans by the corporations or government agencies for their workers and administered primarily by the trust departments of the commercial banks or life insurance companies. In particular invest primarily in bonds, stocks, mortgages and real estate.
Lastly, Life insurance companies are to collect savings in form of annual premiums spend on stocks, bonds, real estate and mortgages. Life insurance makes payments to give benefits of the insured parties and offered a variety of tax-deferred savings plans designed to provide benefits to the participants when they retire.
