100%(12)12 out of 12 people found this document helpful
This preview shows page 19 - 23 out of 35 pages.
32Investor. N.d. “KLSE: TENAGA (5347): TENAGA NASIONAL BHD.” Investor. Accessed May 16, 2018. .
4.1.1 Return on assets (ROA)Return on assets (ROA) is calculated by net income divided by total assets. It is afinancial ratio that shows the percentage of profit a company earns in relation to itsoverall resources (Inc. n.d). Below shows the formula of ROA:ROA=After−tax interest+Net IncomeTotal AssetsROA=[(1−T)×FinanceCost]+Net IncomeTotal AssetsEach data presented on the table were taken from YTL’s annual report 201633and201734. Financial year used were year 2014-2015, 2015-2016 and 2016-2017.201520162017Finance Cost207,980,00035258,383,00036292,291,0003733 YTL Power International Berhad. 2016. Building The Right Thing: Annual Report 2016.LPOWR_AnnualReport_2016-06-30_YTL%20Power-Annual%20Report%202016_-1926287495.pdf.34 YTL Power International Berhad. 2017. Building The Right Thing: Annual Report 2017. 0/6742_YTLPRAnnualReport_2017-06-30_YTL%20Power%20%20Annual%20Report%202017_724610779.pdf35 YTL Power International Berhad. 2016. Building The Right Thing: Annual Report 2016.LPOWR_AnnualReport_2016-06-30_YTL%20PowerAnnual%20Report%202016_1926287495.pdf,65.36 YTL Power International Berhad. 2016. Building The Right Thing: Annual Report 2016.-30/6742_YTLPOWR_AnnualReport_2016-06-30_YTL%20Power-Annual%20Report%202016_-1926287495.pdf, 107.37 YTL Power International Berhad. 2016. Building The Right Thing: Annual Report 2016.-30/6742_YTLPOWR_AnnualReport_2016-06-30_YTL%20Power-Annual%20Report%202016_-1926287495.pdf, 107.
After-tax Interest[(1-24%)x207,980,000]¿158,064,800[(1-24%)x258,383,000]¿196,371,080[(1-24%)x292,291,000]¿222,141,160Net Income920,398,0001,178,456,000787,779,000Total Assets43,637,810,00043,245,591,00048,498,160,000ROA=2.47%=3.18%=2.08%188.8.131.52 ROA Workings tableResults shows that YTL’s ROA were 2.47%, 3.18% and 2.08% for the financialyear 2015, 2016 and 2017 respectively. This means that YTL’s ROA had raisedform FY 2015 to FY2016 but dropped again at FY2017. According to the table,from FY 2016 TO FY 2017, the total assets has increased around 5 billion and thenet income has decreased from 1.178 billion to 0.787 billion. Therefore, thecompany’s ROA worsen around 1.1% which is from 3.18% to 2.08%. The figurein the table basically explained why the ROA worsen, the increase in finance costcaused the net income to decrease, together with the increase in total assets havecaused the ROA to decrease. 4.1.2 DuPont System Analysis on ROADuPont System evaluate a company’s return by breaking it down into several parts.The purpose of this system is to find the underlying reason of a company’sperformance, instead of measuring the performance only. Below shows the formula ofDuPont system on ROA: ROA=Asset Turnover ×Profit MarginROA=RevenueAssets×Net income+AfterTax InterestRevenue000,810,637,43000,398,920800,064,158000,591,245,43000,456,178,1080,371,196000,160,498,48000,779,787160,141,222
DuPont ROA aims to discover the asset turnover and profit margin as these two keyareas explain the reason of the company’s performance on assets.