Intepretation of Financial Statements

7-Eleven Malaysia Holdings Berhad (2018-2022)

Profitability Ratio Year Intepretation & Narrations

2022 2021 2020 2019 2018
RM'000 RM'000 RM'000 RM'000 RM'000
Gross Profit Margin (GPM) Gross Profit 1,053,901 758,997 721,887 740,387 698,617
Sales 3,764,279 2,808,500 2,539,028 2,361,058 2,217,049 According to Profitability Ratio, Gross Profit Margin in 2022 is higher at 28.00%,
GPM 28.00% 27.02% 28.43% 31.36% 31.51% compared to Gross Profit Margin in 2021 which is 27.02%.

Net Profit Margin (NPM) Net Profit 84,328 58,840 35,353 54,084 51,330
Sales 3,764,279 2,808,500 2,539,028 2,361,058 2,217,049 According to Profitability Ratio, Net Profit Margin in 2022 is 2.24% compared to
NPM 2.24% 2.10% 1.39% 2.29% 2.32% Net Profit Margin in 2021 which is 2.10%.

Return on Equity (ROE) Net Profit 84,328 58,840 35,353 54,084 51,330
Total Equity 230,241 182,043 161,221 102,111 92,478 According to Profitability Ratio, Return on Equity in 2022 is 36.63% compared to
ROE 36.63% 32.32% 21.93% 52.97% 55.51% Return on Equity in 2021 which is 32.32%

Year GPM2021 2022

28.20%
GPM 27.02% 28.00%
28.00%
27.80%
27.60%
27.40%
27.20%
27.00%
26.80%
26.60%
26.40%
2021 2022

GPM

Liquidity Ratio
Year
2022 2021 2020 2019 2018 Intepretation & Narrations
RM'000 RM'000 RM'000 RM'000 RM'000

Current Ratio (CR) Current Asset 1,058,248 752,623 566,259 403,437 390,695

Current Liabilities 1,096,934 849,391 902,695 739,963 584,166 For past 5 years, 7E current ratio are below 1 which indicates they may struggle
to pay their bills.
CR 0.96 0.89 0.63 0.55 0.67

Quick Ratio (QR) Current Asset - Inventory 453,054 384,061 288,947 231,330 224,682
Current Liabilities 1,096,934 849,391 902,695 739,963 584,166 The 7E have a low quick ratio and it signals out that the company are not liquid
QR 0.41 0.45 0.32 0.31 0.38 and may not be able to liquidate the cash immediately in case of emergency.

Extra Info: Inventories 453,054 384,061 288,947 231,330 224,682

Efficiency Ratio
Year
2022 2021 2020 2019 2018 Intepretation & Narrations
RM'000 RM'000 RM'000 RM'000 RM'000
Asset Turnover Ratio (ATR) Sales 3,764,279 2,808,500 2,539,028 2,361,058 2,217,049
On 2018, 7E has the highest ATR and it depleted over the years before slightly
Total Asset 2,677,227 2,262,739 2,036,849 1,422,019 749,367
increased on 2022. Purchasing new asset may not increased their efficiency or
ATR 141% 124% 125% 166% 296%
ability to generate more income.

Inventory Day Ratio (IDR) Inventories 453,054 384,061 288,947 231,330 224,682
The IDR for 7E are fluctuated for the past 5 years. However, their performance on
Cost of Goods Sold 2,710,378 2,049,503 1,817,141 1,620,671 1,518,432
IDR seems not very good as the average is on between 30 and 60 while the
IDR 61 68 58 52 54
company need more than 60 days to sales their inventories for the past two years.

Receivable Day Ratio (RDR) Receivable Acct 220,356 164,561 96,183 75,900 93,465
Over the past year 5 years, 7-Eleven Malaysia take 14 to 21 days to collect their
Sales 3,764,279 2,808,500 2,539,028 2,361,058 2,217,049
receivables. A low receivable day means a company are efficiently able to collect
RDR 21 21 14 12 15
payments, which can influnce its cash flow and growth

Payable Day Ratio (PDR) Payable Acct 879,702 652,024 584,979 532,708 452,849 Based on the calculations, 7E takes on average 115 o 120 days in past 5 years to
Purchase 2,710,378 2,049,503 1,817,141 1,620,671 1,518,432 pay to their suppliers. It will benefit them as they can provide cash for short-term
PDR 118 116 118 120 109 investments and improve working capital. However, it may also damage supplier
relationships and lead to missed discounts or penalties.

Total Working Capital Day Ratio Inventory Day Ratio (IDR) 61 68 58 52 54

Based on the calculation, Total Working Capital Day Ratio for 7E shows low
Receivable Day Ratio (RDR) 21 21 14 12 15 number of days working capital indicates that a company is quickly converting its
- Payable Day Ratio (PDR) (118) (116) (118) (120) (109) working capital into sales. A decreasing number of days working capital due to
TWCDR (36) (26) (46) (56) (39) increase in sales for past 5 years.

Capital Structure Ratio

Year
2022 2021 2020 2019 2018 Intepretation & Narrations
RM'000 RM'000 RM'000 RM'000 RM'000
Gearing Ratio (GR) Debt 2,446,986 2,080,696 1,875,628 1,319,908 656,889
Total Capital Employed 2,677,227 2,262,739 2,036,849 1,422,019 749,367
GR 91.40% 91.95% 92.08% 92.82% 87.66%
A gearing ratio above 50% and about 90% over the years and its means 7E relies
Extra Info: Total Capital Employed Debt 2,446,986 2,080,696 1,875,628 1,319,908 656,889
heavily on debt, making it riskier during economic downturns or interest rate hikes.
Total Equity 230,241 182,043 161,221 102,111 92,478
Total Capital Employed 2,677,227 2,262,739 2,036,849 1,422,019 749,367
Debt to Equity Ratio (D/E) Debt 2,446,986 2,080,696 1,875,628 1,319,908 656,889
Over the pas 5 years, 7E relies too much on the debt. High debt makes a company
Total Equity 230,241 182,043 161,221 102,111 92,478
riskier. They should look further on how to reduce the debt and increase the
D/E 1062.79% 1142.97% 1163.39% 1292.62% 710.32%
equity to reduce the gap in between to make the company more healthier.