Financial Ratio Ranking: The Composite Method (Electronics Sector)

In previous article, the composite ranking method using financial ratios were discussed based on Plantation sector (Read more here).  This week, Electronics sector is selected for discussion.

It is very common for electronics companies listed on Bursa Malaysia to maintain high cash position and low debt level.  Thus, certain financial ratio such as D/E and interest coverage ratio may not be meaningful.  As such, few ratios are replaced to focus more on the operating efficiency and free cash flow generation.

Also, financial ratios are computed using financial statements.  Different companies may have different approaches to recognize their costs.  For instance, MPI cost of sales is very high but their Selling, General & Administration (SG&A) costs are low.  As such, MPI’s gross margin is relatively low compared to its peers but its operating profit margin is on-par with its peers.  Thus, Gross Margin is replaced with EBITDA Margin for this analysis.

Source: Dynaquest Sdn. Bhd. STOCKBASE platform.  See “Notes” at the end of this article for Copyrights details.

Disclaimer:  The above analysis does not imply any buy or sell recommendation.  The author disclaims all liabilities arising from any use of the information contained in this article.

Disclosure: The author may have interest in the stocks of the companies in this article.

Notes:  The data are the property of Dynaquest Sdn. Bhd.  It is subject to Intellectual Property Rights and T&C.  Do not reproduce without the consent from Dynaquest Sdn. Bhd.  (The author has signed a “Data Sharing Agreement” with Dynaquest Sdn. Bhd., based on a “Data Sharing Fee”, to use the data from Dynaquest Sdn. Bhd.’s STOCKBASE platform in this blog.  The content of this blog in no way represents the views or opinions of Dynaquest Sdn. Bhd.)