Berjaya Sports Toto Berhad

               Based on those ratios we calculate above, we found that gross profit margin of Berjaya Sports Toto Berhad is 26.36%, which is higher than Magnum Berhad 18.46%.  If other things being equal, the higher the gross profit the better. Gross Profit of Berjaya Sport Toto is obvious higher than Magnum by RM 637,024,000. In such case, we found that Berjaya Sports Toto has cooperated with International Lottery & Totalizator System Inc to improve the online lottery system. With the updated online lottery system, they can make the customer service and quality of product better. This is the main reason which causes the gross profit of Berjaya Sport Toto higher than magnum. Besides, the net profit margin of Berjaya Sports Toto, 11.12% also higher than Magnum Berhad, 9.13%. It is RM 130,347,000 different between these two companies. Net profit margin is the measurement of sale volume after adjustment for all other incomes and expenses. Therefore, Berjaya Sports Toto is managed their cost efficiently so that their expenses incurred is lesser than Magnum Berhad.

Next, the total assets turnover of Berjaya Sports Toto which is 2.35 times is higher than Magnum Berhad which is 0.8 times. This means that Berjaya Sports Toto is better in generating sales using their assets. They have expand their business international such as they have transfer of 100% equity interest in its wholly-owned subsidiary for a RM 6 billion to a business trust to be constituted and registered in Singapore to be known as Sports Toto Malaysia Trust(STM-Trust). High total assets turnover will lead to better sales. However, overly high sales will cause low liquidity.  This is because the company uses too much cash to purchase their inventories. As we all know, inventories is the least liquidity in current assets. While Magnum Berhad has lower sales due to they don’t involve in any investment projects which can generate higher sales. Moreover, inventory turnover of magnum which is 1,685.57 times is much higher than Berjaya Sports Toto which is 158.30 times. In such case, Berjaya Sports Toto has low inventory turnover will cause the firm have too much inventories and take up costly warehouse space or higher risk of stock pilferage. On the other hand, Magnum Berhad has an overstate inventory turnover. A high inventory turnover implies strong sales. However, overstate inventory turnover also implies inefficiency buying which means Magnum Berhad buys too often in small quantities, therefore the buying price is higher. A high inventory turnover ratio can indicate better liquidity, but it can also indicate a shortage or inadequate inventory levels, which may lead to a loss in their business.