6.4.

1 Analysis

YEAR 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

RATIO 0.17 0.12 0.09 0.10 0.14 0.08 0.10 0.16 0.11 0.11

RETURN ON ASSET (ROA)

0.18

0.16

0.14

0.12

0.1

0.08

0.06

0.04

0.02

0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

The trend for Return on Asset of KSL Holdings Berhad clearly shows us on the graph of ROA above.
From the year 2007, the graph was slightly decrease from 0.17% to 0.12% in 2008 an it remains
decrease in 2009 by 0.09%. In year 2010, the graph was slightly increased to 0.10% and remains
increase in 2011 by 0.14%. Moreover, the graph was slightly decreased again to 0.08% in 2012 and
increased again to 0.10% in 2013. In 2014, the graph was slightly increase to 0.16%. After that, the
ROA of the company is decreased again to 0.11% in 2015 and 2016. Besides that, from the graph above
shows that Year 2007 takes the highest ratio between ten years which is achieving 0.17%. While, in
year 2012 takes the lowest ratio which is only 0.08%. The increasing of graph shows us the productivity
of the company was in good condition.

6.4.2 Problems

Year 2011 to year 2012 the ratio was rapidly decreased from 0.14% to 0.08% among ten years, it
shows that the decreasing of profit or sales, and decreasing of total asset. The decrease in ROA ratio
means that the company is generated less profit because of ineffective use of asset and it will cause
the loss of confidence of investor towards this company. As a result, the company will lose many
common shareholders and next the company will in difficult condition to find a proper financing to
improve their company. In ten years, the ratio show positive, it is because the net profit in the year is
positive.

In this ratio also we can see that the Return on Asset of this company for ten years is stable but
the ratio is low throughout the year because not more than one. This is because the lower the ROA,
the bad the management in using its assets or resources to generate more income. The lowest ratio of
ROA in this company is 0.08% in the year 2012. The other reason why the net income generated by the
company is lower because of poor collection of account receivable and the firm use a large number of
debts.

6.4.3 Solutions

To improve return on assets ratio, the company can increase the net income. While it may not be
simple to just increase profits, there are a number of strategies that can be employed to increase net
income. However, these methods are not without risk, and may backfire on a company if not
implemented properly. Others, the company also can try increasing production. However, the demand
may not be there to meet the company increased output, resulting in unsold inventory. On the other
side, the company can reduce expenses and therefore increase net income by sourcing cheaper
production materials. Just make sure that the quality of your product still holds up with the cheaper
materials.

Next, manage inventory more effectively. Inventory is included in total assets. Excess inventory in
particular can over-inflate a company's total asset value. To keep total assets as low as possible, work
to eliminate excess inventory by matching production as closely to demand as possible. This can also
be achieved through more efficient inventory management and tracking techniques or systems. Plus,
eliminate unnecessary assets. Many companies hold assets that are not actively or efficiently
contributing to their business operations. Look through the company's assets to see if there are any
unnecessary holdings inflating the company's total assets. In addition, some assets can be leased or
rented, rather than purchased, to reduce total assets. Finally, you can reduce expenses by moving to a
cheaper area, firing employees, or downsizing.