Are we doing fine? A case Of Malaysian Airline System Berhad

Amir, an independent financial consultant, just came out from a meeting with the major shareholders. In the meeting on 7th January 2013, the shareholders raised a concern relating to their investment in the Malaysian Airline System Berhad (MAS). After two business turnaround plans, they wondered whether it was worth to continue holding their investment in MAS because it seemed that the business turnaround plans worked only in the short rather than long run. Moreover, information from the 2006 to 2012 annual reports did not suggest a healthier performance of MAS. They did not understand if the losses were caused by operating, financial or both leverages. Furthermore, the profit and loss statements showed a downward trend which raised concern on the sustainability of MAS in the long run. Although MAS had its own team to look at this matter, the major shareholders would like to have an independent assessment by an individual not related to MAS. Hence, Amir was consulted to provide a report on the liquidity, leverage and profitability analysis, as well as the business turnaround plans of MAS from the period 2006 to 2012. The analysis must be presented in the next meeting, which is scheduled on 14th January, 2013.