Decision Usefulness of Accounting Information

DECISION USEFULNESS OF ACCOUNTING INFORMATION
CIMB Group Holdings Berhad
Maxis Berhad Group of Companies

Executive Summary
Financial reports of the company are considered to show a primary window of the financial
performance and financial position of a company to the stakeholders. The stakeholders of the
company include shareholders, investors, government, management, financial institutions,
etc. Also, the presentable financial reports of a company help to maintain a healthy position
in the capital markets and attract investments from around the world. To attain a link with the
stakeholders, it is imperative that the company must have a strong level of disclosure. It helps
in creating a balanced link with the stakeholders and even help them in assessing the
companies.
The discussion will be done on the usefulness of the accounting information contained in the
financial reports of the following companies:
CIMB Group Holdings Berhad
Maxis Berhad Group of Companies
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Contents
Introduction...........................................................................................................................................3
 Different stakeholders have different interest in the workings of the company:..........................3
 Shareholders..................................................................................................................................4
 Managers.......................................................................................................................................4
 Government..................................................................................................................................5
CIMB Group Holdings Berhad................................................................................................................6
 Shareholders..................................................................................................................................6
 Managers.......................................................................................................................................7
 Government..................................................................................................................................7
Conclusion.............................................................................................................................................9
References...........................................................................................................................................10
Introduction
 Maxis Berhad Group of Companies
Maxis Berhad is a communication service provider company which has its headquarter based
in Kuala Lumpur. Maxis Berhad Group is a holding company which operates Maxis
Company under it. It provides varied services such as communication products, various
applications, value-added products for consumers including small, medium and large scale
enterprises.
 Different stakeholders have different interest in the workings of
the company:
 Shareholders
Usefulness of accounting information- Shareholders need financial reports of a company to
make subtle and informed decisions about the continuance of their investments in the
company. It is vital to report every relevant matter in the report so as to address the related
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parties. This is done by the shareholders by assessing the risk and return on their funds
invested in the company. Shareholders use various measurement tools to assess their money
value invested in the company which includes a comparison of dividends, earnings, etc from
previous years and comparison of various ratios like profitability ratios, liquidity ratios, debt
ratios with previous years (CIMB, 2012). The shareholders are mostly concerned with the
business performance, dividend payouts and company’s strategies and vision (Davies &,
Crawford 2012).
Prior to the year 2018, the group services were limited to the fixed broadband market. The
year 2018 was a turning point for Maxis as it started offering more accessible and affordable
fiber broadband service in more businesses and households. From the Financial Statements
presented in the Annual report, we can see that although the revenues are substantial enough
to meet out the expenses and reap profits for the year ended 2018 if we compare these
revenues and net profits with the previous year, it shows a downfall. For example, other
measurement tools EBITDA Margin percentage was 45.7% in 2017 which has reduced to
41.3% in 2018.PBT and PAT have also declined from 30.5% & 23.1% in year 2017 to 25.8%
& 19.4% in 2018 respectively. Moreover, Earnings per Share have also decreased in
comparison to the previous year. This can concern the shareholders regarding their further
investments if the company does not give justifications for the decline. The positive point for
shareholders is that despite the downfall in profit factor also, the company has provided for
the same dividend as was provided in the previous year (CIMB, 2012). But overall the return
on investments has reduced from previous years as can be seen from the below snapshot from
the Annual Report:
The shareholders are also concerned with the vision and strategies of the company. This has
also been taken care by the company by presenting their visions and strategies in its Annual
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