Identifying Warning Signs of a Business in Decline: A Case Study of Berjaya Land Berhad

Title: Berjaya Land Berhad: A Business in Decline?

In the world of business, there are certain trends that can serve as warning signs for a company in decline. Two key indicators are a declining return on capital employed (ROCE) and a shrinking base of capital employed. These trends suggest that the company is not generating returns for shareholders and its asset base is diminishing. This brings us to Berjaya Land Berhad (KLSE:BJLAND), a company that seems to be facing these challenges.

ROCE is a metric used to measure the return a company generates from the capital it employs in its business. In the case of Berjaya Land Berhad, the ROCE stands at 2.7%, which is lower than the industry average of 5.3%. This indicates that the company is not performing well in terms of generating returns for its shareholders.

Looking at the historical performance of Berjaya Land Berhad, it is evident that the returns on capital have been declining over the years. This, coupled with the stagnant capital employed, suggests that the company may be facing challenges in generating high returns due to increased competition or lower margins.

While the stock has delivered a 80% return to shareholders over the last five years, the fundamentals of the company do not seem strong. With these trends in mind, it may be wise for investors to exercise caution when considering investing in Berjaya Land Berhad.

In conclusion, Berjaya Land Berhad may not be the best investment option at the moment. It is important for investors to conduct thorough research and consider all factors before making any investment decisions.