Reference no: EM132566794
QUESTION 1 - The following data are taken from the financial statements:
2019 2020
Sales RM3,600,000 RM4,000,000
Cost of goods sold 2,000,000 2,700,000
Average inventory 372,000 352,000
Inventory, end of year 372,000 347,000
Determine for each year:
i. the inventory turnover
ii. the number of days for sales in inventory
QUESTION 2 - The following information was taken from the financial statement of Fine Resources for 31 December of the current fiscal year:
Common stock, RM20 par value RM5,000,000
Preferred 10% stock, RM40 par 2,000,000
The net income was RM600,000, and the declared dividends on the common stock were RM125,000 for the current year.
The market price of the common stock is RM20 per share.
Required: Calculate the following ratios:
Earnings per share on common stock
Price-earnings ratio
Dividends per share
Dividend yield
QUESTION 3 - The condensed statement of financial position and statement of profit or loss and other comprehensive income of Kenangan Sdn Bhd appear as follows:
Kenanga Sdn Bhd Statement of Financial Position as at 31 December 2019 and 2018
2019 2018
Current Assets:
Cash 25,000 20,000
Accounts receivables 50,000 45,000
Other current assets 90,000 85,000
Non-Current Assets
Plant and machinery 400,000 370,000
Equipment 75,000 70,000
TOTAL ASSETS 640,000 590,000
Equity
Common stock, RM10 par 340,000 300,000
Retained earnings 145,000 125,000
Non-current Liability
Bank loan 80,000 85,000
Current Liability
Accounts payable 45,000 43,000
Other current liabilities 30,000 37,000
TOTAL EQUITY AND LIABILITIES 640,000 590,000
Kenanga Sdn Bhd Statement of Profit or Loss and Other Comprehensive Income for the Year Ended 31 December 2019 and 2018
2019 2018
Revenue
Sales 740,000 700,000
Sales return and allowance (40,000) (50,000)
Cost of goods sold (420,000) (400,000)
Gross profit 280,000 250,000
Expenses
Operating expenses (236,000) (218,000)
Net Profit 44,000 32,000
REQUIRED - Compute the following ratios for the year 2019:
Current ratio
Ratio of sales to assets
Profit margin
Compare and explain the ratios calculated above with the industry average as listed below:
Current ratio: 1.8
Ratio of sales to assets: 1.03
Profit margin: 8.2%
QUESTION 4 - The following is the Statement of Financial Position of AAA Sdn Bhd as at on 31March 2020:
ASSETS: RM RM
Liabilities 140,000
Plant and Machinery 350,000
Inventory 200,000
Debtors 100,000
Account receivables 10,000
Cash 40,000
TOTAL ASSETS: 840,000
OWNER'S EQUITY AND LIABILITIES:
Share capital 200,000
Net income 30,000
Reserves 40,000
12% Debentures 420,000
Creditors 100,000
Accounts payable 50,000
TOTAL OWNER'S EQUITY AND LIABILITIES: 840,000
REQUIRED - Calculate Current ratio and Quick ratio.