QL. However, it need to Wawasan Berhad has decided to issue new shares. determine the possibilities...

 

Transcribed Image Text:

QL. However, it need to Wawasan Berhad has decided to issue new shares. determine the possibilities of it being accepted by its current shareholders and potential investors. Give your opinion on the firm's ability to sell off these shares based on the information of the balance sheet and income statement of Wawasan Berhad covering the last two years, along with the industry average, are shown below. What actions should Wawasan Berhad take to improve the relevant ratios, if needed? (Reminder: Compute only the necessary ratios and use 365 days where applicable). Statement of Financial Position Assets Cash Account Receivables Inventories Total Current Assets Less: Accumulated Depreciation 2017 (RM) 2018 (RM) 52 000 402 000 836 000 1 290 000 57 600 351 200 715 200 1124 000 527 000 166 200 360 800 1.650 800 491.000 146 200 344 800 1.468 800 Gross Fixed Assets Net Fixed Assets Total Assets Liabilities and Equities Accounts Payables 175 200 145 600 Notes Payables 225 000 200 000 Accruals 140 000 136 000 Total Current Liabilities 540 200 481 600 Long-term Debt 424 612 323-432 Common Stock 460 000 Retained Earnings Total Equity Total Liabilities and Equity 225 988 685 988 1 650 800 460 000 203 768 663.768 1468 800 Income Statement Sales Cost of Goods Sold Gross Profit Other Expenses Depreciation Operating Profit (EBIT) Interest Expense Earnings Before Tax (EBT) Taxes (40%) Net Income Other data December 31" stock price Number of shares Dividend per share Lease payment Industry Average data for 2018 Ratio Current Ratio Acid Test / Quick Ratio Average Collection Period Average Payment Period Industry 2.15 x 2017 (RM) 3 850 000 3.250.000 600 000 430 300 20 000 149 700 76 000 73 700 29480 44220 2018 (RM) 3432 000 2.864.000 568 000 340 000 18.900 209 100 62 500 146 600 58 640 87 960 2018 RM8.50 2017 RM6.00 100 000 RM0.27 RM40 000 RM40 000 Ratio 100 000 RMO 1.75 x Total Debt-Asset Ratio Long-term Debt-Equity Capital Gearing Ratio Times Interest Earned Ratio 24.5 days 15.23 days Industry 49.25% 36.48% 30.62% 2.5 x (TIE) Inventory Turnover Inventory Days 6.85 x Gross Profit Margin 15.73% 52.45 Operating Profit Margin 12.11% days Cash Conversion Cycle 61.72 Net Profit Margin 3.51% days Fixed Assets Turnover 10.7 x Return on Assets (ROA) 9.16% Total Assets Turnover 3.21 x Return on Equity (ROE) 18.22% Price per Earning (P/E) Ratio 14.2 x Market/Book Ratio 1.4 x QL. However, it need to Wawasan Berhad has decided to issue new shares. determine the possibilities of it being accepted by its current shareholders and potential investors. Give your opinion on the firm's ability to sell off these shares based on the information of the balance sheet and income statement of Wawasan Berhad covering the last two years, along with the industry average, are shown below. What actions should Wawasan Berhad take to improve the relevant ratios, if needed? (Reminder: Compute only the necessary ratios and use 365 days where applicable). Statement of Financial Position Assets Cash Account Receivables Inventories Total Current Assets Less: Accumulated Depreciation 2017 (RM) 2018 (RM) 52 000 402 000 836 000 1 290 000 57 600 351 200 715 200 1124 000 527 000 166 200 360 800 1.650 800 491.000 146 200 344 800 1.468 800 Gross Fixed Assets Net Fixed Assets Total Assets Liabilities and Equities Accounts Payables 175 200 145 600 Notes Payables 225 000 200 000 Accruals 140 000 136 000 Total Current Liabilities 540 200 481 600 Long-term Debt 424 612 323-432 Common Stock 460 000 Retained Earnings Total Equity Total Liabilities and Equity 225 988 685 988 1 650 800 460 000 203 768 663.768 1468 800 Income Statement Sales Cost of Goods Sold Gross Profit Other Expenses Depreciation Operating Profit (EBIT) Interest Expense Earnings Before Tax (EBT) Taxes (40%) Net Income Other data December 31" stock price Number of shares Dividend per share Lease payment Industry Average data for 2018 Ratio Current Ratio Acid Test / Quick Ratio Average Collection Period Average Payment Period Industry 2.15 x 2017 (RM) 3 850 000 3.250.000 600 000 430 300 20 000 149 700 76 000 73 700 29480 44220 2018 (RM) 3432 000 2.864.000 568 000 340 000 18.900 209 100 62 500 146 600 58 640 87 960 2018 RM8.50 2017 RM6.00 100 000 RM0.27 RM40 000 RM40 000 Ratio 100 000 RMO 1.75 x Total Debt-Asset Ratio Long-term Debt-Equity Capital Gearing Ratio Times Interest Earned Ratio 24.5 days 15.23 days Industry 49.25% 36.48% 30.62% 2.5 x (TIE) Inventory Turnover Inventory Days 6.85 x Gross Profit Margin 15.73% 52.45 Operating Profit Margin 12.11% days Cash Conversion Cycle 61.72 Net Profit Margin 3.51% days Fixed Assets Turnover 10.7 x Return on Assets (ROA) 9.16% Total Assets Turnover 3.21 x Return on Equity (ROE) 18.22% Price per Earning (P/E) Ratio 14.2 x Market/Book Ratio 1.4 x

Answer rating: 100% (QA)

Based on the financial information provided here is my analysis of Wawasan Berhads ability to sell n... View the full answer