These will be elaborated in the following sections. To illustrate better the computations of fmancial ratios...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
These will be elaborated in the following sections. To illustrate better the computations of fmancial ratios and its interpretation, the financial statements if ABC Bhd is provide in TABLE 1.1. INCOME STATEMENT FOR THE YEAR ENDED 31ST DECEMBER 2020 TABLE 1.1 RM('000) RM('000) Revenue Cost of sales and direct expenses Gross profit Other operating income Distribution expenses Administrative expenses Other operating expenses Profit from operations Finance cost 3,394 (2.485) 909 (300) (240) (105) (645) 264 (71) Investing Income Fair value gain of equity investments Profit before tax Тах еxpense Profit after tax for year Retained profits brought forward Available for appropriation Dividends paid Retained profits carried forward 40 5 238 (70) 168 220 388 (45) 343 FINANCIAL POSITION AS AT 31ST DECEMBER 2020 RM('000) RM('000) Non- Current Assets Property, plant and equipment Investment property Investment in equity instruments Investment in debt instruments 2,140 1,590 350 250 4.330 Current assets Inventories Trade receivables Other receivables Deposits and prepayments Cash at bank and in hand 440 443 90 40 188 1.201 5.531 Total Assets Equity Share capital Share premium Retained profits Total equity 600 50 343 993 Non-current liabilities Bank borrowings Financial liabilities Deferred tax liabilities Total non-current liabilities 2,565 879 179 3.623 Current liabilities Trade payables Accruals and 325 other 115 payables Bank borrowings Current tax liabilities Total Current liabilities Total liabilities Total Equity and Liabilities 355 120 915 4,538 5,531 REQUIRED:: Calculate the following Ratios: a) Gross Profit Margin b) Net Profit Margin Current Ratio Quick Acid Ratio Inventory Turnover Ratio (Days) Accounts Receivable Tumover Ratio Accounts Payable Turnover Ratio Debt ratio h) 1) Retum on Assets b) Explain the limitation of ratio in a business These will be elaborated in the following sections. To illustrate better the computations of fmancial ratios and its interpretation, the financial statements if ABC Bhd is provide in TABLE 1.1. INCOME STATEMENT FOR THE YEAR ENDED 31ST DECEMBER 2020 TABLE 1.1 RM('000) RM('000) Revenue Cost of sales and direct expenses Gross profit Other operating income Distribution expenses Administrative expenses Other operating expenses Profit from operations Finance cost 3,394 (2.485) 909 (300) (240) (105) (645) 264 (71) Investing Income Fair value gain of equity investments Profit before tax Тах еxpense Profit after tax for year Retained profits brought forward Available for appropriation Dividends paid Retained profits carried forward 40 5 238 (70) 168 220 388 (45) 343 FINANCIAL POSITION AS AT 31ST DECEMBER 2020 RM('000) RM('000) Non- Current Assets Property, plant and equipment Investment property Investment in equity instruments Investment in debt instruments 2,140 1,590 350 250 4.330 Current assets Inventories Trade receivables Other receivables Deposits and prepayments Cash at bank and in hand 440 443 90 40 188 1.201 5.531 Total Assets Equity Share capital Share premium Retained profits Total equity 600 50 343 993 Non-current liabilities Bank borrowings Financial liabilities Deferred tax liabilities Total non-current liabilities 2,565 879 179 3.623 Current liabilities Trade payables Accruals and 325 other 115 payables Bank borrowings Current tax liabilities Total Current liabilities Total liabilities Total Equity and Liabilities 355 120 915 4,538 5,531 REQUIRED:: Calculate the following Ratios: a) Gross Profit Margin b) Net Profit Margin Current Ratio Quick Acid Ratio Inventory Turnover Ratio (Days) Accounts Receivable Tumover Ratio Accounts Payable Turnover Ratio Debt ratio h) 1) Retum on Assets b) Explain the limitation of ratio in a business
Expert Answer:
Answer rating: 100% (QA)
a GROSS PROFIT MARGIN REVENUE COGS REVENUE COGS COST OF GOODS SOLD 2 485 REVENUE 3394 GROSS PROFIT M... View the full answer
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1285190907
8th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Posted Date:
Students also viewed these accounting questions
-
In its income statement for the year ended December 31, 2010, Pele Company reported the following condensed data Instructions(a) Prepare a multiple-step income statement.(b) Prepare a single-step...
-
In its income statement for the year ended December 31, 2010, Maris Company reported the following condensed data. Instructions (a) Prepare a multiple-step income statement. (b) Calculate the profit...
-
In its income statement for the year ended December 31, 2014, Michael Company reported the following condensed data. Instructions (a) Prepare a multiple-step income statement. (b) Prepare a...
-
For each equation: a) Tell whether the equation describes a parabola, an ellipse, or a hyperbola. b) State whether the directrix is vertical or horizontal and give its location in relation to the...
-
Police cars, ambulances, and other emergency vehicles are required to carry road flares. One of the most important features of flares is their burning times. To help decide which of four brands on...
-
A jacketed, agitated reactor consists of a vertical cylinder 1.5 m diameter, with a hemispherical base and a flat, flanged, top. The jacket is fitted to the cylindrical section only and extends to a...
-
A brand-new sleeve bearing has been installed in a machine. The vibration levels on restart of the machine are not within tolerance, and the predominant peaks are at exactly one-half the operating...
-
From the following information, develop an AON project network. Complete the forward and backward pass, compute activity slack, and identify the critical path. How many days will the projecttake? ID...
-
How would you conduct a diagnosis of the situation at HealthCo? Provide examples of the types of data you would collect, how you would collect it, and how you would use it ?
-
Consider the EER diagram for Pine Valley Furniture shown in Figure 3-12. Figure 5-9 looks at a portion of that EER diagram. Let's make a few assumptions about the average usage of the system: There...
-
To what potential should you charge a 1.0 uF capacitor to store 4.0 J of energy? Express your answer in volts. 0 ? V = V
-
Who is responsible to select and void accounts payable that are deemed not payable?
-
The Student Registration System (SRS) allows students to register for course offerings. This process entails a student requesting enrollment in a particular class. Enrollment in a class is contingent...
-
What term refers to the process of analyzing possible positive and negative effects of a particular regulation or project to help make decisions?
-
To develop a CDMA base station for your company, a project requires some new test equipment and a new D++ complier. The finance department explains that this is a capital purchase to be depreciated...
-
Which hospital departments are involved in checking that appropriate payments have been received?
-
A county golf course is reported in an enterprise fund. At the beginning of the year, the fund reports net investment in capital assets of $18,000,000. During the year, the fund acquires equipment of...
-
In the synthesis of the keto acid just given, the dicarboxylic acid decarboxylates in a specific way; it gives Explain. HO rather than HO
-
a. Apply Porter's five forces framework to the specialty coffee retail industry. b. How would you characterize the strategy of Starbucks? How does Starbucks create value for its customers? What...
-
U.S. GAAP requires firms to account for equity investments in which ownership is between 20% and 50% using the equity method. Ace Corporation owns 35% of Spear Corporation during 2014. Spear...
-
The chapter discusses eight items that occur infrequently but that can have a large impact on financial statements. What criteria should an analyst employ to assess whether to include or eliminate...
-
The trial balance of Mumbai Co. at 31 December was as follows: The following information is applicable. (a) Inventory on 31 December is 850,000. (b) The cumulative allowance for doubtful debts is to...
-
The trial balance of Penang Co. on 31 July 20X7 was as follows. The following additional information is available: 1. Inventory at 31 July 20X6 is valued at 1,361,000. 2. Depreciation for the year is...
-
The trial balance of Shanghai Co. on 31 March 20X7 is given below. The following information is also relevant: 1. Closing inventory is valued at 133m. 2. Electricity accrued is estimated to be 5m. 3....
Study smarter with the SolutionInn App