Balance Sheet $($RM millions$)$ as at December $31,2022$ and $2023$

$2022)2023$

Assets $($RM in mil$)($RM in mil$)$

Cash $911$

Accounts receivable $107139$

Inventory $198291$

Net fixed assets $550625$

Total Assets $8641066$

Liabilities & Equities

Accounts payable $88101$

Long$-$term debt $353488$

Common equity $423477$

Total liabilities and equity $8641066$

Energy$-$X

Income Statement $($RM million$)$ as at December $31,2022$ and $2023$

$20222023$

$($RM in mil$)($RM in mil$)$

Sales $11001250$

COGS $792875$

Gross profit $308375$

Operating expenses $176212$

Operating profit $132163$

Interest expense $5273$

Taxes $3236$

Net profit $4854$

Industry Averages

Current ratio $2\mathrm{.}5$ times

Day sales outstanding $33$ days

Inventory turnover $5$ times

Debt ratio $50\%$

Net profit margin $7\%$

Required:

a$.$ Compute the ratios $($according to the listed ratios as above$)$ for $2022$ and $2023.$ Analyse the ratios as the above between these $2$ years.

b$.$ From $($a$),$ analyse the ratios as the above between $2023$ and the industry.

c$.$ Comment the performance of the firm in terms of liquidity, efficiency, debt and profitability of the firm as a whole.

d$.$ Give THREE $(3)$ suggestions on how to improve on the profitability.

Answer rating: 100% (QA)

a Ratios for 2022 and 2023 1 Current Ratio 2022 Current ratio Current assets Current liabilities 911 1071 1982 8810 0403 2023 Current ratio Current as... View the full answer