Case 2. Inbox is in the business to sell PC & laptop of leading brands through its owned showroom worth 20 million, 25 million of inventory, investment 7 million, cash 10 mn, computer & office equipment worth 8 mn and total assets are worth 70 million on the balance sheet as on Dec 2019 It has 70% Capital (generated from own sources) and 30% financing from conventional banking liability). Total share issued at face value of Rs 10 are 4.9 million The company has 10% investment of its total assets in an Islamic mutual funds and however all the cash is invested in conventional bank. The gross revenue of the company is 50 million including the income from conventional bank investment of 2 million and from Islamic mutual of 5 million. The shares of Inbox are being traded @ Rs. 20/share (market value) whereas the face value of each share is Rs. 10 Your friend in Stock Exchange is asking you to buy its share as the company is about to announce dividends and has got unusually high profits. Evaluate the offer as per stocks screening criteria of KMI-30 index for investment. Show if the share is compliant or not on each criteria separately and as a whole , so your friend can take a decision.

Answer rating: 100% (QA)

The company is compliant on all the criteria except debt to equity ratio Therefore the share is not ... View the full answer