Danish Delight Berhad has been in operation since 2018. To ensure its competitiveness with other companies...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Danish Delight Berhad has been in operation since 2018. To ensure its competitiveness with other companies within the same industry, the CEO request constant review of company's financial performance. One of the company review approaches is to benchmark the company performance relative to overall industry achievement. The Statement of Profit or Loss and Other Comprehensive Income, Statement of Financial Position and selected ratios of industry average are as follows; Danish Delight Berhad Statement of Profit or Loss and Other Comprehensive Income For the year ended 31 December 2018 Sales revenue Cost of goods sold Gross profit Administrative expenses Selling expenses Net income Assets: Inventory Cash Receivable accounts Total current assets Total non-current assets Total assets Danish Delight Berhad Statement of Financial Position As at 31 December 2018 Liabilities and owners' equity: Payable accounts Tax payable Total current liabilities Long term loan Owners' equity Total liabilities and owners' equity RM 3,143,980 1,960,700 1,183,280 510,300 230,130 442,850 RM 110,230 83,650 120,100 313,980 1,130,000 1,443,980 120,400 87,000 207,400 320,000 916,580 1,443,980 Industry average ratio: Current ratio Quick ratio Gross profit margin Asset turnover Debt ratio Equity ratio Additional information: Total assets as at 31 December 2017 is RM1,500,000. REQUIRED: (a) Prepare vertical analysis on Statement of Profit or Loss and Other Comprehensive Income of 2018 for Danish Delight Berhad. (3 Marks) (b) Calculate the following ratios for the year 2018 and provide a brief analysis of Danish Delight Berhad's financial performance relative to the industrial average (formula is provided). (i) Current ratio (ii) Quick ratio (iii) Gross profit margin (iv) Asset turnover 1.7 1.2 20% 2 times 34% 0.43 (v) Debt ratio (vi) Equity ratio Formula: Current Assets Current Liabilities Current Assets - Inventories Current Liabilities Gross Profit Net Sales Net Sales Average Total Assets Total Liabilities Total Assets Total Owner's Equity Total Asset Danish Delight Berhad has been in operation since 2018. To ensure its competitiveness with other companies within the same industry, the CEO request constant review of company's financial performance. One of the company review approaches is to benchmark the company performance relative to overall industry achievement. The Statement of Profit or Loss and Other Comprehensive Income, Statement of Financial Position and selected ratios of industry average are as follows; Danish Delight Berhad Statement of Profit or Loss and Other Comprehensive Income For the year ended 31 December 2018 Sales revenue Cost of goods sold Gross profit Administrative expenses Selling expenses Net income Assets: Inventory Cash Receivable accounts Total current assets Total non-current assets Total assets Danish Delight Berhad Statement of Financial Position As at 31 December 2018 Liabilities and owners' equity: Payable accounts Tax payable Total current liabilities Long term loan Owners' equity Total liabilities and owners' equity RM 3,143,980 1,960,700 1,183,280 510,300 230,130 442,850 RM 110,230 83,650 120,100 313,980 1,130,000 1,443,980 120,400 87,000 207,400 320,000 916,580 1,443,980 Industry average ratio: Current ratio Quick ratio Gross profit margin Asset turnover Debt ratio Equity ratio Additional information: Total assets as at 31 December 2017 is RM1,500,000. REQUIRED: (a) Prepare vertical analysis on Statement of Profit or Loss and Other Comprehensive Income of 2018 for Danish Delight Berhad. (3 Marks) (b) Calculate the following ratios for the year 2018 and provide a brief analysis of Danish Delight Berhad's financial performance relative to the industrial average (formula is provided). (i) Current ratio (ii) Quick ratio (iii) Gross profit margin (iv) Asset turnover 1.7 1.2 20% 2 times 34% 0.43 (v) Debt ratio (vi) Equity ratio Formula: Current Assets Current Liabilities Current Assets - Inventories Current Liabilities Gross Profit Net Sales Net Sales Average Total Assets Total Liabilities Total Assets Total Owner's Equity Total Asset
Expert Answer:
Answer rating: 100% (QA)
Question 1 Vertical analysis of the statement of profit or loss and other comprehensive income is sh... View the full answer
Related Book For
Auditing a risk based approach to conducting a quality audit
ISBN: 978-1133939153
9th edition
Authors: Karla Johnstone, Audrey Gramling, Larry Rittenberg
Posted Date:
Students also viewed these accounting questions
-
The summarized statements for the year ended 31 December 2007 for Mat, Rug and P entities are as follows: Statements of comprehensive income for the year ended 31 December 2007 The following...
-
The records of HKL Company provided the following information for the year ended 31 December 20X8: Additional information: a. Sold equipment for cash (cost, $ 15,000; accumulated depreciation, $...
-
XYZ Ltd. has an outstanding loan of $100,000 with an interest rate of 6% per annum. The loan is payable in 5 equal annual installments, with the first payment due at the end of the first year....
-
A circular transistor of 10-mm diameter is cooled by impingement of an air jet exiting a 2-mm-diameter round nozzle with a velocity of 20 m/s and a temperature of 15C. The jet exit and the exposed...
-
A straight, vertical wire carries a current of 1.20 A downward in a region between the poles of a large superconducting electromagnet, where the magnetic field has magnitude B = 0.588 T and is...
-
A 1-kW, 85-V, permanent-magnet dc motor is to be driven from a full-wave, phase-controlled bridge such as is shown in Figure. When operating at its rated voltage, the dc-motor has a no load speed of...
-
What are the three elements necessary for determining whether a statement is hearsay?
-
Bennet National Banks credit-card department issues a special credit card that permits credit-card holders to withdraw funds from the banks automated teller machines (ATMs) at any time of the day or...
-
The following information about the work-in-process inventory pertains to the Remington Plant for the month of July (all materials are added at the beginning of the process): Materials Conversion...
-
assume the underlying asset is a stock worth $55 today. Also assume the following spot prices will be realized in the future S 1 =$62 and S 2 =47. Also assume that C(50,1)=$7 and P(50,2)=$3. r=15%....
-
Firms can manager earnings to improve the impression that the financial statements leave on users but sometimes they manager earnings to make the firm look worse each year. Why and how would they do...
-
Suppose you have the following class in a module named animal.insect.impl. Which two most likely go in the module-info of the service locator? (Choose two.) A. requires animal.insect.api.bugs; B....
-
Which statement about the following method is correct? Assume the directory coffee exists and is able to be read. A. It does not compile. B. It compiles but does not print anything at runtime. C. It...
-
The following code snippet results in an exception at runtime. Which of the following is the most likely type of exception to be thrown? A. AtomicMoveNotSupportedException B....
-
Which of the following is most likely to be caused by a race condition? A. A thread perpetually denied access to a resource B. A program hanging indefinitely C. An int variable incorrectly reporting...
-
Which are true of a JAR file that has only one module-info.class file, placed in the META-INF directory? (Choose two.) A. It is an automatic module if on the classpath. B. It is an automatic module...
-
Compare and contrast corporate image advertising and corporate issue advertising, and provide an example of each.
-
Explain the term global capital markets. This chapter primarily discusses global equity markets. What other types of financial instruments are traded in these markets? How important are global...
-
Describe the following requirements that help to achieve audit quality and thereby help to minimize the exposure of external auditors to lawsuits: a. Maintaining auditor independence b. Participating...
-
Describe the purpose of a management letter, and distinguish it from a management representation letter. Refer to the Auditing in Practice feature, "An Example Management Letter to a College...
-
In March 2006, General Motors (GM) announced that it needed to restate its prior year's financial statements. Excerpts from the Wall Street Journal describing the restatements include the following: ...
-
If X is a binomial random variable with n trials and success probability p, the standard deviation of X is X = __________________ . In Exercises 57, fill in each blank with the appropriate word or...
-
Refer to Problem 5. Find the standard deviation of the number of pets. Problem 5 The following table presents a probability distribution for the number of pets each family has in a certain...
-
Following is the probability distribution for the age of a student at a certain public high school. a. Find the variance of the ages. b. Find the standard deviation of the ages. x 13 14 15 16 17 18...
Study smarter with the SolutionInn App