EXERCISE 6: FINANCIAL STATEMENT ANALYSIS Untung Besar Sdn Bhd has been in operation since 1998. To ensure its competitiveness with other firms within the same industry, the CEO request constant review of company's financial performance. One of the firm review approaches is to benchmark the firm performance with relative to overall industry achievement. Below is the comparative active income statement and balance sheet of the company. Untung Besar Sdn Bhd Comparative Income Statements For the year ended December 31, 2007 and 2008 2008 RM 2007 RM Sales revenue Cost of goods sold Gross profit Administrative expenses Selling expenses Net income 3,143,980 1.960,700 1.183,280 510,300 230, 130 442,850 2,316,000 1,505,400 810,600 310,000 180, 145 320,455 2007 RM Untung Besar Sdn Bhd Balance Sheet as at December 31, 2008 2008 RM Current Assets Inventory 110,230 Cash 83,650 Receivable accounts 120, 100 Total current assets 313,980 Total Fixed assets 1,130,000 Total assets 1,443,980 130,300 75,285 144, 120 349,705 1,210,450 1,560, 155 Current liabilities Payable accounts Tax payable Total current liabilities Long term loan Owners' equity Total liabilities and owners' equity 120,400 87,000 207,400 320,000 916,580 1,443,980 126,230 78,300 204,530 361,600 956,705 1,522,835 Instructions: a) Prepare vertical analysis on income statement of 2007 and 2008 for Untung Besar Sdn Bhd. b) Prepare horizontal analysis on all balance sheet items for Untung Besar Sdn Bhd