Please answer question b.

Compare and comment on the performance of the companies as indicated by the ratios you have calculated in part a.

Question 2 Two companies Samsong Sdn Bhd and Huaway Sdn Bhd trade in the same market. Their financial statements for the year ended 30 September 2019 are summarised below: Statements of Comprehensive Income for the year ended 30 September 2019: Samsong Huaway RM'000 RM'000 Revenue 284 405 (155) (251) Cost of sales Gross profit 129 154 Administrative (24) (37) (53) Distribution (35) Depreciation (9) (12) Interest on loan Nil (5) Profit before tax 61 47 Income tax expense (10) Profit for the year 51 43 8 Note: dividends paid during the year Statement of Financial Position as at 30 September 2019 Samsong Huaway RM'000 RM'000 RM'000 RM'000 Assets Non-current assets At cost 320 515 Less : Acc depreciation (75) (96) 245 419 Current assets Inventory 91 293 Trade receivables 46 75 Bank 64 15 Total assets 446 802 Equity and liabilities Equity shares of RM1 each 150 250 Retained earnings 108 177 258 427 Non-current liabilities 10% loan notes Nil 50 Current liabilities Trade payables 140 300 Government grants 48 25 Total equity and liabilities 446 802 Required: Calculate the following ratios for Samsong and Huaway: (State the formulae used for calculating the ratios.) i. Gross profit percentage ii. Net profit percentage Asset turnover ratio iv. Current ratio > Quick ratio (acid test ratio) vi. Receivables collection period (18 marks) b. Compare and comment on the performance of the companies as indicated by the ratios you have calculated in part a. (7 marks)