Please help answer all question 1

QUESTION 1

1. Distinguish between investment decision and financing decision.(4 marks)
2. The statement of financial position and statement of profit and loss of Golden Venture Berhad for 2020 are given below:

Golden Venture Bhd

Statement of Financial Position as at 30 June 2020

	RM
Assets:
Cash	30,000
Marketable securities	50,000
Accounts receivable	350,000
Inventory	370,000
Total Current Assets	800,000
Net plant and equipment	800,000
Net assets	1,600,000
Liabilities and Stockholders Equity
Accounts payable	50,000
Accruals	250,000
Total current liabilities	300,000
Long-term liabilities	300,000
Total liabilities	600,000
Common Stock(RM1 per share)	400,000
Retained earnings	600,000
Total liabilities and stockholders equity	1,600,000

Golden Venture Bhd

Statement of Profit or Loss and Other Comprehensive Income for the year ended 30 June 2020

	RM
Sales(all on credit)	4,000,000
Costs of goods sold	(3,000,000)
Gross profit	1,000,000
Selling and administrative expenses	(450,000)
Operating profit	550,000
Interest expense	(50,000)
Extraordinary loss	( 200,000)
Net income before taxes	300,000
Taxes (33%)	(100,000)
Net Income	200,000

Additional information:

	Industry Averages
Debt ratio	33%
Quick ratio	1.0 times
Return on assets	10%
Return on equity	15%
Net profit margin	6.7%
Total assets turnover	1.5 x
Inventory turnover ratio	7.0 x
Average collection period	36 days
Times interest earned	7 times
Earnings per share	RM0.30

Required:

1. Calculate the following:
   1. Debt ratio
   2. Quick ratio
   3. Return on equity
   4. Net profit margin
   5. Total assets turnover
   6. Average collection period
2. Comment on the firms liquidity asset management, leverage position and profitability. (6marks)
3. Give TWO (2) suggestions on how to improve debtors collection period. (2marks)