The financial manager Katrina Sdn Bhd, a manufacturing firm, has decided to seek a line of credit
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Question:
Katrina Sdn Bhd | ||
Income Statement for the Year ended 31 December 2019 | ||
RM | RM | |
Sales (all credit) | 2,400,000 | |
Less : Cost of goods sold | 1,840,000 | |
Gross profits | 560,00 | |
Less : Operating expenses: | ||
General and administrative | 120,000 | |
Depreciation expense | 120,000 | 240,000 |
Operating profits | 320,000 | |
Less : Interest expense | 40,000 | |
Before-tax profits | 280,000 | |
Less : Taxes | 84,000 | |
After-tax profits | 196,000 |
Katrina Sdn Bhd | ||
Balance Sheet as at 31 December 2019 | ||
RM | RM | |
Cash | 56,000 | |
Marketable securities | 24,800 | |
Accounts receivable | 132,000 | |
Inventories | 336,000 | |
Total current assets | 548,800 | |
Net fixed assets | 1,080,000 | |
Total Assets | 1,628,800 | |
Accounts payable | 228,000 | |
Notes payable | 52,000 | |
Other current payable | 20,000 | |
Total current liabilities | 300,000 | |
Long -termdebt | 600,000 | |
Total L..s@RM0.50par | 500,000 | |
Retained earnings | 228,800 | |
Total liabilities and shareholders' equity | 1,628,800 |
The average industry rations are provided below to facilitate an analysis of the firm's loan request:
- Current ratio
- Quick ratio
- Inventory turnover ratio
- Average age of Inventory
- Average collection period
- Average Payment Period
- Total assets turnover
- Debt ratio
- Times interest earned
- Gross profit margin
- Operating profit margin
- Net Profit Margin
- Return on assets
- Return on equity
- Cash Conversion Cycle
Required:
Compute the above ratios for Katrina Sdn Bhd 2019.
Related Book For
Financial Management Principles and Applications
ISBN: 978-0134417219
13th edition
Authors: Sheridan Titman, Arthur J. Keown, John H. Martin
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