You have just been appointed as the financial manager of Energy-X Bhd. Your first task is to assess the efficiency and the leverage situation of the firm and how it affects the profitability of the firm. The financial records of the past two years had been compiled for the analysis as given below:

 

Required: 

a. Compute the ratios for 2019 and 2020. Analyse the ratios as the between these 2 years. 

b. Analyse the ratios as the above between 2020 and the industry.

 c. Comment the performance of the firm in terms of liquidity, efficiency, debt and profitability of the firm as a whole. 

d. Give THREE (3) suggestions on how to improve on the profitability.

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Assets Cash Energy-X Balance Sheet (RM millions) as at December 31, 2019 and 2020 2019 2020 Accounts receivable Inventory Net fixed assets Total Assets Liabilities & Equities Accounts payable Long-term debt Common equity Total liabilities and equity Sales COGS Gross profit Operating expenses Operating profit Interest expense Taxes Net profit Industry Averages Current ratio Day sales outstanding Inventory turnover Debt ratio Times interest earned Net profit margin Return on assets Return on equity 2.5 times 33 days 5 times 50% 2.5 times 9 7% 10% 16% 107 198 550 864 Energy-X Income Statement (RM million) as at December 31, 2019 and 2020 2019 2020 88 353 423 864 1100 792 308 176 132 52 32 11 139 48 291 625 1066 101 488 477 1066 1250 875 375 212 163 73 36 54 Assets Cash Energy-X Balance Sheet (RM millions) as at December 31, 2019 and 2020 2019 2020 Accounts receivable Inventory Net fixed assets Total Assets Liabilities & Equities Accounts payable Long-term debt Common equity Total liabilities and equity Sales COGS Gross profit Operating expenses Operating profit Interest expense Taxes Net profit Industry Averages Current ratio Day sales outstanding Inventory turnover Debt ratio Times interest earned Net profit margin Return on assets Return on equity 2.5 times 33 days 5 times 50% 2.5 times 9 7% 10% 16% 107 198 550 864 Energy-X Income Statement (RM million) as at December 31, 2019 and 2020 2019 2020 88 353 423 864 1100 792 308 176 132 52 32 11 139 48 291 625 1066 101 488 477 1066 1250 875 375 212 163 73 36 54