04. DecorHouse Berhad is a manufacturing company, has hired you analyse its financial performance. Below are the most recent financial statements of DecorHouse Berhad presented to you: This question paper consists of 4 questions on 7 printed pages. 6 BBAC1113 FINANCIAL ACCOUNTING 04. (Continued) DECORHOUSE BERHAD STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DECEMBER 2020 2020 RM Sales 7,570,000 Less: Cost of Sales (4,850,000) Gross Profit 2,720,000 Add: Other Income 261,000 Less: General, administrative and marketing expenses Less: Interest expense Net Profits Before Tax Less: Taxes Net Profit After Tax (1,531,000) (22.000) 1,428,000 (628,000) 800,000 DECORHOUSE BERHAD STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020 RM Assets Property, plant and equipment 1,066,000 Intangible assets 123,000 Cash 683.000 Trade receivable 1,490,000 Inventories 1,430,000 TOTAL ASSETS 4,792,000 Liabilities Bank borrowing Trade payables Other payables Accrued expenses Long term loan Long term borrowing 622,000 485.000 38,000 576,000 122,000 81,000 Shareholders' Equity Common stock (1,500,000 shares) Retained earnings TOTAL LIABILITIES AND EQUITY 1,500,000 1,368,000 4,792,000 Assuming 360 days in a year and share price of DecorHouse Berhad in 2020 is RM2.00. This question paper consists of 4 questions on 7 printed pages. Assuming 360 days in a year and share price of Decor House Berhad in 2020 is RM2.00 This question paper consists of 4 questions on 7 printed pages. 7 BBAC1113 FINANCIAL ACCOUNTING Q4. (Continued) (a) You are required to compute the following ratio for the year 2020. (1) Gross Profit Margin (ii) Operating Profit Margin (iii) Current Ratio (iv) Acid Test Ratio (v) Inventory Turnover Ratio (vi) Average Collection Period (vii) Return on Assets (viii) Return on Equity (ix) Earnings per share (x) Price/Earings Ratio (10 marks) (b) Financial ratio analysis is often divided into five areas: profitability ratios, liquidity ratios, asset management ratios, debt ratios and market ratios. Which are the primary concerns of creditors? (4 marks) (c) Explain three (3) limitations of financial ratio analysis. (6 marks) [Total : 20 marks] This question paper consists of 4 questions on 7 printed pages