1.Paul is an investor who wishes to invest in the fashion bags industry. His financial advisor, Frank extracted the following information from one of the potential bag retailers; Luxury Bags Sdn Bhd for Paul to consider. The financial year-end for Luxury Bags Sdn Bhd ended on 30 June 2015.

Net Sales Revenue RM450,550

Cost of Goods Sold RM315,500

Gross Profit RM135,050

Total Operating Expenses RM 66,150

Profit for the period RM 68,900

Equity, 1 July 2014 RM253,500

Equity, 30 June 2015 RM276,500

1a. What is the mark-up cost for the Luxury Bags SdnBhd rounded to the nearest whole number?

1b. What is the gross profit margin forLuxury Bags Sdn. Bhd. rounded to the nearest whole number?

1c. What is the profit margin forLuxury Bags SdnBhd rounded to the nearest whole number?

1d. What is the percentage of expense to net sales revenue forLuxury Bags SdnBhd rounded to the nearest whole number?

1e. What is the return of equity forLuxury Bags SdnBhd rounded to the nearest whole number?

2. Using an example, explain the function of a statement of cash flows.

a. Why is it prepared?

b. What does it communicate to the reader of financial statements ?