2 Statement of Financial Position A Bhd B Bhd RM RM Assets Cash 20,000 36,500 Account receivable, net 77,100 70,500 Current notes receivable (trade) 11,600 9,000 Merchandise inventory 86,800 82,000 Prepaid expenses 9.700 10,100 Property, plant and equipment, net 176,900 252,300 Total assets 382,10 460,400 0 Liabilities and Equity Current liabilities 90,500 97,000 Long-term notes payable 93,000 93,300 Share capital 133,000 141,000 Retained earnings 65,600 129,100 Total liabilities and equity 382,10 460,400 0 Statement of Profit and Loss Sales Cost of goods sold Interest expense Income tax expense Net profit Basic earnings per share A Bhd RM 393,000 B Bhd RM 667,500 290,600 480,000 5,900 12,300 5,700 12,300 33,850 61,700 1.27 2.19 Additional Information i. Beginning data for Statement of Financial Position Accounts receivable, net Current notes receivable (trade) Merchandise inventory Total assets Share capital Retained earnings A Bhd B Bhd RM RM 72,200 73,300 0 0 105,100 80,500 383,400 443,000 133,000 141,000 49,100 109,700 ii. Each company paid cash dividends of RM1.50 per share and each company's shares can be purchased at RM25 per share. Required: a. i. For both companies compute: Current ratio Acid-test ratio Accounts (including notes) receivable turnover Inventory turnover Days' sales in inventory Days' sales uncollected (12 marks) ii. From your answer in (i) above, evaluate which company has a better short- term credit risk. b. i. For both companies compute: Profit margin ratio Total asset turnover Return on total assets (4 marks) Return on ordinary shareholders' equity Price-earnings ratios Dividend yields (12 marks) ii. From your answer in (i) above, evaluate which company's shares you would recommend as a better investment avenue. (4 marks)