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4 . The following information is an Income Statement 2 0 2 3 for Juju Company. 2 0 2 3 ( RM in mil )

4. The following information is an Income Statement 2023 for Juju Company.
2023
(RM in mil) Calculations 2024
(RM in mil)
Sales
COGS
Gross profit
Operating costs
EBITDA
Depreciation expense
EBIT
Interest expense
EBT
Taxes
Net Income
Dividends
Addition to RE 20.0
(8.0)
12.0
(3.0)
9.0
(0.8)
8.2
(0.2)
8.0
(3.0)
5.0
(2.0)
3.0
Is the forecast Income Statement for 2024 is better than 2024? Evaluate.
5. Qabul Corporation has a corporation tax rate of 20%. They have announced total sales at RM420 million and a net margin of 5%. If they have RM100 million of debt outstanding on which they have to pay 10% annually, what will their times interest earned ratio (TIE) be?
6. When a firm enters into a loan agreement with its bank, it is very common for the agreement to have a restriction on the minimum current ratio the firm has to maintain. So, it is important that the firm be aware of the effects of its decision on the current ratio. Consider the situation of Advance Auto Parts (AAP) in 2023. The firm had total current assets of RM1,807,626,000and total current liabilities of RM1,364,994,000.
Required:
a. What is the firms current ratio?
b. If the firm were to expand its investment in inventory and finance the expansion by increasing accounts payable, how much could it increase its inventory without reducing the current ratio below 1.2?
c. If the company needed to raise its current ratio to 1.5 by simultaneously reducing its investment in current assets and reducing its accounts payable and short-term debt, how much would it have to reduce current assets to accomplish this goal?

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