$7.$ You are being 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:

Energy$-$X

Balance Sheet $($RM millions$)$ as at December $31,2022$ and $2023$

$2022)2023$

Assets $($RM in mil$)($RM in mil$)$

Cash $911$

Accounts receivable $107139$

Inventory $198291$

Net fixed assets $550625$

Total Assets $8641066$

Liabilities & Equities

Accounts payable $88101$

Long$-$term debt $353488$

Common equity $423477$

Total liabilities and equity $8641066$

Energy$-$X

Income Statement $($RM million$)$ as at December $31,2022$ and $2023$

$20222023$

$($RM in mil$)($RM in mil$)$

Sales $11001250$

COGS $792875$

Gross profit $308375$

Operating expenses $176212$

Operating profit $132163$

Interest expense $5273$

Taxes $3236$

Net profit $4854$

Industry Averages

Current ratio $2\mathrm{.}5$ times

Day sales outstanding $33$ days

Inventory turnover $5$ times

Debt ratio $50\%$

Net profit margin $7\%$

Required:

a$.$ Compute the ratios $($according to the listed ratios as above$)$ for $2022$ and $2023.$ Analyse the ratios as the above between these $2$ years.

b$.$ From $($a$),$ analyse the ratios as the above between $2023$ 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.