Activity 2.1 Presented below are the financial statements and the comparative statements of the SUKI Corporation for the financial year 2018 and 2017. The corporation has been operating since ten years ago and intends to progressively expand their business in 2019. The corporation is pursuing KIERA Bank for additional financing in regards to their expansion plans. Balance Sheet as at June 30, 2018 (RM) Changes (%) 2017 (RM) Cash 195,000 36.84 142,500 Marketable securities 60,000 -20.00 75,000 Accounts receivable 390,000 -28.51 545,500 Inventories 187,200 67.74 111,600 Other current assets 30,000 0.00 30,000 Prepayment 28,000 211.11 9,000 Plant and equipment, net 1,620,000 58.82 1,020,000 Land 2.250.000 76.47 1,275,000 Total assets 4.760 200 48.36 3.208.600 Changes (%) 48.44 92.31 -27 27 16.25 -44.44 -6.25 19.30 18.06 7.69 Accounts payable 324.250 39.46 232,500 -25.62 Accruals 114,000 90.00 60,000 - 16.67 Short-term notes payable, 6% 60,000 -42.86 105,000 2.94 Mortgages Bond 2,100,000 100.00 1,050,000 9.38 Common stock 900,000 20.00 750,000 25.00 Paid-in Capital 700,000 43.27 488,600 5.65 Retained earnings 561,950 7.55 522.500 11.04 Total liabilities and equity 4.760,200 48.36 3.208.600 7.69 Income Statement for Years 2018 (RM) Changes (%) 2017 (RM) Changes (%) Ended June 30, Net sales 950,000 5.56 900,000 4.65 Cost of goods sold 303.000 -8.18 330,000 -1.79 Gross profit 647,000 13.51 570,000 8.78 Selling & administrative exp. 255,000 47.74 172.600 2.74 General expenses 66,000 46.67 45,000 -42.31 Depreciation 32.400 89.47 17.100 - 16.18 Operating profit 293,600 -12.44 335,300 30.16 Interest expense 213,600 91.91 111,300 8.99 Income before tax 80,000 -64.29 224,000 44 07 Income taxes 24.000 -64.29 67 200 44.07 Net income 56,000 -64.29 156,800 44,07 Financial Ratios Current ratio Acid-test ratio Net working capital Days to sell inventory Average collection period Cash turnover Accounts receivable turnover Inventory turnover Working capital turnover Fixed assets turnover Total assets turnover Debt ratio Total debt to equity Long-term debt to equity Times interest eamed Gross profit margin Operating profit margin Net profit margin Return on assets Return on equity Return on common equity 2018 1.79 1.41 391,950 178 177 1.01 2.03 2.03 2.09 0.19 0.24 54.58 120.18 97.13 1.37 68.11 30.91 5.89 1.41 2.85 6.79 2017 2.30 2.02 516.100 113 259 1.28 1.39 3.18 1.68 0.28 0.29 45.11 82.19 59.62 3.01 63.33 37.26 17.42 5.07 9.52 23.23 times times RM days days times times times times times times percent percent percent times percent percent percent percent percent percent a) Based on the above financial information, provide a concise report for the stakeholders and shareholders of SUKI Corporation emphasizing on the following concern: 1) The ability of the corporation in meeting their short-term obligations i) The relevant of additional asset acquisition for expansion h) The relevant of obtaining additional external funding iv) The current operating and profitability performances (20 marks) In order to expand their business. SUKI Corporation needs to apply RM1 million new financing for asset acquisition. Based on SUKI current position and performance, examine the financial information for KIERA Bank in determining whether SUKI Corporation has great potential to grow in the market to justify the financing application. Include the strengths and weaknesses of SUKI Corporation in your analysis. (10 marks) b) Activity 2.1 Presented below are the financial statements and the comparative statements of the SUKI Corporation for the financial year 2018 and 2017. The corporation has been operating since ten years ago and intends to progressively expand their business in 2019. The corporation is pursuing KIERA Bank for additional financing in regards to their expansion plans. Balance Sheet as at June 30, 2018 (RM) Changes (%) 2017 (RM) Cash 195,000 36.84 142,500 Marketable securities 60,000 -20.00 75,000 Accounts receivable 390,000 -28.51 545,500 Inventories 187,200 67.74 111,600 Other current assets 30,000 0.00 30,000 Prepayment 28,000 211.11 9,000 Plant and equipment, net 1,620,000 58.82 1,020,000 Land 2.250.000 76.47 1,275,000 Total assets 4.760 200 48.36 3.208.600 Changes (%) 48.44 92.31 -27 27 16.25 -44.44 -6.25 19.30 18.06 7.69 Accounts payable 324.250 39.46 232,500 -25.62 Accruals 114,000 90.00 60,000 - 16.67 Short-term notes payable, 6% 60,000 -42.86 105,000 2.94 Mortgages Bond 2,100,000 100.00 1,050,000 9.38 Common stock 900,000 20.00 750,000 25.00 Paid-in Capital 700,000 43.27 488,600 5.65 Retained earnings 561,950 7.55 522.500 11.04 Total liabilities and equity 4.760,200 48.36 3.208.600 7.69 Income Statement for Years 2018 (RM) Changes (%) 2017 (RM) Changes (%) Ended June 30, Net sales 950,000 5.56 900,000 4.65 Cost of goods sold 303.000 -8.18 330,000 -1.79 Gross profit 647,000 13.51 570,000 8.78 Selling & administrative exp. 255,000 47.74 172.600 2.74 General expenses 66,000 46.67 45,000 -42.31 Depreciation 32.400 89.47 17.100 - 16.18 Operating profit 293,600 -12.44 335,300 30.16 Interest expense 213,600 91.91 111,300 8.99 Income before tax 80,000 -64.29 224,000 44 07 Income taxes 24.000 -64.29 67 200 44.07 Net income 56,000 -64.29 156,800 44,07 Financial Ratios Current ratio Acid-test ratio Net working capital Days to sell inventory Average collection period Cash turnover Accounts receivable turnover Inventory turnover Working capital turnover Fixed assets turnover Total assets turnover Debt ratio Total debt to equity Long-term debt to equity Times interest eamed Gross profit margin Operating profit margin Net profit margin Return on assets Return on equity Return on common equity 2018 1.79 1.41 391,950 178 177 1.01 2.03 2.03 2.09 0.19 0.24 54.58 120.18 97.13 1.37 68.11 30.91 5.89 1.41 2.85 6.79 2017 2.30 2.02 516.100 113 259 1.28 1.39 3.18 1.68 0.28 0.29 45.11 82.19 59.62 3.01 63.33 37.26 17.42 5.07 9.52 23.23 times times RM days days times times times times times times percent percent percent times percent percent percent percent percent percent a) Based on the above financial information, provide a concise report for the stakeholders and shareholders of SUKI Corporation emphasizing on the following concern: 1) The ability of the corporation in meeting their short-term obligations i) The relevant of additional asset acquisition for expansion h) The relevant of obtaining additional external funding iv) The current operating and profitability performances (20 marks) In order to expand their business. SUKI Corporation needs to apply RM1 million new financing for asset acquisition. Based on SUKI current position and performance, examine the financial information for KIERA Bank in determining whether SUKI Corporation has great potential to grow in the market to justify the financing application. Include the strengths and weaknesses of SUKI Corporation in your analysis. (10 marks) b)