Assignment Requirements 1. Prepare a 5-to-8-page report (exclude the assignment cover, the assignment question, and the reference page). Type your response/findings/ answers using Microsoft Word. Answers with verbatim quotations from references will not be accepted. 2. You can use Excel for your workings (calculation parts) but you need to copy and paste it in Microsoft Word (to be submitted in this course). 3. Any font type will do but make sure that the font size is 12 with 1.5 spacing. 4. The cover page should include the assignment title, course code, course name, your name, and matric number for every group member. 5. Reference/s should be clearly spelled out (on ONE separate page at the end of your answer). Assignment Question Being a careful investor, Ms. Sally always examines a company thoroughly before purchasing shares of its stock for investment. Ms. Sally is interested in the common stock of SBS Corp. The company is in the Industrial Product Sector. The following data are available on a website that reports financial data for companies listed on the Stock Market: Year 2020 2021 Liquidity Current Ratio 4.35 3.18 Quick Ratio 3.10 1.78 Asset Management Inventory Turnover 10.00 8.89 Average Collection Period 40.15 39.54 Fixed Asset Turnover 0.91 1.04 Total Asset Turnover 0.69 0.79 Debt Management Debt Ratio 0.14 0.16 Debt Equity Ratio 0.17 0.20 Times-interest-earned 13.33 27.33 EBITDA Coverage 13.33 27.33 Profitability Profit Margin 5% 12% Basic Earning Power 6% 13% Return on Assets (ROA) 4% 9% Return on Equity (ROE) 4% 11% Earnings Per Share EPS (RM) 0.052 0.138 Dividends Per Share DPS (RM) 0.023 0.032 Book Value per Share BVPS (RM) 1.168 1.274 Cash flow per Share CFPS (RM) 0.092 0.188 Market Ratios Share Price (RM) 0.8 0.95 PE Ratio 15.4 6.9 There were no changes in a number of common stock outstanding over the two-year period. The earnings before interest and tax were RM800 thousand and RM2.05 million respectively in 2020 and 2021. The corporate tax rate is 30%. You also have gathered some data and found that the cost of capital in 2020 was 9% and has increased to 10% in 2021. An added information from the website states that currently the average PE ratio of the Stock Market is 16 times, and the average industry PE ratio similar to SBS Corp is 12 times. Evaluate the financial position and operation of SBS Corp. Give your opinion on whether Ms. Sally should invest in the company?