(i). Prepare a Statement of Cashflow for the year ended 31 December 2020.

(ii). Compute the following ratio (you must write the formula and show calculation), for the year 2020 and analyze the business performance (Intracompany and Intercompany comparison only):

- Accounts Receivables Turnover (2019 - 2.98, Athlede and Co.- 4.01) - Inventory Turnover (2019- 0.97, Athlede and Co.- 0.88)

- Days in Inventory (2019 - ? , Athlede and Co.- ?)

- Quick Ratio (2019- 2.1, Athlede and Co.- 1.5)

- Profit Margin (2019 - 45.2 , Athlede and Co.- 39 )

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- Asset Turnover (2019- 0.70, Athlede and Co.- 1.11)

- Return on Asset (2019- 21.22, Athlede and Co.- 10)

- Return on Common Stockholder’s Equity (2019 - 35, Athlede and Co.- 14.01) - Debt to Asset Ratio (2019- 41.5, Athlede and Co.- 63.5)

- Payout Ratio (2019- 23.33, Athlede and Co.- 50.1)

Note: You will calculate 2020 (current year) ratio yourself and previous years values and competitors (Athlede and Co.) values are given within the brackets. Use those figures to do the comparison. 

(iii). Imagine, you are a credit (loan) manager of City bank Ltd from which Chang and Lee Corporation intends to take a new loan. Comment on which ratio of Chang and Lee Corporation would you look into in order to sanction the loan? Would you agree to give a loan to Chang and Lee Corporation? Give your reasons. (Your reasoning must include decision based on the ratio analysis, you may choose to show calculation of any other ratio that is not answered in Part ii)

Comparative Balance Sheet

Chang and Lee Corporation

For the year ended 31 December

Details	2020 ($)	2019 ($)
Non - Current Assets
Equipment	270,000	242,500
Accumulated Depreciation	(50,000)	(52,000)
Land	114,000	143,000
Total Non-current Asset	334,000	333,500
Current Assets
Cash	81,600	48,000
Accounts Receivables	92,000	33,400
Inventory	121,000	101,580
Prepaid Expense	24,900	27,270
Liabilities
Current Liabilities
Accounts Payables	109,300	62,300
Accrued Salary Payables	19,200	22,000
Longterm Liabilities
Bank Loan	110,000	150,000
Owner’s (Stockholder’s ) Equity
Common Stock	224,000	175,000
Retained Earnings	220,000	105,450
Total Owner’s (Stockholder’s) Equity	444,000	280,450

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Income Statement

Chang and Lee Corporation

For the year ended 31 December 2020

Detail	($)	($)
Revenue		428,000
Less: Cost of goods sold		(148,460)
Gross Profit		279,540
Less: Expenses:
Salary Expense	101,650
Interest Expense	12,000
Depreciation Expense	9,000
Other Expenses	13,000
Total Expenses		(135,650)
Net Income		143,890

Additional Information:  

a. New equipment was purchased for cash. Land was sold for cash and on the date of the sale, the book value of the land sold was same as the cash received. 

b. New stocks were issued for which the company received $49,000 from the public. 

c. A cash dividend of $98,340 was paid during the year.  

d. Current market price of each share of Chang and Lee Corporation is $8.88. 

e. Athlede and Co. is a major competitor of Chang and Lee Corporation