CONFIDENTIAL QUESTION 1 BM/DEC 2015/FIN420/540 Below are the financial statements for SoHo Fitness Bhd. for 2014. SoHo Fitness Bhd. Balance Sheet As At 31 December 2014 (RM) Cash and bank balance Accounts receivable Inventories Prepaid expenses 90,000 Account payable 76,500 30,100 Accrued expenses 64,850 75,350 Notes payable 20,000 29,000 Long term borrowing 200,000 90,000 Property and equipment (-) Accumulated depreciation TOTAL ASSETS 1,614,450 TOTAL LIABILITIES & EQUITY 1,614,450 1,300,000 Convertible bonds 350,000 Paid up capital 300,000 Common share 500,000 Retained Earning 103,100 Sales SoHo Fitness Bhd. Income Statement For The Year Ended 31 December 2013 (RM) Less: Cost of goods sold Gross profit Less: Administrative expenses Depreciation Interest Profit before tax Less: Tax PROFIT AFTER TAX 400,000 280,000 120,000 20,000 20,000 10,000 70,000 10,400 59,600 INDUSTRY AVERAGE RATIOS Current ratio 1.15 times Debt ratio Quick Ratio 0.85 times Average collection period 45 days Fixed asset turnover 0.30 times Return on Equity Times interest earned Net profit margin 40% 8% 10 times 16% a) Group and compute the above indicated ratios for SoHo Fitness Bhd. b) (12 marks) Evaluate the overall performance of the company based on the above groups ratios calculated. Hak Cipta Universiti Teknologi MARA (8 marks) CONFIDENTIAL