Delta Sdn Bhd 2020 Income Statements (RM in millions)

	RM
Net Sales	8,450
Less : Cost of Good Sold	7,240
Less : Depreciation	400
Earning before interest and taxes	810
Less : Interest paid	70
Taxable Income	740
Less Taxes	259
Net Income	481

Delta Sdn Bhd 2019 and 2020 Balance Sheet (RM in millions)

	2019	2020		2019	2020
Cash	120	140	Account Payable	1110	1120
Account Receivables	930	780	Long Term Debt	840	1210
Inventory	1480	1520
Total Current Asset	2530	2440	Ordinary Shares	3200	3000
Net Fixed Asset	3150	3600	Retained Earnings	530	710
Total Asset	5680	6040	Total Liabilities and Equities	5680	6040

Mr Kelvin, manager for Delta Sdn Bhd just contacted you to request for a credit facility from your company. Based on the financial statements provided by Delta Sdn Bhd, you are required to answer the following questions:

(a)Calculate the average collection period and day of sales outstanding for the company and what can you conclude from this information. (Assume net sales is credit sales) (8 marks)

(b)Comment on the Delta financial performance and includes in your analysis the company liquidity, profitability and leverage ratios, (15 marks)

(c)Based on your analysis, would you grant the credit facility to Delta, explain your decision. (5 marks)

(d)List TWO (2) other sources in obtaining consumer credit information.