Elegant Sdn Bhd was established in year 2004. The company has invested substantial efforts in product development, such as, shampoo and conditioner. Below are the Statement of Financial Position and Statement of Comprehensive Income for the year ended December 31, 2012 and 2013.

Elegant Sdn Bhd

Extracted Statement of Financial Position as at

31 December 2012 and 2013

(in thousands)

2012

2013

Current Assets

Cash and Cash Equivalent

287,439

483,636

Investments

-

807,460

Accounts Receivables

3,422

12,024

Inventories

80,643

134,722

Total Current Assets

371,504

1,437,842

Non-Current Assets

Property, Plant & Equipments

54,236

84,267

Intangible Assets

23,107

33,849

Total Non-Current Assets

77,343

118,116

Total Assets

448,847

1,555,958

Current Liabilities

Accounts Payables

74,230

78,333

Others

1,800

1,728

Accrued Income Tax

57,233

14,323

Total Current Liabilities

133,263

94,384

Non-Current Liabilities

Financial Lease Liabilities

700

423

Long-Term Loans

6,721

3,942

Others

2,000

3,420

Total Non-Current Liabilities

9,421

7,785

Total Liabilities

142,684

102,169

Shareholders' Equity

Issued and Paid-up Capital

50,000

330,000

Premium on Share Capital

-

925,588

Retained Earnings

256,163

198,201

Total Shareholders' Equity

306,163

1,453,789

Total Liabilities and Shareholders' Equity

448,847

1,555,958

Elegant Sdn Bhd

Extracted Statement of Comprehensive Income for the Year Ended

31 December 2012 and 2013

(in thousands)

2012

2013

Sales Revenue

600,000

800,000

Cost of Sales

180,178

235,429

Gross Profit

419,822

564,571

Other Incomes and Expenses

Interest Income

850

3,284

Other Incomes

2,700

3,876

Selling Expenses

184,233

276,429

Administrative Expenses

70,123

89,200

Profit before Interest and Income Tax

169,016

206,102

Interest Costs

800

355

Profit before Income Tax

168,216

205,747

Income Tax

28,596

34,977

Profit for the Year

139,620

170,770

Assume the company expanded its business for hair care product development in year 2013. The company issued shares capital, raised new long-term loan of RM100,000 and retired RM2,000,000 during year 2013. The depreciation for the year is RM7,000,000. The company also purchased property, plant and equipment for RM40,000,000 and sold RM5,000,000 in year 2013. Dividend payment in year 2013 is RM231,642,000.

a) Calculate the following ratios for 2012 and 2013 as well as the change between these 2 years :

i) Current ratio

ii) Quick ratio

iii) Accounts receivable turnover

iv) Inventory turnover

v) Profit margin

vi) Return on equity (ROE)

vii) Return on assets (ROA)

viii) Debt-equity ratio

(1.5 marks x 8 = 12 marks)

b) Comment on the performance of the company. For each ratio, comment on the pros and cons of the change of ratio between the 2 years.(1 mark x 8 = 8 marks) Total

30 marks