EXERCISE 6: FINANCIAL STATEMENT ANALYSIS Untung Besar Sdn Bhd has been in operation since 1998. To ensure its competitiveness with other firms within the same industry, the CEO request constant review of company's financial performance. One of the firm review approaches is to benchmark the firm performance with relative to overall industry achievement. Below is the comparative active income statement and balance sheet of the company. Untung Besar Sdn Bhd Comparative Income Statements For the year ended December 31, 2007 and 2008 Sales revenue Cost of goods sold Gross profit Administrative expenses Selling expenses Net income Current Assets 2008 RM 3,143,980 1,960,700 1,183,280 510,300 230,130 442,850 Untung Besar Sdn Bhd Balance Sheet as at December 31, 2008 2008 RM 2007 RM 2,316,000 1,505,400 810,600 310,000 180,145 320,455 2007 RM Inventory Cash Receivable accounts Total current assets Total Fixed assets Total assets Current liabilities Payable accounts Tax payable 110,230 83,650 120,100 313,980 1,130,000 1,443,980 130,300 75,285 144,120 349,705 1,210,450 1,560,155 Total current liabilities Long term loan 120,400 87,000 207,400 320,000 126,230 78,300 204,530 361,600 Owners' equity 916,580 956,705 Total liabilities and owners' equity 1,443,980 1,522,835 Instructions: a) Prepare vertical analysis on income statement of 2007 and 2008 for Untung Besar Sdn Bhd. b) Prepare horizontal analysis on all balance sheet items for Untung Besar Sdn Bhd. EXERCISE 6: FINANCIAL STATEMENT ANALYSIS Untung Besar Sdn Bhd has been in operation since 1998. To ensure its competitiveness with other firms within the same industry, the CEO request constant review of company's financial performance. One of the firm review approaches is to benchmark the firm performance with relative to overall industry achievement. Below is the comparative active income statement and balance sheet of the company. Untung Besar Sdn Bhd Comparative Income Statements For the year ended December 31, 2007 and 2008 Sales revenue Cost of goods sold Gross profit Administrative expenses Selling expenses Net income Current Assets 2008 RM 3,143,980 1,960,700 1,183,280 510,300 230,130 442,850 Untung Besar Sdn Bhd Balance Sheet as at December 31, 2008 2008 RM 2007 RM 2,316,000 1,505,400 810,600 310,000 180,145 320,455 2007 RM Inventory Cash Receivable accounts Total current assets Total Fixed assets Total assets Current liabilities Payable accounts Tax payable 110,230 83,650 120,100 313,980 1,130,000 1,443,980 130,300 75,285 144,120 349,705 1,210,450 1,560,155 Total current liabilities Long term loan 120,400 87,000 207,400 320,000 126,230 78,300 204,530 361,600 Owners' equity 916,580 956,705 Total liabilities and owners' equity 1,443,980 1,522,835 Instructions: a) Prepare vertical analysis on income statement of 2007 and 2008 for Untung Besar Sdn Bhd. b) Prepare horizontal analysis on all balance sheet items for Untung Besar Sdn Bhd.