Followings are extracted from year 2020 annual financial report of ABC company listed in Boursa Kuwait. Consolidated Statement of Income for the year ended 31 December 2020 (All amounts are in Kuwaiti Dinars) Note 2019 19 20 2020 42,465,225 (54,444,578) (11,979,353) 261,864 (3,660,777) (15,378,266) (4,128,659) (2,446,177) 25,905 2,656,230 1,087,195 (18,183,772) Sales Cost of sales Gross (loss)/ profit Other operating income Selling, general and administrative expenses Operating (loss)/profit Provision for expected credit losses Finance charges Interest income Net investment profits Group's share of results of associates Net (loss)/ profit before deductions Contribution to Kuwait Foundation for the Advancement of Sciences National Labour Support Tax Zakat Net (loss)/ profit for the year 11 81,819,157 (74,033,079) 7,786,078 429,353 (4,028,725) 4,186,706 (249,475) (3,043,437) 3,550 3,105,231 135,338 4,137,913 (39,370) (63,776) (18,593) 4,016,174 21 7 (18,183,772) Note 2020 2019 5 Assets Non-current assets Property, plant and equipment Intangible assets Investments properties Investments in associates Financial assets at fair value through other comprehensive Income Right of use assets 6 7 8 9 136,211,120 10 770,641 16,380,034 77,474,477 3.989,802 234,826,084 152,261,624 32,852 770,641 15,775,973 89,221,830 4,488,527 262.551 447 Current assets Inventories Accounts receivable and other debit balances Cash and cash equivalents 10 11 12 13,330,333 15,704,653 15, 186,967 44,221,953 279,048,037 16,429,047 27,471,315 9,528,618 53 428.980 315,980,427 13 14 Total assets Equity and liabilities Equity Share capital Share premium Treasury shares Profits on sale of treasury shares Statutory reserve Voluntary reserve General reserve Investments revaluation reserve Group's share in associates' reserves Group's share in foreign currency exchange reserve (Accumulated losses)/ retained earnings Equity attributable to the Parent company shareholders Non-controlling interests Total equity 15 16 73,330,387 26,675,810 (13,546,935) 441,409 48,270,703 42,048,346 18,930,128 (14,590,317) (176,209) 107,677 (5,606,536) 175,884,463 148, 103 176,032,566 73,330,387 26,675,810 (13,546,935) 441,409 48,270,703 42,048,346 18,930,128 (2,347,295) (54,746) 95,186 15,320.862 209,163,855 163 843 209,327,698 17 Liabilities Non-current liabilities Loans, bank facilities and murabaha Provision for employees' end of services indemnity Lease liability 53,010,713 3,522,910 3,481, 193 60,014,816 57,737,687 3,594,497 3,933,552 65,265,736 9 Current liabilities Loans, bank facilities and murabaha Accounts payable and other credit balances Lease liability 17 18 9 20,530,142 22,015, 137 455 376 43,000,655 103,015,471 279,048,037 18,963,851 21,983,181 439,961 41,386,993 106,652,729 315.980,427 Total Liabilities Total equity and liability QUESTION 5) (25 pts) Using 2019-2020 financial reports of ABC, a) Since Company ABC recorded loss in 2020 due to COVID-2019 crisis, calculate the followings FOR 2019 ONLY: (Show calculations) (10 pts - 2 pts each) Return on Asset (ROA), Return on Equity (ROE), Net Profit Ratio, Asset Turnover and Equity Multiple USE THE BELOW INDUSTRY AVERAGES FOR (b), (c), (d) and (e) parts of Question 5. Industry average Industry average Industry average Net Profit Ratio Equity Multiple 0.12 0.50 2.50 Asset Turnover b) What is the industry average for ROA in 2019? Show your calculation. (2.5 pts) c) Considering the ratios you found in (a) and industry average you found in (b) which ratio(s) should be improved to record a better ROA in the coming years? (min. 30 words, 5 pts) d) What is the industry average for ROE in 2019? Show your calculation. (2.5 pts) e) Considering the ratios you found in (a) and industry average you found in (d) which ratio(s) should be improved to record a better ROE in the coming years? (min. 30 words, 5 pts) mental med RATIOS Do were any other formule in your calculation Asset Turnover Sales Revenue / Total Assets Cash Conversion Cyde-Days in Receivables. Days in Inventory Days in Pwyables Current Ratio - Current Assets / Current Liabilities Days in Inventory = 360 / Inventory Turnover Days in Payables = 360 / Payables Turnover Days in Receivables 360/ Receivables Turnover Debt to Equity - Total Debt/Total Equity Equity Multiple - Total Asset / Equity Inventory Turnover Cost of Sales / Inventory Liabilities to Equity - Total Liabilities/Total Equity Net Profit Ratio - Net Income / Sales Revenue Payables Turnover - Cost of Sales / Accounts Payable Quick Ratio (Current Assets - Inventory - Prepaid Expenses/ Current Liabilities Receivables Turnover Sales Revenue / Accounts Receivable Return on Asset (ROA) = Net Income / Total Assets Return on Asset (ROA) = Net Profit Ratio Asset Turnover Return on Equity (ROE) - Net Income / Equity Return on Equity (ROE) - Return on Assets x Equity Multiple