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Hi Tutor, need your help. Thank you Question 3 The following information is taken from Tanaka Bhd for the year ended 31 December 2020. Preference
Hi Tutor, need your help. Thank you
Question 3 The following information is taken from Tanaka Bhd for the year ended 31 December 2020. Preference dividend declared and fully paid in 2020: RM100,000 Ordinary dividend declared and fully paid in 2020: RM3,960,000 Preference share marketable price per unit at 31 December 2020: RM4.60 Ordinary share marketable price per unit at 31 December 2020: RM9.00 Tanaka Bhd Statement of Comprehensive Income for the year ended 31 December 2020 RM'000 Sales 100,000 Less: Cost of sales (65,000) Gross profit 35,000 Less: Expenses Marketing expenses (13,000) Administration expenses (9,200) Finance expenses (2,880) (25,080) Operating profit before tax 9.920 Taxation (3,472) Operating profit after tax 6,448 Tanaka Bhd Statement of Financial Position as at 31 December 2020 2019 Non-current assets RM'000 RM'000 Furniture (Net book value) 31,840 29,200 Current assets Cash at bank 2,448 3,520 Inventory 13,000 13,200 Accounts receivable 7,600 7,000 Quoted shares 600 500 23,648 24,220 Current liabilities Accounts payable 10,400 10,920 Accruals 300 500 10,700 11,420 Working capital 12,948 12,800 Non-current liabilities Long term loan 18,400 18,000 Net assets 26,388 24,000 Shareholder's equity 14,400 14,400 14.4 million ordinary shares 500,000 9% preference share 1,000 1,000 Retained profits 10,988 8,600 26,388 24,000 Required: a. Calculate the following ratio for 2020: Industry average ratio i. Current ratio ii. Quick ratio iii. Inventory turnover iv. Receivables turnover V. Asset turnover vi. Times interest earned vii. Profit margin viii. Earnings per share ix. Price-earning ratio X. Rate of return on total assets 2.3:1 1.1:1 5.0 12.5 2.0 5.8 4.0% RM0.46 10.5 11.0% Assumption: all sales in credit; finance expense means interest; ordinary share outstanding throughout both years = 10,000,000 shares. (10 marks) b. From the industry average, comment on Tanaka Bhd's profitability and short-term liquidity. (10 marks)Step by Step Solution
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