Key Ratios for Sedap Food Berhad and Its Industry
	Sedap Food Berhad 2021 Ratios	Industry Average Ratios in 2022
Current ratio	1.2	1.4
Acid test ratio	0.89	0.94
Average collection period	30 days	25 days
Inventory turnover	18.1	20.3
Fixed assets turnover	4.1	4.8
Total asset turnover	2.78	2.8
Debt ratio	50%	60%
Times-interest-earned	5.50%	4.50%
Net profit margin	1.15%	1.50%
Return on equity	5.21%	7.32%
Sedap Food Berhad		Sedap Food Berhad
Income Statement for the Year Ended as at 31st December 2022		Income Statement for the Year Ended as at 31st December 2022
	RM ('000)			Assets	RM('000)	Liabilities and Equity	RM('000)
Sales (all credit)	200,000			Cash	2,000	Accounts payable	$18,000
Cost of goods sold	140,000			Accounts receivable	17,800	Accruals	13,350
Gross profit on sales	60,000			Inventories	8,700	Total current liabilities	31,350
Operating expenses	56,000			Total current assets	28,500	Long-term debt	8,250
Operating income	4,000			Gross fixed assets	70,000	Total liabilities	39,600
Interest expense	1,000			Accumulated depreciation	26,500	Common stock (par value and paid in capital)	2,000
Earnings before tax	3,000			Net fixed assets	43,500	Retained earnings	30,400
Income tax	1,050					Total stockholders' equity	32,400
Net income available to common stockholders	1,950			Total assets	72,000	Total liabilities and equity	72,000
Required:
a) Calculate the ratios according to the Table 1.
b) Analyse each of the above ratios as in (a).
c) Analyse either the firm liquidity, efficiency, inventory management, profitability and debt ratio has an improvement or deteriorated compared to 2021. What is/are the firm strength(s) and weakness(es)?
d) Compare the performance of the firm in 2022 with the industry according to liquidity, efficiency, inventory management, profitability and debt ratio. How to improve firm performance?