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Mr. Jasim is a trade supplier who has been approached by Saham Retail Company who are requesting credit terms for the first time. Their managing
Mr. Jasim is a trade supplier who has been approached by Saham Retail Company who are requesting credit terms for the first time. Their managing director has provided Mr. Jasim with the following extracts from the final accounts for the past two years and Mr. Jasim has approached you for advice. Details 2018 (OMR) 2017 (OMR) 25,000 45,000 570,000 800,000 15,000 10,000 250,000 Short term Investments Revenue Bills payables Cost of sales Machinery Inventory Operating costs Common share capital Bonds Retained earnings 300,000 2,150,000 45,000 192,000 2,128,000 85,000 170,000 550,000 550,000 95,000 90,000 70,000 90,000 Bank (25,000) 65,000 50,000 85,000 100,000 Accounts Receivables Accounts Payables Net profit after tax Shareholders' fund 70,000 90,000 50,000 770,000 800,000 a) As a student of financial management course, how would you evaluate and compare Profitability and Liquidity performance of Saham Retail Company with the support of ratio analyze for the two years given in the above information? b) You are required to offer an advice to Mr. Jasim based on your calculations with regards to the viability of engaging in a credit relationship with Saham Retail Company. Justify with logical reasons
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