Mr. Willy of Wealthy Assets Sdn Bhd wants to buy the ordinary shares of Guan Chong Berhad which is listed in Bursa Malaysia. He has RM3 million available for investment purpose. However, he is undecided whether he should invest in this company. His friend, Mr. Wacky of Whack Sdn Bhd has recommended that he should buy this counter.

Required: As the investment consultant for Mr. Willy, you have instructed your staff to investigate and report on the financial information of the company. The team must prepare a report to present their findings and make recommendations.

Your teams professional reports should include the following:

a. Description of the principal activities of the parent company, as well as the corporate structure, names, countries of incorporation, shareholdings, and principal activities of related companies. The team may tabulate the organizational structure.

b. Use the groups 2 years financial information to: (a) Calculate (with workings) the following financial ratios pertaining to the profitability, efficiency, liquidity, solvency, and debt-equity.

c. Interpret the above financial ratio analysis and indicate whether they are strengths or weaknesses to the company.

No. Ratio Formula 2020 2019 Variance Page numbers 1 2 3 4 5 Gross profit margin Net profit margin Interest cover Inventory turnover in days Accounts receivable turnover in days Accounts payable turnover in days Returns on shareholders' equity Current ratio Quick ratio Gearing ratio 6 7 8 9 10 No. Ratio Formula 2020 2019 Variance Page numbers 1 2 3 4 5 Gross profit margin Net profit margin Interest cover Inventory turnover in days Accounts receivable turnover in days Accounts payable turnover in days Returns on shareholders' equity Current ratio Quick ratio Gearing ratio 6 7 8 9 10