Name :UMAMAGESWARY A/P SUNDARA RAJU

ID No. / Matrix :M19711048

Date :24th April, 2020

Subject :GACT 5113 Managerial Accounting

Lecturer :Prof. Dr. Barjoyai Bardai

Mark (%) :/50x10%

Assessment : Short-Answer Question 2

3

As the senior management team of the company, you are required to revise the budget for 2020 to take into account the impact of recession and COVID 19 on the company. The following are the details that you have to take into account:

The current share price is at RM 1.08. The board is targeting to increase the Market capitalisation at RM 3,000,000,000 2021.

Price Earning ratio is expected to remain the same in 2020 dan 2021.

The number of shares outstanding 1,404,000,000 shares

Sales volume is expected to increase by 10% because of the focus buying on grocies goods in 2020. In 2021, Revenue is expected to grow at 15%.

However, price is expected to drop by 15%

Suppliers costs is expected to drop by 5%

Operating expenses is supposed to be the same as in 2019.

(1) Variable Cost =Highest Cost - Lowest Cost(revenue-PBT)

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Highest Revenue - Lowest Revenue

=(4,538,884 - 196,887) - (4,353,640 - 187, 038)

----------------------------------------------------------------

4,538,884 - 4,353,640

=4,341,997 - 4,166,602

---------------------------------

185,244

=175,395

------------ = 0.9468

185,244

# The variable cost is RM0.9468 per RM of revenue (94.68%)

(2) Fixed Cost = Total Costs - (Revenue x Variable Costs)

= RM 4,341,997 - (RM 4,538,884 x 0.9468)

= RM 4,341,997 - RM 4,297,415.37

= RM 44,581.63

(3) Revenue 2020 = Sales volume in 2020 increase 10%; Price drop 15%

= Revenue 2019 x 1.1 x 0.85

= RM 4,538,884 x 1.1 x 0.85

= RM 4,243,856.54

(4) Revenue 2021 = revenuegrow 15%

= RM 4,243,856.54 x 1.15

= RM 4,880,435.02

(5) Profit Margin = Revenue per unit - variable cost

= RM 1.00 - RM 0.9468

= RM 0.0532

(6) Target Share Price = Market Capital

----------------------

No. of Share

Year 2021 = 3,000,000,000

--------------------

1,404,000,000

= RM 2.14

(7) Price Earnings Ratio =1.08

--------

7.78

= 0.1388

(8) Target EPS = Target Share Price

---------------------------

PER

=2.14

---------

0.1388

= 15.42

(9) Target Profit = Target EPS x No. of Shares

= 7.68 x 1,404,000,000

= RM 2,164,968,000

20202021

Revenue 4,243,856.54 4,880,435.02

Cost of sale

Gross profit / Profit margin

Profit margin %

Operating expenses

Operating profit

% of operating profit

Interest expenses

Profit before tax

%Profit before tax

Taxation and zakat

Effective tax rate

Profit after tax

% of profit after tax