Note: Assume that the year-end balance shown for accounts receivable, inventory, total assets, total equity approximate the average balances of these items through the year. You have obtained the industry average to be used in your analysis. The information is presented below: Industry average for 2019 & 2020 2 1.2 4 times Types of ratios i. Current ratio ii. Acid-test ratio iii. Inventory turnover iv. Account receivable turnover V. Debt ratio vi. Times interest earned vii. Net profit margin viii. Return on equity ix. Return on assets 6 times 50% 4 times 8% 10% 6% Required: a. Compute the stated ratios above for Enara Products Bhd for year 2020 (round answer to 2 decimal places). (18 marks) b. Based on your analysis, should you invest in Enara Products Bhd.? Support your answer with reference to your workings in (a) above. (7 marks) Note: Formulae for the ratios are given on the last page of the exam. paper. QUESTION 2 You are interested to invest in Enara Products Bhd. You are given the following financial statements of the company to help you in your analysis and decision making. Statement of profit or loss for the year ended 31 December 2020 2019 RM RM Net sales 673,500 532,000 Cost of goods sold (411,225) (345,500) Gross profit 262,275 186,500 Operating expenses (209,550) (134,980) Profit before interest and tax 52,725 51,520 Finance cost (12,100) (13,300) Profit before tax 40,625 38,220 Income tax expense (9,525) (8,845) Profit for the year 31,100 29,375 Statement of financial position as at 31 December 2020 Assets RM Property, plant and equipment, net 278,500 Inventory 112,500 Prepaid expenses 10,700 Account receivable, net 89,500 Cash 31,800 Total assets 523,000 2019 RM 255,000 82,500 9,375 62,500 35,625 445,000 Liabilities and Equities Share capital Retained earnings 163,500 131,100 294,600 98,500 129,900 523,000 163,500 104,750 268,250 101,500 75,250 445,000 Long-term borrowing Accounts payable Total equity and liabilities