Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me . Please please QUESTION 4 After Image Company is applying for a loan from the Good Bank to set-up new branches. In

Please help me . Please please

image text in transcribed

QUESTION 4 After Image Company is applying for a loan from the Good Bank to set-up new branches. In order to evaluate the firm as a potential debtor, the bank would like to compare After Image Company's performance with the industry. The following are the financial statements given by the company. AFTER IMAGE COMPANY STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021 (RM) (RM) 22,500 Cash 45,000 Accounts payable 135,000 Accrued expenses 360,000 Marketable securities Accounts receivable Inventories 540,000 Bank Draft 360,000 337,500 Bond 900,000 Net plant and equipment 517,500 1,192,500 Common Share Retained earnings 90,000 TOTAL ASSETS 2,250,000 TOTAL CLAIMS 2,250,000 AFTER IMAGE COMPANY INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2021 (RM) Sales (100% Credit) 1,350,000 Less: Cost of goods sold 945.000 Gross Profit 405,000 270.000 Less: Operating Expenses Operating Profit 135,000 45.000 Less: interest expenses Earnings before tax Less: taxes 90,000 36,000 Net Profit 54,000 INDUSTRY AVERAGE RATIOS Current ratio 2.00 times Average collection period 90 days Quick ratio 1.50 times Fixed asset turnover 1.40 times Debt ratio Net profit margin 6.00% Times interest earned 3.50 times Return on equity 3.60% Based on the After Image Company financial statements and industry average ratios: a) Calculate the indicated financial ratios for After Image Company. b) Evaluate the overall performance of the company according to liquidity, activity, profitability and leverage ratios. 50.00%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management Theory And Practice

Authors: Prasanna Chandra

11th Edition

9355322208, 978-9355322203

More Books

Students also viewed these Finance questions