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please help me solve the problem, thanks. Question 2 Alex is currently considering to invest his money in one of the companies between Company A
please help me solve the problem, thanks.
Question 2 Alex is currently considering to invest his money in one of the companies between Company A and Company B. The summarized final accounts of the companies for their last completed financial year are as follows: Statements of Comprehensive Income Company A RM RM RM 160,000 (120,000) 40,000 Company B RM 240,000 (180,000) 60,000 12,000 18,000 Sales Cost of sales Gross profit Less: Administration expenses Selling and distribution expenses Other operating expenses Financial expenses 6,000 9,500 10,000 3,000 14,000 500 Net profit (31,000) 9,000 (42,000) 18,000 ...3/. 3 Company A Company B RM RM RM RM Statements of Financial Position Non-current Assets 80,000 180,000 Current Assets Inventory Receivables Bank 30,000 6,000 4,000 50,000 20,000 10.000 40,000 120,000 80,000 260,000 Total Asset Capital and reserves Ordinary share capital Accumulated profits 60,000 20,000 80,000 160,000 75,000 235,000 Non Current liabilities 10% Loan stock 30,000 5,000 Current liabilities Payables Total Capital and reserves 10,000 120,000 20,000 260,000 Required: a. Calculate the following ratios for Company A and Company B. State clearly the formulae used for each ratio: i. iv. Gross Profit Margin Net Profit Margin Inventory Turnover Period (days) Receivables Collection Period (days) Payables Payment Period (days) Current Ratio Quick Ratio V. vi. vii. (8 marks) b. Comment on each of the ratios calculated in part (a) above. (7 marks) ..4/
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