Principles of Finance BAFB1013 Test 1 Instructions: 1. This test consists of ONE (1) question. You are required to answer all questions and need to support your answer by showing relevant workings. 2. The workings need to be using the formula as per the discussion during class hours with the course leader/tutor. 3. Submit your answer using MS Words/Pdf format. Question: The financial statements for Bunga Rotan Berhad (BRB) are provided below: Income Statement For the financial year ended 31 December, (in RM'000) 2022 2021 Revenue 18,184 19,205 Cost of sales 3,000 2,780 Gross profit 15,184 16,425 Operating expenses 13,533 14,703 Interest expenses 420 372 Earnings before tax 1,231 1,350 651 858 Net income 580 492 Statement of Financial Position As at 31st December (in RM'000) 2022 2021 Cash 4,875 4,986 Accounts receivable 12,239 11,073 Inventory 2,147 2,086 19,261 18,145 Non-current assets 3,042 2,714 Total assets 22,303 20,859 Accounts payables 154 135 Short-term notes payables 5,485 5,437 5,639 5,572 Non-current liabilities 9,966 9,071 Common stocks 3,257 3,286 Retained earnings 3,441 2,930 Total liabilities and equities 22,303 20,859 From the information given, you are required to answer the following questions. a. For both years, compute the following: i. Return on equity ii. Return on assets Inventory turnover iv. Average collection period V. Accounts receivable turnover 1 (3 Marks) (3 Marks) (3 Marks) (3 Marks) (3 Marks) b. Based on your computation in part (a) interpret and compare the performance of BRB for the year 2022 and the year 2021 based on the following categories of ratio: L Asset management Profitability *** end of question *** (6 Marks) (4 Marks) (Total: 25 Marks)