Question $2($CLO $1)$

Refer to the following financial statements of Sky Sdn$.$ Bhd$.$ for the years $2023$ and $2022$:

Sky Sdn$.$ Bhd

Balance Sheets

$31$ December $($in millions$)$

$20232022$

Assets

Current assets

Cash

Accounts receivable $($net$)$

Inventories

Other current assets

Total current assets

Property $($net$)$

Other assets

Total assets

RM$460$

$1,188$

$1,132$

$247$

$3,027$

$3,281$

$5,593$

RM$11,901$

RM$444$

$1,190$

$1,056$

$225$

$2,915$

$3,128$

$5,804$

RM$11,847$

Liabilities and Stockholders$$ Equity

Current liabilities

Long$-$term liabilities

Stockholders$$ equity $$ common

Total liabilities and stockholders$$ equity

RM$3,313$

$6,826$

$1,762$

RM$11,901$

RM$3,184$

$6,509$

$2,154$

RM$11,847$

Sky Sdn$.$ Bhd

Income Statements

For the year ended $31$ December $($in millions$)$

$20232022$

Net sales

Cost of goods sold

Gross profit

Selling and administrative expenses

Income from operations RM$13,198$

$7,750$

$5,448$

$3,472$

$1,976$ RM$12,397$

$7,108$

$5,289$

$3,299$

$1,990$

Interest expense

Other $($income$)$ expense, net

Income before income taxes

Income tax expense

Net income $233$

$11$

$1,732$

$503$

RM$1,229248$

$0$

$1,742$

$502$

RM$1,240$

Required:

Analyse Sky$$s financial statement. Include the following ratios for $2022$ and discuss your findings $(2021$ values are provided for comparison$)$:

a$)$ Current ratio $($year $20210\mathrm{.}92$:$1)$

b$)$ Inventory turnover $($year $20217\mathrm{.}2$ times$)$

c$)$ Debt to assets ratio $($year $202182\%)$

d$)$ Return on assets $($year $202110\mathrm{.}8\%)$

e$)$ Profit margin $($year $202110\mathrm{.}0\%)$

f$)$ Return on common stockholders$$ equity $($year $202156\%)$

Based on the result, evaluate the financial health for Sky Sdn$.$ Bhd$.$ Provide suggestions to improve the financial performance of the company.