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QUESTION 3 (20 MARKS) The MAJU JAYA Dairy Farm's Financial Position and Performance are shown in Table below. Relative rating of actual measure Category and
QUESTION 3 (20 MARKS) The MAJU JAYA Dairy Farm's Financial Position and Performance are shown in Table below. Relative rating of actual measure Category and Measure Actual Results Vulnerable Strong Liquidity Current ratio 1.8 1.0 2.0 Working capital RM110,000 Working capital to gross 14% revenues 10% 30% Solvency Net worth (equity) Debt/asset (D/A) ratio Equity/asset (E/A) ratio Debt/equity (D/E) ratio RM1,043,346 46% 54% 0.86 70% 40% 1.5 40% 70% 0.43 Profitability (market) Net farm income Rate of return on asset (ROA) Rate of return on equity (ROE) Operating profit margin ratio EBITDA (Earnings before interest, income taxes, depreciation and amortization) RM98.000 3.8% 2.2% 8.7% RM200,000 4% 3% 15% 8% 10% 25% Using the information related to MAJU JAYA Dairy Farm's Financial Position and Performance, answer the following questions: 3 a) Describe the LIQUIDITY conditions of MAJU JAYA Dairy Farm's. (5 marks) b) Describe the SOLVENCY conditions of this farm. (5 marks) c) Describe the PROFITABILITY conditions. (5 marks) d) Give TWO (2) suggestions to MAJU JAYA Dairy Farm management team to improve their PROFIT in their business
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