QUESTION 3 From following financial statements, calculate following ratios and analyse the current year and previous year performance a) Current ratio. b) Days sales outstanding (DSO). (Sales 2017 RM500m & Sales 2018 RM600m) c) Inventory turnover ratio d) Total debt to assets e) Return on assets (ROA) (Net income 2017 RM42m &Net income 2018 RM58m) Moon Inc. Balance Sheet (RM millions) as at December 31, 2015 and 2016 2015 21 51 2016 20 84 Cash Accounts receivable Inventory Prepaid expenses Total current assets Gross plant and equipment Less: Accumulated depreciation 85 Net piant and equipment Total Assets 106410 371 (115) 286 295 Liabilities & Equities Accounts payable Accrued expenses 41 10 14 42 12 64 Short-term notes Total current liabilities Long-term debt Total liabilities 225 235 Common stockholders' equity 82 85 16 392 Common stock Retained earnings 82 121 Total common stockholders equity Total liabilities and equity FORMULA: Current ratio = Current assets/current liabilities Days sales outstanding (DSO) Account Receivable(Sales+365) Inventory turnover ratio Sales/Inventories Total debt to assets- Total debt/Total assets Return on assets (ROA) Net income/Total assets Return on equity (ROE) Net income/Total equity