Question 4 The following information is taken from Tanaka Bhd for the year ended 31 December 2020. Preference dividend declared and fully paid in 2020: RM100,000 Ordinary dividend declared and fully paid in 2020: RM3,960,000 Preference share marketable price per unit at 31 December 2020: RM4.60 Ordinary share marketable price per unit at 31 December 2020: RM9.00 2019 RM'000 29.200 Tanaka Bhd Statement of Financial Position as at 31 December 2020 Non-current assets RM000 Furniture (Net book value) 31,840 Current assets Cash at bank 2.448 Inventory 13.000 Accounts receivable 7,600 Quoted shares 600 23,648 Current liabilities Accounts payable 10.400 Accruals 300 10,700 Working capital 12.948 Non-current liabilities Long term loan 18,400 Net assets 26,388 3,520 13,200 7.000 500 24,220 Tanaka Bhd Statement of Comprehensive Income for the year ended 31 December 2020 RM'000 Sales 100,000 Less: Cost of sales (65,000) Gross profit 35,000 Less: Expenses Marketing expenses (13,000) Administration expenses (9,200) Finance expenses (2.880) (25.080) Operating profit before tax 9.920 Taxation (3,472) Operating profit after tax 6.448 10,920 500 11,420 12.800 18,000 24.000 Shareholder's equity 14.4 million ordinary shares 500,000 9% preference share Retained profils 14.400 1.000 10.988 26,388 14,400 1,000 8,600 24.000 Required: a. Calculate the following ratio for 2020: Industry average ratio i. Current ratio 2.3:1 ii. Quick ratio 1.1:1 iii. Asset turnover 2.0 iv. Profit margin 4.0% v. Earnings per share RM0.46 vi. Rate of return on total assets 11.0% Assumption: all sales in credit, finance expense means interest; ordinary share outstanding throughout both years = 10,000,000 shares. (6 marks) b. From the industry average, identify and comment on Tanaka Bhd's profitability and short- term liquidity. (9 marks)