QUESTION 4 The management of Berjaya Enterprise will discuss its financial position during the 5th annual meeting. As an assistant accountant of the company, you have been asked to do a financial analysis based on the following summarized income statement and balance sheet as at 30 April 2019. Berjaya Enterprise Income Statement for the year ended 30 April 2019 RM RM RM Sales 120,000 Less: Return inwards (20,000) 100,000 Less: Cost of goods sold Opening inventory 10,000 Add: Purchases 50,000 Carriage inwards 5,000 Duty on purchases 2,500 Less: Drawings 57,500 (1,500) 56,000 66,000 Less: Closing inventory (16,000) 50,000 Gross profit 50,000 Less: Expenses Selling and distribution 12,800 Administration expenses 10,200 Financial expenses 13,000 36,000 Net profit 14,000 Berjaya Enterprise Balance sheet as at 30 April 2019 Cost Accumulated (RM) depreciation (RM) 51,000 11,000 Net book value (RM) 40,000 Non-current assets Current assets Inventory Trade receivables Prepayments Bank Cash 16,000 24,000 3,000 13,000 7,000 63,000 Current liabilities Trade payables Bills payable Accruals 25,000 5,300 7,700 38,000 25,000 65,000 Financed by: Capital Add: Net profit Less: Drawings 37,000 14,000 51,000 (1,500) 49,500 15,500 65,000 Long term liability Calculate the following ratios for Berjaya Enterprise and briefly explain the results. (a) Profitability ratios () Gross profit ratio (3 marks) (ii) Net profit ratio (3 marks) (b) Liquidity ratios (i) Current ratio (3 marks) (ii) Acid-test ratio (3 marks) (c) Efficiency ratios (i) Inventory ratio (3 marks) (ii) Debtors ratio (3 marks) (d) List two external users of financial statements and their reasons for using them (7 marks). (Total: 25 marks)