Required:

1. Compute the ratios for 2019 and 2020. Analyse the ratios as the above between these 2 years.
2. Analyse the ratios as the above between 2020 and the industry.
3. Comment the performance of the firm in terms of liquidity, efficiency, debt and profitability of the firm as a whole.
4. Give THREE (3) suggestions on how to improve on the profitability.

Question 2 You have just been appointed as the financial manager of Energy-X Bhd. Your first task is to assess the efficiency and the leverage situation of the firm and hoe it affects the profitability of the firm. The financial records of the past two years had been compiled for the analysis as given 1 Energy-x Balance Sheet (RM millions) as at December 31, 2019 and 2020 below: 2019 2020 9 Assets Cash Accounts receivable Inventory Net fixed assets Total Assets 107 198 550 864 11 139 291 625 1066 Liabilities & Equities Accounts payable Long-term debt Common equity Total liabilities and equity 88 353 423 864 101 488 477 1066 Energy-X Income Statement (RM million) as at December 31, 2019 and 2020 2019 2020 Sales COGS Gross profit Operating expenses Operating profit Interest expense Taxes Net profit 1100 792 308 176 132 52 32 48 1250 875 375 212 163 73 36 54 Industry Averages Current ratio 2.5 times Day sales outstanding 33 days Inventory turnover 5 times Debt ratio 50% Times interest earned 2.5 times Net profit margin 7% Return on assets 10% Return on equity 16%