Section A: Case Analysis (40 marks) Answer ALL questions. The followings are the financial statements (statement...

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Section A: Case Analysis (40 marks) Answer ALL questions. The followings are the financial statements (statement of financial position and consolidated income statement) for Aeon Stores (Hong Kong) Co., Limited' and Lifestyle International Holdings Limited. (a) Perform vertical analysis for the two companies for the years of 2019 and 2020. (12 marks) (b) Perform ratio analysis for the two companies for the year ended 31 December 2020. The scope of analysis should include liquidity, profitability, and solvency. Please show the workings of the accounting ratios. (14 marks) (c) Recommend with reasons which company is considered to have better financial performance. (14 marks) Acon Stores (Hong Kong) Co., Limited: CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DECEMBER 2020 NOTES 2020 HK$'000 2019 HK$'000 Revenue Other income 5 7 9,961,893 583,928 9,493,774 545,918 Investment income 8 22,411 27,430 Interest income from rental deposits 10,767 10,316 Purchases of goods and changes in inventories Staff costs (7,082,877) (6,656,159) (1,061,224) (1,077,474) Depreciation of investment properties Depreciation of property, plant and equipment Depreciation of right-of-use assets Lease expenses Other expenses Pre-operating expenses Other gains and losses Interest on lease liabilities Loss before tax Income tax expense 222 21 (83,913) (85,247) 18 (204,694) (209,769) 19 (724,225) (749,094) (91,275) (84,831) 9 (1,040,881) (1,063,992) 10 (2,823) (2,694) 11 (14,581) (12,719) (292,755) (303,414) (20,240) (167,965) 22 12 (9,987) (21,032) Loss for the year 13 (30,236) (188,987) Source: https://www1.hkexnews.hk/listedco/listconews/schk/2021/0423/2021042300817.pdf Source: https://media.lifestylehk.com.hk/2021033017080276229680831_tc.pdf Section A: Case Analysis (40 marks) Answer ALL questions. The followings are the financial statements (statement of financial position and consolidated income statement) for Aeon Stores (Hong Kong) Co., Limited' and Lifestyle International Holdings Limited. (a) Perform vertical analysis for the two companies for the years of 2019 and 2020. (12 marks) (b) Perform ratio analysis for the two companies for the year ended 31 December 2020. The scope of analysis should include liquidity, profitability, and solvency. Please show the workings of the accounting ratios. (14 marks) (c) Recommend with reasons which company is considered to have better financial performance. (14 marks) Acon Stores (Hong Kong) Co., Limited: CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DECEMBER 2020 NOTES 2020 HK$'000 2019 HK$'000 Revenue Other income 5 7 9,961,893 583,928 9,493,774 545,918 Investment income 8 22,411 27,430 Interest income from rental deposits 10,767 10,316 Purchases of goods and changes in inventories Staff costs (7,082,877) (6,656,159) (1,061,224) (1,077,474) Depreciation of investment properties Depreciation of property, plant and equipment Depreciation of right-of-use assets Lease expenses Other expenses Pre-operating expenses Other gains and losses Interest on lease liabilities Loss before tax Income tax expense 222 21 (83,913) (85,247) 18 (204,694) (209,769) 19 (724,225) (749,094) (91,275) (84,831) 9 (1,040,881) (1,063,992) 10 (2,823) (2,694) 11 (14,581) (12,719) (292,755) (303,414) (20,240) (167,965) 22 12 (9,987) (21,032) Loss for the year 13 (30,236) (188,987) Source: https://www1.hkexnews.hk/listedco/listconews/schk/2021/0423/2021042300817.pdf Source: https://media.lifestylehk.com.hk/2021033017080276229680831_tc.pdf