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The financial manager Katrina Sdn Bhd, a manufacturing firm, has decided to seek a line of credit from the Alliance Bank. This additional source of
The financial manager Katrina Sdn Bhd, a manufacturing firm, has decided to seek a line of credit from the Alliance Bank. This additional source of funds is needed to support a large portion of the firm's accounts payable during the next three months, which are the firm's peak seasonal sales period. The firm's most recent financial statements were presented to the bank in support of its loan request.
Katrina Sdn Bhd | ||
Income Statement for the Year ended 31 December 2019 | ||
RM | RM | |
Sales (all credit) | 2,400,000 | |
Less : Cost of goods sold | 1,840,000 | |
Gross profits | 560,00 | |
Less : Operating expenses: | ||
General and administrative | 120,000 | |
Depreciation expense | 120,000 | 240,000 |
Operating profits | 320,000 | |
Less : Interest expense | 40,000 | |
Before-tax profits | 280,000 | |
Less : Taxes | 84,000 | |
After-tax profits | 196,000 |
Katrina Sdn Bhd | ||
Balance Sheet as at 31 December 2019 | ||
RM | RM | |
Cash | 56,000 | |
Marketable securities | 24,800 | |
Accounts receivable | 132,000 | |
Inventories | 336,000 | |
Total current assets | 548,800 | |
Net fixed assets | 1,080,000 | |
Total Assets | 1,628,800 | |
Accounts payable | 228,000 | |
Notes payable | 52,000 | |
Other current payable | 20,000 | |
Total current liabilities | 300,000 | |
Long -termdebt | 600,000 | |
Total L..s@RM0.50par | 500,000 | |
Retained earnings | 228,800 | |
Total liabilities and shareholders' equity | 1,628,800 |
The average industry rations are provided below to facilitate an analysis of the firm's loan request:
- Current ratio
- Quick ratio
- Inventory turnover ratio
- Average age of Inventory
- Average collection period
- Average Payment Period
- Total assets turnover
- Debt ratio
- Times interest earned
- Gross profit margin
- Operating profit margin
- Net Profit Margin
- Return on assets
- Return on equity
- Cash Conversion Cycle
Required:
Compute the above ratios for Katrina Sdn Bhd 2019.
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Financial Ratio Analysis for Katrina Sdn Bhd 2019 Liquidity Ratios Current Ratio Current Assets Current Liabilities 548800 RM 300000 RM 183 Quick Ratio Current Assets Inventory Current Liabilities 548...Get Instant Access to Expert-Tailored Solutions
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