1. The fixed dividend on the preference shares in Bulabi Bhd is 7%. The fixed dividend on the preference shares in Green Cable Bhd is 6%.
2. At 30 June 2020, the market value of an ordinary share in Bulabi Bhd was RM3. At 30 June 2020, the market value of ordinary share in Green Cable was RM2.

Calculate:

1- Dividend yield;

2- Dividend cover;

3- Earnings per share;

4- Price/earnings ratio;

5- Capital gearing ratio.

Question 1 Income Statement for the year ended 30th June 2020 BULABI BHD RM RM GREEN CABLE BHD RM RM Sales Cash 160,000 90,000 2,348,800 2,508,800 1,400,000 1,490,000 Credit Less Cost of sales Opening inventory 150,000 160,000 Purchases 2.220,000 1,212,000 2,370,000 1,372,000 Less Closing inventory 140,000 2,230,000 180,000 1,192,000 Gross profit Less Expenses Net Profit before Interest Interest on Debentures Net Profit before Taxation Corporation Tax Net Profit after Taxation Add Profit and Loss 278,800 25,080 253,720 35,000 218,720 54,680 164,040 5,000 169,040 298,000 14,870 283,130 6,250 276,880 69,220 207,660 6,500 214,160 Ordinary Dividend 19,500 84,000 Preference Dividend 1,050 1,200 130,000 120,000 Transfer to General reserve Unappropriated Profit 150,550 18,490 205,200 8,960 Statement of Financial Position at 30th June 2020 BULABI BERHAD RM RM GREEN CABLE BHD RM RM 1,063,760 1,017,760 Net-current assets Current assets Inventory 140,000 180,000 Trade receivables 97,000 116,000 Bank 19,960 5,870 256,960 301,870 Less Current Liabilities Account Payables 92,000 101,000 Corporation Tax 54,680 69,220 Debenture Interest Due 35,000 6,250 Ordinary Dividend Due 19,500 84,000 Preference Dividend Due 1,050 1,200 202,230 54,730 261,670 40,200 1,118,490 1,057,960 Less Long Term Liabilities 5% Debentures 700,000 125,000 418,490 932.960 Financed by: Issued Share Capital Ordinary Shares of RM1 each 130,000 700,000 145,000 20,000 720,000 Preference Shares of RM1 each 15,000 Reserves General 255,000 204,000 Profit and Loss 18,490 273,490 8,960 212,960 418,490 932,960 BULABI BERHAD (RM) GREEN CABLE BHD (RM) Capital Employed 1118490 1057960 Earnings Before Interest and Tax (EBIT) 253720 283130 Return on Capital Employed EBIT/Capital Employed EBIT/Capital Employed 253720/1118490 283130/1057960 0.23 0.27 BULABI BERHAD (RM) GREEN CABLE BHD (RM) Sales 2508800 1490000 Non Current Assets or Fixed Assets 1063760 1017760 Turnover to fixed assets Sales/ Fixed Assets Sales/ Fixed Assets 2508800/1063760 1490000/1017760 2.36 1.46 Rate of stock turnover can be Sales / Average Stock or Cost of sales / Average Stock. I had used here sales / average stock. BULABI BERHAD GREEN CABLE BHD (RM) (RM) Sales 2508800 1490000 Average Stock (150000 + 140000)/2 (160000 + 180000)/2 145000 170000 Rate of stock turnover (in times) Sales/ Average Stock Sales/ Average Stock 2508800/145000 1490000/170000 17.30 8.76 BULABI BERHAD (RM) GREEN CABLE BHD (RM) Gross Profit 278800 298000 Sales 2508800 1490000 Gross Profit Ratio Gross Profit / Sales x100 Gross Profit / Sales x100 11.11 20 BULABI BERHAD (RM) GREEN CABLE BHD (RM) Net Profit after taxes 164040 207660 Sales 2508800 1490000 Net Profit Ratio Net Profit after taxes / Sales x 100 Net Profit after taxes / Sales x 100 164040/2508800 x 100 207660/1490000 x 100 6.54 13.94