Using the income statements and balance sheet above, conduct the financial ratio analysis of the company over the two years based on the table provided. Based on these ratios, comment on the financial performance and position of the company. Show all formulas and calculations for each of the ratios.

Majujaya Berhad Income Statements For the Year Ended December 31, 2020 and 2019 2020 2019 Net sales 600,000 575,000 Cost of goods sold 500,000 460,000 Gross margin 100,000 115,000 Expenses Selling and Administrative expenses 66,000 60,000 Interest expense 4,000 3,000 Total expenses 70,000 63,000 Income before taxes 30,000 52,000 Income taxes (40%) (rounded to next highest) 12,000 21,000 Net income Number of shares outstanding 1st quarter 8,000 8,000 2nd quarter 12,000 10,000 3rd quarter 10,000 12,000 4th quarter 10,000 10,000 Weighted average outstanding shares Earnings per share: Basic Diluted Majujaya Berhad Balance Sheets December 31, 2020 and 2019 2020 2019 11,000 92,000 103,000 6,000 212,000 13,000 77,000 92,000 5,000 187,000 Assets Current assets: Cash Accounts receivable (net) Inventory Prepaid expenses Total current assets Property, plant, and equipment Land and building Machinery and equipment Total property, plant, and equipment Less: Accumulated depreciation Net property, plant, and equipment Other assets Total assets Liabilities and stockholders' equity Current liabilities: Accounts payable Notes payable Dividend payable Income taxes payable Total current liabilities Long-term debt Total liabilites Stockholders' equity: Common stock (RM1 par) Paid-in capital in execess of par Retained earnings Total stockholders' equity 61,000 172,000 233,000 113,000 120,000 8,000 340,000 59,000 156,000 215,000 102,000 113,000 7,000 307,000 66,000 55,000 23,000 2,000 3,000 71,000 75,000 146,000 5,000 83,000 42,000 125,000 10,000 16,000 168,000 194,000 10,000 16,000 156,000 182,000 6,000 14.50 Additional information: Dividiends declared in 2020 Market price per share, December 31, 2020 (RM) Cash flow information: Cash flow from operations for 2020 (RM) Cash paid for capital expenditures for 2020 (RM) 11,000 19,000 2019 2020 Area Sub Area Ratio types Formula Ratio Ratio Current ratio Current Assets Current Liabilities Current Assets - Inventory - Prepaid Quick Ratio Acid Test Short Run expenses/ Current Liabilities Solvency (Cash + Cash Equivalents + Marketable Cash Flow Liquidity Ratio Securities + Cash Flow From Operating Activities) / Current Liabilities Average Collection Period Net account receivale/ Average daily sales Days Inventory Held Inventory / Average daily cost of sales Liquidity of Current Assets Days Payable Outstanding Acccounts Payable / Average daily cost Liquidity of sales Cash Conversion Cycle Collection period + Inventory days Payables day Debt Ratio Total liabilities/Total assets Total liabilities/Shareholder's equity Debt Equity Amount of debt Long Term Debt / Total Capitalization Long term debt / Long term debt + Equity Time Interest Eamed Operating profit / Interest expense Cash Interest Coverage Cash flow from operating activities + Interest + Taxes / Interest Leverage Coverage of Fixed Charge Coverage Debt EBIT + Interest expense, lease expense and other fixed charges / Interest expense, lease expense & other fixed charges Cash Flow Adequacy Cash flow from Operating activities/ PPE + Goodwill + Total debt + Dividend paid Financial Leverage Total debt / Total Stockholder's Equity Inventory tumover COGS Inventory Account Receivable Tumover Net credit sales / Net accounts receivable Operating Efficiency Asset Management Account Payable Tumover COGS /Accounts payable Fixed Asset Tumover Sales / Net property.plant and Equipment Total Asset Tumover Sales/Total Retum on Total Assets Net income Total assets Gross Margin Ratio Gross profit/Sales Operating Profit Margin Operating in come / Sales Net Profit Margin Net in come/Sales Cash Flow Margin Cash flow from operating activities / Net sales Return on Total Assets Net income / Total assets Return on Equity (ROE) Net income / Stockholders' equity Cash Retum on Assets Cash flow from operation / Total assets Margins Profitability Profitability Returns