WA BKAR1013 - FSA.docx - Word (Product Activation Failed) X FILE HOME INSERT DESIGN PAGE LAYOUT REFERENCES MAILINGS REVIEW VIEW Sign in Times New Ro - 12 - P A A A Aa- E E ALT % Cut Copy Format Painter Ez M Find - aac Replace Select- Paste BIU - abe x, x A aly - A 1 Normal 11 No Spac... Heading 1 Heading 2 Title Subtitle Subtle Em... Emphasis Clipboard Font Editing Paragraph 11:12:13 4.1 Styles 11 | 12 | 13 | 14 | 15 L 12:1:1:1 5 16 17 18 19 | 10 | 17 18 QUESTION 3 A) LIQUIDITY RATIOS Performance company for Kellington Group Berhad in 2019 is better than 2018 based on current ratio. In 2019 the company ability to pay off short term debt obligation is more effective than 2018 because in 2019 the current asset is increase from RM212.452.000(2018) to RM 239,437,000(2019) and also the current liability is decrease from RM 125,663,000(2018) to RM 121,557,000(2019). Beside that, the ratio in 2019 is higher than 2018 which is 1.97 times and its show that the company can converted more asset into cash and pay off the debt within the year and also it show the company financial is more stable in 2019. Based on the receivable turnover, company performance in 2019 is better than 2018 because in 2019 the company take 83 days to collect the their account receivable while in 2018 the company takes 90 days to collect their account receivable. When the company take the long PAGE 11 OF 13 2537 WORDS ENGLISH (MALAYSIA) + 100% DOC Es P9 W autocount 2:53 PM 15/1/2021 W] 0 0 - X BKAR1013 - FSA.docx - Word (Product Activation Failed) MAILINGS REVIEW VIEW FILE HOME INSERT DESIGN PAGE LAYOUT REFERENCES Sign in Cut Times New Ro - 12 - P A Aa- AL 1 Ee Copy | 1 Normal 11 No Spac... Heading 1 Heading 2 Subtle Em... Emphasis M Find - aac Replace Select- Paste B T abe X x A aby-A ES TE Title Subtitle Format Painter Clipboard Font Editing L 2.1.1 11 14 15 17 18 Paragraph Styles 1:12 3 4 7 10 12 13 Time to collect the money owed by customer it snow that company nave tne slow collection process. Since the day in 2019 take less days than 2018, it show that the company have a good collection process, good credit policies and the company have the quality customers that pay their debts quickly. B) PROFITABILITY RATIOS In 2019 the company Kellington Group Berhad have better performance than 2018 in efficiency using their asset to produce sales. It is because the ratio in 2019 is more than high in 2018 which 1.39 and 1.28(2018) and it show the company use more efficiency of their assets and show the company have a good production capacity, good collection methods, and good inventory management. Performance in 2019 also can gives the investors and creditors an idea of how a company is managed and uses its assets to produce products and sales because sometime investors also want to see how company use more specific assets like fixed assets and current assets. The ratio in 2018 is lower than 2019 it is mean the company is not using their assets efficiency and most likely have management problem. Return on Asset is best to compare company performance. Performance company in 2019 have the better efficienct a company's management is at using their assets to generate profit than year 2018. It is because the ratio in 2019 is higher than the ratio in 2018 which are 8.75% and 6.70% and it show that higher ratio indicates more asset effieciency. From the ratio we can see PAGE 12 OF 13 2537 WORDS DE ENGLISH (MALAYSIA) 100% E's G P autocount 2:53 PM 15/1/2021 W] 0 0 - X BKAR1013 - FSA.docx - Word (Product Activation Failed) MAILINGS REVIEW VIEW FILE HOME INSERT DESIGN PAGE LAYOUT REFERENCES Sign in Cut Times New Ro - 12 - AM Aa- ALT Ee Copy AaBbccdc Aabbccdc AaBbc Aabbccc AaB Aabbccc AaBbccd AaBbccde 1 Normal 1 No Spac... Heading 1 Heading 2 Subtle Em... Emphasis M Find - aac Replace Select- Paste B T abe X x A-aly - A TE Title Subtitle Format Painter Clipboard Font Editing Paragraph Styles 11 12 13 4: 1:51.61:7:18:19:10 | 11 | 12 | 13 | 14 | 15 IA! 17 18 L 12:1:1:1 that in year 2019 company has invest in asset generates 8.75 cents of net income while year 2018 is 6.70 cents. So the year 2019 performance is better at converting its investment into profits, compared with year 2018. The conclusion is company doing a good job of increasing their profits with each investment it spend better than last year. C) SOLVENCY RATIO The performance Kellington Group Berhad based on ratio Debt Total Asset is more risk in year 2019 than in year 2018 because the ratio in 2019 is 12.77% higher than in 2018 which is 7.03%. So it show that company performance in 2019 is not quite good because they must to pay greater amount of percentage of their profit in principle and interest payment meanwhile in. year 2018 the company with the less risk show that they could pay off their debt by selling its assets if it needed to and that's why the lower is always better. In year 2018 show that company is more solvent than year 2019 that the company have enough cash to meet their current obligations and successful enough to pay a return on their investment and from the perspective PAGE 12 OF 13 2537 WORDS DE ENGLISH (MALAYSIA) 100% Es P autocount 2:54 PM 15/1/2021 W] 0 0 - X BKAR1013 - FSA.docx - Word (Product Activation Failed) MAILINGS REVIEW VIEW FILE HOME INSERT DESIGN PAGE LAYOUT REFERENCES Sign in * Cut Times New Ro - 12 - A K ALT Le Copy AaBbccdc AabbccDc AaBbc Aabbcc AaB AaBbccc AaBbccde AaBbccde 1 Normal 1 No Spac... Heading 1 Heading 2 Subtle Em... Emphasis M Find - aac Replace Select- Paste B T abe X x A aby-A === Title Subtitle Format Painter Clipboard Font Styles Editing Paragraph 11:12:13 4:15:16 17:18:19: 10 | 11 | 12 | 13 | 14 12:1:1 151 17 18 13:1121111:1. F of creditor the company have more ability to be repaid their existing debt and the creditor will think that whether they need to give additional loans will be extended to the Kellington Group Berhad in future. QUESTION 4 Liquidity ratio are used to determine a debtor's ability to pay off current debt obligations. Obviously, we can see that in 2018 and 2019. Kellington Group Berhad can still manage to bear the burden of liabilities and keep increasing between 2018 and 2019 which can be seen in current ratio and this shows the company has two times more current assets than liabilities to cover its debt. Moreover, the company also shows a good sign in collecting debt from the customer which can be seen at receivable turnover during 2018 and keep increasing in 2019. 113., 12., 11., 10:19 Next, profitability ratio are used to assess a business's ability to generate income relative to its revenue, operating cost, balance sheet assets or shareholder's equity. We can see that between 2018 and 2019. Kellington Group Berhad shows an increase in asset turnover which shows that the company's ability to generate revenue from its asset is increasing too. Furthermore, we can see that the profitability of company's asset keeps on increasing between 2018 and 2019 which can be seen in return of asset. PAGE 13 OF 13 2537 WORDS DE ENGLISH (MALAYSIA) 100% E's P autocount 2:54 PM 15/1/2021 WHOD BKAR1013 - FSA.docx - Word (Product Activation Failed) - X FILE HOME INSERT DESIGN PAGE LAYOUT REFERENCES MAILINGS REVIEW VIEW Sign in Times New Ro - 12 - A A A A Aa- SALI EE % Cut Copy Format Painter Clipboard AaBbccdc Aabbccdc AaBbc Aabbccc AaB Aabbccc AaBbccd AaBbccde 1 No Spac... Heading 1 Heading 2 Subtle Em... Emphasis M Find - aac Replace Select- Paste BIU - abe x, x A aly - A 1 Normal Title Subtitle Font Editing Paragraph 1.121 2: 3 5 5 16 17 18 19 | 10 | can be seen in return of asset. Styles 11 | 12 | 13 | 14 141 15 2:11: 17 18 Lastly, solvency ratio are used to measure an enterprise's ability to meet its long-term debt obligation and often used by prospective business lenders. Kellington Group Berhad shows an increase between 2018 and 2019 in calculation for debt to total asset which means that the company own more liabilities than it does assets. This also shows that the company is extremely leveraged and highly risky to invest in or lend to. 9 27:26.25.1.241:23:221:21.1.20.1.19.1.18 17:161.15.1. 141 PAGE 13 OF 13 2537 WORDS ENGLISH (MALAYSIA) + 100% DOC E's P9 W autocount 2:54 PM 15/1/2021 w] O D Assignment_Financial Statement Analysis-A201.docx - Word (Product Activation Failed) ? X FILE HOME INSERT DESIGN PAGE LAYOUT REFERENCES MAILINGS REVIEW VIEW Sign in Times New Ro - 12 - A A A A Aa- ET ALI % Cut BB Copy Format Painter . 11 No Spac... Heading 1 Heading 2 Emphasis Find - aac Replace Select Paste BIU - abe x, x A aly - A TE 1 Normal Title Subtitle Subtle Em... Clipboard Font Editing Paragraph 5:16 Styles 12 L 2 1 1 2 1 3 1 4 7 1 89 1 10. 11 13 1 14 15 17 : 18 'A 5. Based on the opinion/assessment that you have provided in question 4, suggest and explain TWO (2) ways to improve the current condition of the company. N 23 Note: You may refer to the power point slides provided by your lecturer or any references such as text books, any book of financial statement analysis, investment/accounting webpage for the formula of each ratio and on how to interpret the result of each ratio. 24 27 126 125 PAGE 1 OF 2 342 WORDS DE ( ENGLISH (UNITED STATES) + 170% DOS G W autocount 3:02 PM 15/1/2021