Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

You are Chief Finance Officer of Gerbang Maju Holdings Sdn Bhd (GMHSB). GMHSB has already undertaken engineering projects exceeding RM85 Million in overall value, and

image text in transcribedimage text in transcribedimage text in transcribed You are Chief Finance Officer of Gerbang Maju Holdings Sdn Bhd (GMHSB). GMHSB has already undertaken engineering projects exceeding RM85 Million in overall value, and whilst still catering for smaller scale contracts. As the company is expanded, the management of GMHSB has decided to work in Alliance or Joint Venture with capable and like-minded companies to undertake much larger contracts. In view of this, your CEO have instructed you to evaluate the performance of Global Factor Sdn Bhd whether the company is suitable for the contract. The number of day of year is 360 days. Brief of Global Factor Sdn Bhd (GFSB) GFSB was established in 2011 by Mr Wong who is happened to be brotherin-law with one of the directors in GMHSB. The company was established with a working capital RM60 million and has increased to RM67.5 million in 2015 due to the inclusion of new shareholders in the company. Nevertheless, Mr Wong still remains as major shareholder of the company. GFSB recently has encountered slow in business due to many skilled employees left the company for its competitors. One of the reasons is that GFSB has not revising its salary scale as compared to their competitors. In view of the increase of raw material costs, GSFB has managed to secure additional suppliers due to their previous reputation in business. Thus, the opportunity to obtain a contract with GMHSB would be a giant step for the GFSB to improve its business growth. (a) You are required to perform ratio analysis on the financial performance of company based on yearly comparison. Calculate the following ratios for BOTH years. Show your workings. i. Current ratio ii. Quick ratio (or acid test) iii. Return on Assets iv. Net profit margin v. Asset turnover vi. Days in Inventory vii. Receivable turnover viii. Gearing Ratio (16 marks) (b) Using the ratio computation in part (a), analyze the performance of GFSB and provide your justification whether GMHSB should collaborate with GFSB on the project. (10 marks) (c) Briefly discuss THREE (3) possible consequences of poor decision making in organization. ( 9 marks) (d) Using the characteristic of strategic management measurements, briefly discuss how these characteristics can guarantee the success of the partnership between the GMHSB and GFSB. Statement of Financial Position as at

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions