a) Compute the above indicated ratios for DEL Bhd.b) Evaluate the overall performance of the company as compared to the industry average ratios. Below are the financial statementsfor DEL Bhd. for year of 2018.DEL Bhd.Balance Sheet As Al 31 December 2018 (RMO0)2400 Account payatle600 Nates payabie20.000 Acerued expenses6.0004.8007,200CashMartetatie securtiesAccount recelvables24.000600 MortgageTerm LoanInventoriesPrepaid expenses12.5008.800Piant and equipment29.0004.200(14.400) Common sharesRetained eamingsAccumulated depreciation16.400TOTAL ASSETSTOTAL LIABILITIESAEQUITY62,00062,000DEL Bhd.Income StutomentFor The Year Ended 31 December 2018 (RMU00)Net Sales102.000176.000)26.000Cost of goods soldGross profitOperating expensesNet operating incomeinterest expensesEamings before tasesL18.0008,0002.002)4.00024003.600Income taxesEARNINGS AFTER TAXESIndustry Average RatiosCurent ratioQuick ratioDebt ratioTime interest earmed2.55 x Inventory turnover1.70 x Average collection period70% Net profit margin2.5x Retum on equity3.6x63 days4.5%19.5%

Ratio means financial ratio or accounting ratio which is a mathematical expression of the…

Answered: a) Compute the above indicated ratios…

a) Compute the above indicated ratios for DEL Bhd. b) Evaluate the overall performance of the company as compared to the industry average ratios.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

a) Compute the above indicated ratios for DEL Bhd.

b) Evaluate the overall performance of the company as compared to the industry average ratios.

Below are the financial statements
for DEL Bhd. for year of 2018.
DEL Bhd.
Balance Sheet As Al 31 December 2018 (RMO0)
2400 Account payatle
600 Nates payabie
20.000 Acerued expenses
6.000
4.800
7,200
Cash
Martetatie securties
Account recelvables
24.000
600 Mortgage
Term Loan
Inventories
Prepaid expenses
12.500
8.800
Piant and equipment
29.000
4.200
(14.400) Common shares
Retained eamings
Accumulated depreciation
16.400
TOTAL ASSETS
TOTAL LIABILITIES
AEQUITY
62,000
62,000
DEL Bhd.
Income Stutoment
For The Year Ended 31 December 2018 (RMU00)
Net Sales
102.000
176.000)
26.000
Cost of goods sold
Gross profit
Operating expenses
Net operating income
interest expenses
Eamings before tases
L18.000
8,000
2.002)
4.000
2400
3.600
Income taxes
EARNINGS AFTER TAXES
Industry Average Ratios
Curent ratio
Quick ratio
Debt ratio
Time interest earmed
2.55 x Inventory turnover
1.70 x Average collection period
70% Net profit margin
2.5x Retum on equity
3.6x
63 days
4.5%
19.5%

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