Based on the above statement: a) Calculate the indicated ratio for Maju Jaya Holdings. b) Evaluate the overall performance of the company according to liquidity, activity, profitability and leverage ratios.
Based on the above statement: a) Calculate the indicated ratio for Maju Jaya Holdings. b) Evaluate the overall performance of the company according to liquidity, activity, profitability and leverage ratios.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![4:21
Tutorial 1 Financial R...
i. Ability to meet maturing obligations
ii. Effectiveness in managing assets and efficiency in handling operations.
iii. Profitability
iv. Ability to service debts and degree of financial risk
v. Market ratio
b) Comment on the performance of liquidity, activity, profitability, leverage and
market ration for both years.
Question 2
As a finance executive of Maju Jaya holdings, you are required to evaluate the financial
performance of the company. The financial statements of the company are as follows:
Maju Holdings
Income Statement for the year ended 31 December 2020
Sales
Less: Cost of good sold
Gross profit
Less: Selling expenses
Earnings before interest and taxes
Less: Interest expense
Earnings before tax
Less: Taxes
Net income
2,450,000
858,000
1,592,000
532,000
1,060,000
64,000
996,000
232,800
763,200
Maju Jaya Holdings
Statement of Financial Position as at 31 December 2020
RM
RM
100,000
80,000
Cash
Marketable securities
Accounts receivable
Prepaid expense
Inventories
Plant and equipment (Net)
50,000
60,000
150,000
Accounts Payable
Accrued expenses
315,000
390,000
881,500
Long term debt
Common stock
Retained earnings
550,000
1,050,000
66,500
Total liabilities and 1,846,500
equity
Total assets
1,846,500
Industry Average Ratio
Current ratio
Quick ratio
Debt ratio
Times interest earned
4 times
Average collection period
2 times
45%
10.5 times Return on assets
Inventory turnover
Net profit margin
25 days
2 times
28%
39%
Based on the above statement:
a) Calculate the indicated ratio for Maju Jaya Holdings
b) Evaluate the overall performance of the company according to liquidity, activity,
profitability and leverage ratios.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa75dd5df-eda2-4f5c-9a94-6ae4f97bd525%2F83f43b03-2153-49fd-bcb2-d89b44aebeef%2Fifirt3x_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4:21
Tutorial 1 Financial R...
i. Ability to meet maturing obligations
ii. Effectiveness in managing assets and efficiency in handling operations.
iii. Profitability
iv. Ability to service debts and degree of financial risk
v. Market ratio
b) Comment on the performance of liquidity, activity, profitability, leverage and
market ration for both years.
Question 2
As a finance executive of Maju Jaya holdings, you are required to evaluate the financial
performance of the company. The financial statements of the company are as follows:
Maju Holdings
Income Statement for the year ended 31 December 2020
Sales
Less: Cost of good sold
Gross profit
Less: Selling expenses
Earnings before interest and taxes
Less: Interest expense
Earnings before tax
Less: Taxes
Net income
2,450,000
858,000
1,592,000
532,000
1,060,000
64,000
996,000
232,800
763,200
Maju Jaya Holdings
Statement of Financial Position as at 31 December 2020
RM
RM
100,000
80,000
Cash
Marketable securities
Accounts receivable
Prepaid expense
Inventories
Plant and equipment (Net)
50,000
60,000
150,000
Accounts Payable
Accrued expenses
315,000
390,000
881,500
Long term debt
Common stock
Retained earnings
550,000
1,050,000
66,500
Total liabilities and 1,846,500
equity
Total assets
1,846,500
Industry Average Ratio
Current ratio
Quick ratio
Debt ratio
Times interest earned
4 times
Average collection period
2 times
45%
10.5 times Return on assets
Inventory turnover
Net profit margin
25 days
2 times
28%
39%
Based on the above statement:
a) Calculate the indicated ratio for Maju Jaya Holdings
b) Evaluate the overall performance of the company according to liquidity, activity,
profitability and leverage ratios.
![4:21
Tutorial 1 Financial R...
Tutorial 1
Question 1
Lavender Corporation
Income Statement for the year ended 31 May
2018 (RM'000)
2019 (RM'000)
Sales
Cost of goods sold
Gross Profit
Operating Expenses
Depreciation
Operating Profit
Interest Expense
Earnings before tax
Тахes
750
260
490
100
80
310
30
280
110
1,280
300
980
300
280
400
90
310
120
190
Net Income
170
Lavender
Statement of Financial Position as at 31 May
2018 (RM'000)
2019 (RM'000)
Cash
40
50
Account Receivable
Inventory
Other Current Assets
Total Current Asset
Net Plant, Property & Equipment
80
140
20
280
320
100
160
40
350
450
Total Assets
600
800
120
Accounts payable
Salaries Payable
Other Current Liabilities
60
20
10
60
200
50
30
Total Current Liabilities
100
200
Debentures
Total Liabilities
Ordinary Shares@RM1
Retained earnings
250
300
300
350
50
150
Total liabilities & Equity
600
800
Addition information as follows:
i.
The market price for Lavender stock is RM15 and RM12 for year 2011 and
2012 respectively.
Based on the above information, you are required to:
a) Calculate any two relevant financial ratio for each of the following areas to
determine the financial performance of Lavender Corporation for the 2018
and 2019. The areas are as follows:
i. Ability to meet maturing obligations
ii.
Effectiveness in managing assets and efficiency in handling operations.
iii. Profitability
iv. Ability to service debts and degree of financial risk
v. Market ratio
b) Comment on the performance of liquidity, activity, profitability, leverage and
market ration for both years.
Question 2
As a finance executive of Maju Jaya holdings, you are required to evaluate the financial
performance of the company. The financial statements of the company are as follows:
Maju Holdings
Income Statement for the year ended 31 December 2020
Sales
Less: Cost of
Gross profit
2,450,000
858,000
1 592. 000
| ||](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa75dd5df-eda2-4f5c-9a94-6ae4f97bd525%2F83f43b03-2153-49fd-bcb2-d89b44aebeef%2Fltvwipm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4:21
Tutorial 1 Financial R...
Tutorial 1
Question 1
Lavender Corporation
Income Statement for the year ended 31 May
2018 (RM'000)
2019 (RM'000)
Sales
Cost of goods sold
Gross Profit
Operating Expenses
Depreciation
Operating Profit
Interest Expense
Earnings before tax
Тахes
750
260
490
100
80
310
30
280
110
1,280
300
980
300
280
400
90
310
120
190
Net Income
170
Lavender
Statement of Financial Position as at 31 May
2018 (RM'000)
2019 (RM'000)
Cash
40
50
Account Receivable
Inventory
Other Current Assets
Total Current Asset
Net Plant, Property & Equipment
80
140
20
280
320
100
160
40
350
450
Total Assets
600
800
120
Accounts payable
Salaries Payable
Other Current Liabilities
60
20
10
60
200
50
30
Total Current Liabilities
100
200
Debentures
Total Liabilities
Ordinary Shares@RM1
Retained earnings
250
300
300
350
50
150
Total liabilities & Equity
600
800
Addition information as follows:
i.
The market price for Lavender stock is RM15 and RM12 for year 2011 and
2012 respectively.
Based on the above information, you are required to:
a) Calculate any two relevant financial ratio for each of the following areas to
determine the financial performance of Lavender Corporation for the 2018
and 2019. The areas are as follows:
i. Ability to meet maturing obligations
ii.
Effectiveness in managing assets and efficiency in handling operations.
iii. Profitability
iv. Ability to service debts and degree of financial risk
v. Market ratio
b) Comment on the performance of liquidity, activity, profitability, leverage and
market ration for both years.
Question 2
As a finance executive of Maju Jaya holdings, you are required to evaluate the financial
performance of the company. The financial statements of the company are as follows:
Maju Holdings
Income Statement for the year ended 31 December 2020
Sales
Less: Cost of
Gross profit
2,450,000
858,000
1 592. 000
| ||
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