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g ratios for 2020 and discuss your findings

g ratios for 2020 and discuss your findings

FINANCIAL ACCOUNTING
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 6

Please assist on sub part a, b, c

Required: Analyse Rara's financial statement. Include the following ratios for 2020 and discuss your findings (2019 values are provided for comparison): a. Current ratio (year 2019 - 0.92:1) b. Inventory turnover (year 2019 – 7.2 times) c. Debt to assets ratio (year 2019 - 82%) d. Return on assets (year 2019 - 10.8%) e. Profit margin (year 2019 – 10.0%) f. Return on common stockholders' equity (year 2019 – 56%)
Transcribed Image Text:Required: Analyse Rara's financial statement. Include the following ratios for 2020 and discuss your findings (2019 values are provided for comparison): a. Current ratio (year 2019 - 0.92:1) b. Inventory turnover (year 2019 – 7.2 times) c. Debt to assets ratio (year 2019 - 82%) d. Return on assets (year 2019 - 10.8%) e. Profit margin (year 2019 – 10.0%) f. Return on common stockholders' equity (year 2019 – 56%)
Refer to the following financial statements of Rara Sdn. Bhd. for 2020 and 2019: Rara Sdn. Bhd Balance Sheets 31st December (in millions) 2020 2019 Assets Current assets Cash RM460 RM444 Acount receivable (net) 1,188 1,190 Inventories 1,132 1,056 Other current assets 247 225 Total current assets 3,027 2,915 Property (net) Other assets 3,281 3,128 5,593 5,804 Total assets RM11,901 RM11,847 Liabilities and Stockholders' Equity Current liabilities RM3,313 RM3,184 Long-term liabilities Stockholders' equity – common Total liabilities and stockholders' equity 6,826 6,509 1,762 RM11,901 2,154 RM11,847 Rara Sdn. Bhd Income Statements For the year ended 31st December (in millions) 2020 RM13,198 7,750 2019 Net sales RM12,397 Cost of goods sold Gross profit Selling and administrative expenses Income from operations 7,108 5,289 5,448 3,299 3,472 1,976 1,990 Interest expense 233 248 Other (income) expense, net 11 Income before income taxes 1,732 1,742 Income tax expense 503 502 Net income RM1,229 RM1,240
Transcribed Image Text:Refer to the following financial statements of Rara Sdn. Bhd. for 2020 and 2019: Rara Sdn. Bhd Balance Sheets 31st December (in millions) 2020 2019 Assets Current assets Cash RM460 RM444 Acount receivable (net) 1,188 1,190 Inventories 1,132 1,056 Other current assets 247 225 Total current assets 3,027 2,915 Property (net) Other assets 3,281 3,128 5,593 5,804 Total assets RM11,901 RM11,847 Liabilities and Stockholders' Equity Current liabilities RM3,313 RM3,184 Long-term liabilities Stockholders' equity – common Total liabilities and stockholders' equity 6,826 6,509 1,762 RM11,901 2,154 RM11,847 Rara Sdn. Bhd Income Statements For the year ended 31st December (in millions) 2020 RM13,198 7,750 2019 Net sales RM12,397 Cost of goods sold Gross profit Selling and administrative expenses Income from operations 7,108 5,289 5,448 3,299 3,472 1,976 1,990 Interest expense 233 248 Other (income) expense, net 11 Income before income taxes 1,732 1,742 Income tax expense 503 502 Net income RM1,229 RM1,240
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