QUESTION 1- Analysis of Financial Statement and Cash Flow The balance shect and income statement for the Changlun Company are as folow: Balance Sheet (RM'000) RM Cash Account receivable 500 2,000 1,000 3,500 4,500 8,000 1,100 600 Inventories Current assets Net fixed assets Total assets Account payabk Accrued expenses Shorts-term notes payable Current liabilities Long-term debt Owners' equity Total kabilities and owner's equity 300 2,000 2,000 4,000 8,000 Income Statement (RM'000) RM Net sales (all credir) Cost of good sold Gross profit Operating espenses Operating income Interest expenses Earning before taxes Income taxes (40%) 8,000 (3300) 4,700 (300) 1,700 (367) (1,333) (533) Net income 800 'Incdudes deprciation espenu of RM500 for the yoar Calculate the following ratios: Current ratio Time interest carned Debt Ratio Average collection period Fixed assets turnover Gross profit margin Retun on oquity Inventory turnover Total asset turnover Operating profit margin Operating income retun on investment

Q: How are the ratios useful?

A: Answer: Ratio analysis is allowing a comparison two firm’s annual financial statement using certain…

Q: What is an acceptable current ratio?

A: Definition: Ratio analysis: It is the financial analysis tool for measuring the profitability,…

Q: Describe the three-step process for estimating WACC.

A:

Q: two terminal valuation methods used in DCF valuations, and give the formulas for each.

A: Terminal value is the value of an asset, a business, or a project beyond the expected period when…

Q: What is one interpretation of a high P/E ratio?

A: Price to earnings ratio (P/E ratio) states the relationship of the earnings with price of that…

Q: List and briefly explain the  quantitative and qualitative  factors consider for ratio  analysis

A: Ratio analysis is a quantitative method of observing a company's liquidity, operational efficiency,…

Q: Describe the three groups of units that must be accounted for when using the FIFO method.

A:

Q: How do i find the cm per unit

A: Formula: Contribution margin per unit = Sales price - variable cost per unit. Deduction of variable…

Q: Identify four ratios or other analytical tools used to evaluateprofitability. Explain briefly how…

A: Definition:

Q: How do we calculate the quick ratio?

A: Quick ratio: Categorized under liquidity ratio  Quick ratio which helps company to know the it's…

Q: What is the uniform-series compound-amount factor?

A: The future value means the value of the invested amount in future present date. The future value is…

Q: Identify major analytic ratios and describe their calculation

A: Accounting ratios are used by the company in checking the profitability, solvency, credit worthiness…

Q: Define binomial lattice

A: A binomial is a polynomial that includes the addition of two terms of the monomial.

Q: Giving two circumstances in which Gaining ratio may be applied.

A:

Q: Explain gaining ratio

A: Introduction:- Gaining ratio may be defined as Gaining ratio is a type of financial tool, which…

Q: Define efficiency ratios

A: Efficiency Ratios : These ratios are employed to evaluate the efficiency with which the firm manages…

Q: What is current ratio

A:

Q: Define the Sortino ratio and explain its advantage

A: Ratio analysis is referred to as the quantitative method for gaining an insight with relate to the…

Q: how did you find the margin ratio?

A: A margin ratio is a financial metric that measures the % of profit generated from an entity's…

Q: differentiate and give illustrations of the difference between FIFO and Weighted Average.

A: Inventory Valuation - There are three method using which company can value their inventory a. FIFO…

Q: Explain four aspects of rate-of-return analysis?

A: The return of return is the return on investment made when the time value cashflows turns to net…

Q: an you describe with examples of the advantages and disadvantages of ratio analysis?

A: Ratio Analysis: Ratio analysis is a financial metric used by financial managers for analyzing and…

Q: Choose a financial ratio, describe what financial statement each variable in the ratio comes from,…

A: A financial ratio is a quantitative measure used to analyze and assess various aspects of a…

Q: What is the relationship between the B/C ratio and the PW criterion?

A: The question is based on the concept of benefit to cost ratio analysis and present worth criteria…

Q: How does the computation of equivalent units under the FIFO method differ from thecomputation of…

A: Equivalents units for production: The activity of a processing department in terms of fully…

Q: Define the term dual rate method.

A: Dual-rate method refers to the method of assigning costs that uses two cost functions.