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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

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

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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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 1,132 247 1,056 225 Other current assets 2,915 3,128 5,804 RM11.847 Total current assets 3,027 3,281 5.593 RM11,901 Property (net) Other assets Total assets Liabilities and Stockholders' Equity RM3,313 6,826 RM3,184 6,509 Current liabilities Long-term liabilities Stockholders' equity - common 2.154 RM11.847 1.762 Total liabilities and stockholders' equity RM11,901 Rara Sdn. Bhd Income Statements For the year ended 31st December (in millions) 2020 2019 Net sales RM13,198 RM12,397 Cost of goods sold Gross profit 7.750 5,448 7.108 5,289 3.299 1,990 Selling and administrative expenses Income from operations Interest expense Other (income) expense, net 3.472 1,976 233 248 11 1,732 Income before income taxes 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 1,132 247 1,056 225 Other current assets 2,915 3,128 5,804 RM11.847 Total current assets 3,027 3,281 5.593 RM11,901 Property (net) Other assets Total assets Liabilities and Stockholders' Equity RM3,313 6,826 RM3,184 6,509 Current liabilities Long-term liabilities Stockholders' equity - common 2.154 RM11.847 1.762 Total liabilities and stockholders' equity RM11,901 Rara Sdn. Bhd Income Statements For the year ended 31st December (in millions) 2020 2019 Net sales RM13,198 RM12,397 Cost of goods sold Gross profit 7.750 5,448 7.108 5,289 3.299 1,990 Selling and administrative expenses Income from operations Interest expense Other (income) expense, net 3.472 1,976 233 248 11 1,732 Income before income taxes 1,742 Income tax expense 503 502 Net income RM1,229 RM1,240
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%)
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%)
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