The following information is taken from Tanaka Bhd for the year ended 31 December 2020. Preference dividend declared and fully paid in 2020: RM100,000 Ordinary dividend declared and fully paid in 2020: RM3,960,000 Preference share marketable price per unit at 31 December 2020: RM4.60 Ordinary share marketable price per unit at 31 December 2020: RM9.00 Industry average ratio i. Current ratio 2.3 : 1 ii. Quick ratio 1.1 : 1 iii. Asset turnover 2.0 iv. Profit margin 4.0% v. Earnings per share RM0.46 vi. Rate of return on total assets 11.0% Assumption: all sales in credit; finance expense means interest; ordinary share outstanding throughout both years = 10,000,000 shares. From the industry average, identify and comment on Tanaka Bhd’s profitability and shortterm liquidity.
The following information is taken from Tanaka Bhd for the year ended 31 December
2020.
Preference dividend declared and fully paid in 2020: RM100,000
Ordinary dividend declared and fully paid in 2020: RM3,960,000
Ordinary share marketable price per unit at 31 December 2020: RM9.00
Industry average ratio
i.
ii. Quick ratio 1.1 : 1
iii. Asset turnover 2.0
iv. Profit margin 4.0%
v. Earnings per share RM0.46
vi.
Assumption: all sales in credit; finance expense means interest; ordinary share outstanding
throughout both years = 10,000,000 shares.
From the industry average, identify and comment on Tanaka Bhd’s profitability and shortterm liquidity.
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