EBK ACCOUNTING PRINCIPLES
13th Edition
ISBN: 9781119411017
Author: Weygandt
Publisher: WILEY
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As a financial analyst of Bintang Bulan Berhad, you are required to analyse the company's
financial performance. The financial statements of the company are as follows:
BINTANG BULAN BERHAD
STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022 (RM)
Cash
Account Receivable
Inventory
Prepaid expenses
Net buildings and equipment
TOTAL ASSETS
Depreciation
48,500 Account Payable
Notes Payable
64,000
Operating profit
Less: Interest
Profit before tax
Less: Tax
PROFIT AFTER TAX
56,000
21,000
2,500,500
Revenue
Less: Cost of goods sold
Gross profit
Less: Selling and administrative expenses
Current Ratio
Quick Ratio
Debt Ratio
Time Interest Earned
Accruals
Long-term debt
Bond
Preferred share
Common share
Retained earnings
2,690,000 TOTAL CLAIMS
BINTANG BULAN BERHAD
STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED 31 DECEMBER 2022
INDUSTRY AVERAGE RATIOS
2.10 times Average Collection Period
1.30 times
Inventory Turnover
Net Profit Margin
30 percent
6.5 times
Return on Assets
38,000
24,000
20,000…
Alex is currently considering to invest his money in one of the companies betweenCompany A and Company B. The summarized final accounts of the companies for theirlast completed financial year are as follows: (refer to the images)
Required:a. Calculate the following ratios for Company A and Company B. State clearly theformulae used for each ratio:i. Gross Profit Marginii. Net Profit Marginiii. Inventory Turnover Period (days)iv. Receivables Collection Period (days)v. Payables Payment Period (days)vi. Current Ratiovii. Quick Ratiob. Comment on each of the ratios calculated in part (a) above.
Please type the answer with good explanation
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