EBBM SEM 1, 2012/2013

FIN 4150 FINANCIAL STATEMENT ANALYSIS

FINANCIAL STATEMENTS ANALYSIS (FIN 4150) INDIVIDUAL ASSIGNMENT 1 Below are balance sheet, income statement, historical ratios and industry averages for Kertas Company for the year ended December 31, 2010. Income Statement Kertas Company For the Year Ended December 31, 2010 (RM) Sales Revenue Less : Cost of Goods Sold Gross Profits Less : Operating Expenses Operating Profits Less : Interest Expense Net Profits Before Taxes Less : Taxes (40%) Net Profits After Taxes

2,080,976 1,701,000 379,976 273,846 106,130 19,296 86,834 34,810 52,024

Balance Sheet Kertas Company For the Year Ended December 31, 2010 (RM) Assets Cash Accounts Receivables Inventories Total Current Assets Gross Fixed Assets Less : Accumulated Depreciation Net Fixed Assets Total Assets Liabilities and Stockholders Equity Current Liabilities Accounts Payable Notes Payable Accruals Total Current Liabilities Long-term Debt Total Liabilities Stockholders Equity Common Stock Retained Earnings Total Stockholders Equity Total Liabilities and Stockholders Equity 95,000 237,000 243,000 575,000 500,000 75,000 425,000 1,000,000

89,000 169,000 87,000 345,000 188,000 533,000 255,000 212,000 467,000 1,000,000

MOHD MAHYUDDIN BIN ABDUL RAHIM |DL 0913287

EBBM SEM 1, 2012/2013

FIN 4150 FINANCIAL STATEMENT ANALYSIS

Historical and Industry Average Ratios Kertas Company Ratio 2008 2009 2010 Current Ratio 1.6 1.7 1.67 Asid Test (Quick) Ratio 0.9 1.0 0.96 Inventory Turnover 8.1 9.3 7 Average Collection Period 33 days 37 days 41.57days Total Asset Turnover 2.3 2.2 2.08 Debt Ratio 60% 56% 53.3% Times Interest Earned 2.5 3.5 5.5 Gross Profit Margin 21% 19.7% 18.26% Operating Profit Margin 4.7% 4.8% 5.1% Net Profit Margin 1.8% 1.6% 2.49% Return on Total Assets 4.1% 3.5% 6.36% Return on Equity 10.3% 7.9% 11.14% (a)

Industry 2010 1.6 0.9 8.4 39 days 2.2 58% 2.3 20.4% 4.7% 1.4% 3.08% 7.3%

Calculate all financial ratios for year 2010 and show your calculation. [ 18 marks ] SOLUTION: LIQUIDITY

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MOHD MAHYUDDIN BIN ABDUL RAHIM |DL 0913287

EBBM SEM 1, 2012/2013

FIN 4150 FINANCIAL STATEMENT ANALYSIS

CAPITAL STRUCTURE AND SOLVENCY

OPERATING PERFORMANCE

MOHD MAHYUDDIN BIN ABDUL RAHIM |DL 0913287

EBBM SEM 1, 2012/2013

FIN 4150 FINANCIAL STATEMENT ANALYSIS

RETURN ON INVESTMENT ( ( ) )

ASSET UTILIZATION

MOHD MAHYUDDIN BIN ABDUL RAHIM |DL 0913287