MID TERM TEST

Faculty of Business

Course :
BBCF2013
Financial Mangement

Date : 7th March 2021

Time : 8.00 am – 10.00 am

Duration : 2 hour

Module Lecturer : Wan Md Afnan

Total marks : 50 marks (worth 20%)

Instructions to candidates:

1. Write your name and student number on the Mid Term Paper AND Answer Book.

2. Attempt ALL questions.

3. Do not detach any part of the examination paper.

4. Begin writing, as indicated, after the reading time has ended.

5. Rename your file as MT_202101_BBCF2013_YourName

Materials allowed for this examination:

1. Non – programmable Calculator.

DO NOT REMOVE ANY PART OF THIS TEST PAPER FROM THE

EXAMINATION ROOM

Student Name : ___________________________________________________

Student ID : ___________________________________________________

NRIC/Passport No : ___________________________________________________

Program : ___________________________________________________
Date : 7th March 2021 Course :BBCF2013 Financial Management

STRUCTURED QUESTIONS [TOTAL = 50 MARKS]

Answer ALL questions.

QUESTION 1 (25 MARKS)

Seri Masyhur Enterprise

Balance Sheet as at 31st December 2020

LIABILITIES &
ASSETS RM EQUITY RM

Cash 15,000 Account payable 57,000

Marketable securities 7,000 Notes payable 13,000
Account receivables 34,000 Accrued expenses 5,000
Inventories 82,000 Long-term debt 50,000
150,00 150,00
Land Building 0 Ordinary shares 0
Furniture and Fittings 63,000 Paid in capital 60,000
Office equipment 44,000 Retained earnings 73,000
Motor vehicles 82,000
Less: Depreciation 69,000

408,00 408,00
TOTAL 0 TOTAL 0

Seri Masyhur Enterprise

Income Statement for the year ended 31st December 2020
RM
Sales 770,000
Less: Cost of goods sold 462,000
Gross profit 308,000
Less: General administrative expenses 148,000
Depreciation 18,900 166,900
Earnings before interest & taxes 141,100
Less: Interest expenses 12,000
Earnings before taxes 129,100
Less: Taxes 32,000
Earnings after taxes 97,100

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 Date : 7th March 2021 Course :BBCF2013 Financial Management

INDUSTRIAL AVERAGE
RATIOS

Current ratio 1.35 times Return on total assets 18.92%

Quick ratio 0.87 times Return on total equity 16.70%
Inventory turnover 1.55 times Debt ratio 65%
12.3
Average collection period 20 days Time interest earned times

a) Calculate the relevant ratios for Seri Masyhur Enterprise.

i) Current ratio
(2 marks)

ii) Quick ratio

(2 marks)

iii) Inventory turnover

(2 marks)

iv) Average collection period

(2 marks)

v) Return on total assets

(2 marks)

vi) Return on total equity

(2 marks)

vii) Debt ratio

(2 marks)

viii) Time interest earned

(2 marks)

b) Analyse the overall performance of the company based on liquidity, profitability,

efficiency and solvency ratios. (Note: Use the 360 days for calculation)
(9 marks)

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Date : 7th March 2021 Course :BBCF2013 Financial Management

QUESTION 2 (25 MARKS)

a) Zack & Co Bhd has issued an RM600 million bond and sukuk to fund the purchase of
mortgage loans and Islamic house financing from the financial system. The bond has a
par value RM1,000 with 5 percent coupon rate and will mature in 10 years. Dr. Siti is a
retail investor and she has decided to buy the bond.

i) Calculate the value of bond (Vb) if the required rate of return is 4 percent.
(5 marks)

ii)Determine the new value of bond (Vb) if the market rate has increased to 6 percent.
(5 marks)

iii) Find the Yield to Maturity (YTM). Use the answer in (ii) as your Present Value.
(3 marks)

iv) Calculate the Yield to Call (YTC) with the premium rate 5 percent after 7 years.
(3 marks)

b) Give TWO (2) type of bonds and explain an advantages and disadvantages for each.
(6 marks)

- END OF QUESTION-

OFFICE USE:

QUESTION MARKS
NUMBER
1
2
Total (50 marks)
Total (20%)

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