QUESTION 1

Below is the partial income statement of Kapas Berhad for the year ended 31
December 2014 and 2015.

2014 (RM) 2015 (RM)

Net sales 1,800,000 2,450,000
Gross profit 1,297,000 1,670,000
Earnings before interest and tax 902,000 1,126,000
Earnings before tax 862,000 1,064,000
Net income 646,500 798,000

Using common-size analysis, provide a brief report on the company operating

activities for the financial year ended 2015. Determine the company strengths and
weaknesses and suggest possible strategies to improve future performances.

QUESTION 2
Below are selected financial information of Smarto Bhd for the financial year ending
31 December.
2016 2015 2014
(RM million) (RM million) (RM million)
Shareholders' equity 6.73 6.08 5.18
Long Term Debt 7.25 7.1 7.85
Total Current Liabilities 9.55 9.34 10.39
Total Current Assets 8.4 8.22 9.12
Total Net Fixed Assets 13.63 12.8 12.8
Net Sales 13.5 14.7 15

a) Prepare a year-to-year comparative analysis.

(6 marks)
b) Evaluate the company’s asset utilization and the financial risk for the year
2015 and 2016. Support your evaluation with relevant financial ratios.
(4 mark)
QUESTION 3

The following Statement of Financial Performance apply to Bentayan Berhad:

Comparative Statement of Financial Performance for the years ended
December 31, (‘000)
2017 (RM) 2016 (RM) 2015 (RM)
Sales 2,900 2,700 1,800
Cost of sales 1,800 1,778 950
Gross profit 1,100 922 850
Operating expenses 680 470 330
Operating profit 420 452 520
Interest expense 250 180 72
Income before tax 170 272 448
Income taxes 48 77 125
Net income 122 195 323

Based on the above financial statement, you are required to:

a) Prepare a Trend Index Statement of Financial Performance by using 2015 as the

base year.

(4 marks)

b) From a), critically analyse the company’s performance for the past 3 years.
(6 marks)