Question 4 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...

Question 4

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 shares marketable price per unit at 31 December 2020: RM4.60


• Ordinary share marketable price per unit at 31 December 2020: RM9.00

Required:

1. Calculate the following ratio for 2020: Industry average ratio

• Current ratio 2.3:1


• Quick ratio 1.1:1


• Asset turnover 2.0


• Profit margin 4.0%


• Earnings per share RM0.46


• 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.

Extracted text: Tanaka Bhd Statement of Comprehensive Income for the year ended 31 December 2020 Sales Less: Cost os sales Gross profit Less: Expenses Marketing expenses Administration expenses Finance expenses Operating profit before tax RM'000 100,000 -65000 35,000 13,000 9,200 2,880 25,080 9.92 Taxation Operating profit after tax -3.472 6,448


Extracted text: Tanaka Bhd Statement of Financial Position as at 31 December 2020 2019 Non-current assets Furniture (Net book value) Current assets Cash at Bank MYR'000 MYR'000 31,840 29,200 Inventory Accounts receivable Quoted shares 2,448 13,000 7,600 3,520 13,200 7,000 600 500 23,648 24,300 Current liabilities Accounts payable Accruals 10,400 10,920 300 500 11,420 10,700 12,948 Working capital Non-current liabilities Long term loan Net assets 12,800 18,400 18,000 26,388 24,000 Shareholder's equity 14.4 million ordinary shares 500,000 (9%) Preference share Retained profits 14,400 1,000 10,988 14,400 1,000 8,600 26,388 24,000