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 share marketable price per unit at 31 December 2020: RM4.60
Ordinary share marketable price per unit at 31 December 2020: RM9.00
Required:
a. Calculate the following ratio for 2020: Industry average ratio
i. Current ratio 2.3 : 1
ii. Quick ratio 1.1 : 1
iii. Asset turnover 2.0
iv. Profit margin 4.0%
v. Earnings per share RM0.46
vi. 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.
b. From the industry average, identify and comment on Tanaka Bhd’s profitability and shortterm liquidity.
Extracted text: Tanaka Bhd Statement of Comprehensive Income for the year ended 31 December 2020 RM'000 Sales 100,000 Less: Cost of sales (65,000) 35,000 Gross profit Less: Expenses Marketing expenses Administration expenses (13,000) (9,200) (2,880) Finance expenses Operating profit before tax (25,080) 9.920 Taxation (3,472) Operating profit after tax 6,448
Extracted text: Tanaka Bhd Statement of Financial Position as at 31 December 2020 2019 Non-current assets RM'000 RM'000 Furniture (Net book value) 31,840 29,200 Current assets Cash at bank 2,448 3,520 Inventory 13,000 13,200 Accounts receivable 7,600 7,000 Quoted shares 600 500 23,648 24,220 Current liabilities Accounts payable 10,400 10,920 Accruals 300 500 10,700 11,420 12,948 Working capital Non-current liabilities 12,800 Long term loan 18,400 18,000 Net assets 26,388 24,000 Shareholder's equity 14,400 14.4 million ordinary shares 500,000 9% preference share Retained profits 14,400 1,000 1,000 10,988 8,600 26,388 24,000