QUESTION - The financial information for two competitors, JibraiI Bhd and Mikail Bhd, as at 31 December 2015 and 2016 appear as below.
|
Jibrail Bhd
|
Mikail Bhd
|
|
2016 (RM)
|
2015 (RM)
|
2016 (RM)
|
2015(RM)
|
|
Net sales
|
1,549,035
|
1,350,000
|
339,038
|
325,000
|
|
Cost of goods sold
|
1,080,490
|
979,890
|
236,006
|
242,000
|
|
Operating expenses
|
302,275
|
300,110
|
79,000
|
73,450
|
|
Interest expense
|
6,800
|
8,132
|
1,252
|
1,050
|
|
Income tax expense
|
51,030
|
49,000
|
6,650
|
7,000
|
|
Current assets
|
325,975
|
312,410
|
83,336
|
79,467
|
|
Fixed assets (net)
|
521,310
|
500,000
|
139,728
|
125,812
|
|
Current I i abi I iti es
|
66,325
|
75,815
|
35,348
|
30,281
|
|
Long-term liabilities
|
108,500
|
90,000
|
29,620
|
25,000
|
|
Common stock, RM 1 par
|
500,000
|
500,000
|
120,000
|
120,000
|
|
Retained earnings
|
172,460
|
146,595
|
38,096
|
29,998
|
REQUIRED:
(a) Prepare a vertical analysis of income statement data for the year 2016 for Jibrail Bhd and Mikail Bhd.
(b) Compute the fol I owi ng ratios for 2016 for both companies:
(i) Return on assets
(ii) Ratio of liabilities to stockholders' equities
(iii) Current ratio
(iv) Asset turnover
Write the correct formula for the above ratios.
(c) Give your comments for both companies based on each ratio computed in (b).