Accounting2
(a) | | Formula | Family Store Bhd.RM ( '000) | Furniture Concept Bhd.RM ( '000) | i. | Current Ratio | Current Ratio= | = 2 x | = 2.28 x | ii. | Acid-test Ratio | Acid-Test Ratio=Current Assets - InventoryCurrent Liabilities | = 1.04 x | = 1.22 x | iii. | Inventory Turnover | Inventory Turnover== | = = = 5.67 x | = = = 6.5 x | iv. | Account Receivable Days | Account Receivable Days= | = 31 days | = 37 days |
Part A | | Formula | Family Store Bhd.RM ( '000) | Furniture Concept Bhd.RM ( '000) | v. | Asset Turnover | Asset Turnover= | = 1.30 x | = 1.00 x | vi. | Dividend Yield(in percentage) | Dividend Yield= | Preferred Stockx 100 %= 32 %Common Stockx 100%= 3.6 % | Preferred Stockx 100 %= 33 %Common Stockx 100%= 2.5 % |
| | Formula | Family Store Bhd.RM ( '000) | Furniture Concept Bhd.RM ( '000) | vii. | Earning Per Share(EPS) | Earnings Per Share= | Preferred Stock= RM 49.00per shareCommon Stock= RM 4.90per share | Preferred Stock= RM 39.83per shareCommon Stock= RM 3.98per share | viii. | Pricing Earning Ratio(P/E Ratio) | Price Earnings Ratio= | Preferred Stock=0.51 xCommon Stock= 5.10 x | Preferred Stock= 0.50 xCommon Stock= 5.03 x |
| | Formula | Family Store Bhd.RM ( '000) | Furniture Concept Bhd.RM ( '000) | ix. | Return on asset(ROA)(in percentage) | Return on asset= | x100%= 6.38 % | x100%= 7.47 % | x. | Debt to equity ratio(in percentage) | Debt to equity ratio== | x 100 %= 104.09 % | x 100%= 64.07 % | xi. | Time Interest Earned Ratio | Time Interest Earned Ratio= | = 5.95 x | = 7.19 x |
Part B (a) | | Family Store Bhd. | Furniture Concept Bhd. | Comment | i. | Current Ratio | 2x | 2.28x | Family Store Bhd. is less liquid than Furniture Concept Bhd. and it has less effort to pay off their current liabilities. This may due to Family Store Bhd. has too many inventories compare to Furniture Concept Bhd. | ii. | Acid-Test Ratio | 1.04x | 1.22x | Family Store Bhd. is less liquid than Furniture Concept Bhd.
Part A | | Formula | Family Store Bhd.RM ( '000) | Furniture Concept Bhd.RM ( '000) | v. | Asset Turnover | Asset Turnover= | = 1.30 x | = 1.00 x | vi. | Dividend Yield(in percentage) | Dividend Yield= | Preferred Stockx 100 %= 32 %Common Stockx 100%= 3.6 % | Preferred Stockx 100 %= 33 %Common Stockx 100%= 2.5 % |
| | Formula | Family Store Bhd.RM ( '000) | Furniture Concept Bhd.RM ( '000) | vii. | Earning Per Share(EPS) | Earnings Per Share= | Preferred Stock= RM 49.00per shareCommon Stock= RM 4.90per share | Preferred Stock= RM 39.83per shareCommon Stock= RM 3.98per share | viii. | Pricing Earning Ratio(P/E Ratio) | Price Earnings Ratio= | Preferred Stock=0.51 xCommon Stock= 5.10 x | Preferred Stock= 0.50 xCommon Stock= 5.03 x |
| | Formula | Family Store Bhd.RM ( '000) | Furniture Concept Bhd.RM ( '000) | ix. | Return on asset(ROA)(in percentage) | Return on asset= | x100%= 6.38 % | x100%= 7.47 % | x. | Debt to equity ratio(in percentage) | Debt to equity ratio== | x 100 %= 104.09 % | x 100%= 64.07 % | xi. | Time Interest Earned Ratio | Time Interest Earned Ratio= | = 5.95 x | = 7.19 x |
Part B (a) | | Family Store Bhd. | Furniture Concept Bhd. | Comment | i. | Current Ratio | 2x | 2.28x | Family Store Bhd. is less liquid than Furniture Concept Bhd. and it has less effort to pay off their current liabilities. This may due to Family Store Bhd. has too many inventories compare to Furniture Concept Bhd. | ii. | Acid-Test Ratio | 1.04x | 1.22x | Family Store Bhd. is less liquid than Furniture Concept Bhd.
Bibliography: Peavler, R. (n.d.). Limitations of Financial Ratio Analysis. Retrieved from about.com: http://bizfinance.about.com/od/financialratios/tp/limitations-financial-ratio-analysis.htm Peavler, R. (n.d.). What is the quick ratio and how is it used? Retrieved from About.com: http://bizfinance.about.com/od/financialratios/f/finratioanal4.htm Quick ratio. (n.d.). Retrieved from Investopedia: http://www.investopedia.com/terms/q/quickratio.asp#ixzz2CV2sEy2E