Compute the profit before tax margin financial ratio

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Reference no: EM133092299

Question - Crafty Berhad is a furniture manufacturer for local and overseas wholesalers and retailers. In 2018, it launched a master plan to improve its financial performances and positions. Below were the results for the last three (3) years:

 

2018

2019

2020

 

RM'000

RM'000

RM'000

Revenue

166,000

147,000

155,000

Profit before tax (PBT)

25,000

28,000

30,000

Profit after tax (PAT)

21,000

22,000

25,000

Profit attributable to owners of parent company

18,900

19,800

22,500

Equity attributable to owners of parent company

143,000

155,000

176,000

Deposits, bank and cash balances

64,000

81,000

77,000

Number of ordinary shares in issue ('000)

280,000

320,000

320,000

Net assets per share (NAT) in RM

0.48

0.52

0.59

Required -

(a) Compute the following financial ratios using the above financial information:

(i) Profit before tax margin (PBT)

(ii) Profit after tax margin (PAT)

(iii) Profit margin attributable to owners of parent company (iv) Equity margin attributable to owners of parent company (v) Earnings Per Share (EPS)

(b) Evaluate the effects on the financial ratios calculated in (a) above for 2018 and 2020, and comments on these effects.

(c) Discuss whether a potential investor looking for long-term investment, would consider buying shares in this company.

Reference no: EM133092299

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