Find average industry rations

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Reference no: EM133116303

Question

The financial manager Katrina Sdn Bhd, a manufacturing firm, has decided to seek a line of credit from the Alliance Bank. This additional source of funds is needed to support a large portion of the firm's accounts payable during the next three months, which are the firm's peak seasonal sales period. The firm's most recent financial statements were presented to the bank in support of its loan request.

Katrina Sdn Bhd

Income Statement for the Year ended 31 December 2019

 

RM

RM

Sales (all credit)

 

2,400,000

Less : Cost of goods sold

 

1,840,000

Gross profits

 

560,00

Less : Operating expenses:

 

 

General and administrative

120,000

 

Depreciation expense

120,000

240,000

Operating profits

 

320,000

Less : Interest expense

 

40,000

Before-tax profits

 

280,000

Less : Taxes

 

84,000

After-tax profits

 

196,000

Katrina Sdn Bhd

Balance Sheet as at 31 December 2019

 

RM

RM

Cash

56,000

 

Marketable securities

24,800

 

Accounts receivable

132,000

 

Inventories

336,000

 

Total current assets

548,800

 

Net fixed assets

1,080,000

 

Total Assets

1,628,800

 

Accounts payable

 

228,000

Notes payable

 

52,000

Other current payable

 

20,000

Total current liabilities

 

300,000

Long -term  debt

 

600,000

Total [email protected] par

 

500,000

Retained earnings

 

228,800

Total liabilities and shareholders' equity

 

1,628,800

The average industry rations are provided below to facilitate an analysis of the firm's loan request:

  1. Current ratio
  2. Quick ratio
  3. Inventory turnover ratio
  4. Average age of Inventory
  5. Average collection period
  6. Average Payment Period
  7. Total assets turnover
  8. Debt ratio
  9. Times interest earned
  10. Gross profit margin
  11. Operating profit margin
  12. Net Profit Margin
  13. Return on assets
  14. Return on equity
  15. Cash Conversion Cycle

Required:

Compute the above ratios for Katrina Sdn Bhd 2019.

Reference no: EM133116303

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