Reference no: EM131584642

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).