Reference no: EM132417197
The following were the income statements and balance sheets of Man Fai International Limited for 2018 and 2019. The corporate tax rate was 16.5% for the two years.
Man Fai International Limited's Income Statement (all figures in thousands)
2019 2018
Sales $900,000 $800,000
COGS $360,000 $360,000
Other Expenses $135,000 $120,000
Depreciation $90,000 $96,000
Interest $45,000 $56,000
Man Fai International Limited's Balance Sheet (all figures in thousands)
2019 2018
Cash $60,000 $100,000
Accounts Receivable $240,000 $150,000
Inventory $300,000 $250,000
Fixed Assets $600,000 $500,000
Total Assets $1,200,000 $1,000,000
Accounts Payable $240,000 $200,000
Long-Term Debt $360,000 $400,000
Common Equity $600,000 $400,000
Question 1: Present Man Fai International Limited's 2018 & 2019 income statement and balance sheet in the common-size format. What is the usefulness of this format?
Question 2: What were the 2018 & 2019 Profit Margin? Any improvement over the period?
Question 3: How can a company, such as Man Fai International Limited, increase its Return on Assets (ROA) and its Return on Equity (ROE)?
Question 4: What were the 2018 & 2019 Current Ratio and Cash Ratio? Any improvement over the period?