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    BDPW3103 Introductory Finance 1

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    dicky chong
    This document contains information for an introductory finance course, including instructions for an assignment on financial ratio analysis. The assignment requires students to calculate 7 financial ratios for a company for 2020 and 2021 using data from the company's balance sheet. Students must then summarize the company's performance based on relevant profitability and debt ratios and explain weaknesses of financial ratio analysis. The document also includes sample calculations for 2 financial ratios as examples. Additional sections provide the company's balance sheet data for 2020 and 2021 and online class participation guidelines.

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    BDPW3103 Introductory Finance 1

    Uploaded by

    dicky chong
    29 views7 pages
    This document contains information for an introductory finance course, including instructions for an assignment on financial ratio analysis. The assignment requires students to calculate 7 financial ratios for a company for 2020 and 2021 using data from the company's balance sheet. Students must then summarize the company's performance based on relevant profitability and debt ratios and explain weaknesses of financial ratio analysis. The document also includes sample calculations for 2 financial ratios as examples. Additional sections provide the company's balance sheet data for 2020 and 2021 and online class participation guidelines.

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    SEPTEMBER SEMESTER 2022

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    This document contains information for an introductory finance course, including instructions for an assignment on financial ratio analysis. The assignment requires students to calculate 7 financial ratios for a company for 2020 and 2021 using data from the company's balance sheet. Students must then summarize the company's performance based on relevant profitability and debt ratios and explain weaknesses of financial ratio analysis. The document also includes sample calculations for 2 financial ratios as examples. Additional sections provide the company's balance sheet data for 2020 and 2021 and online class participation guidelines.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    29 views7 pages

    BDPW3103 Introductory Finance 1

    Uploaded by

    dicky chong
    This document contains information for an introductory finance course, including instructions for an assignment on financial ratio analysis. The assignment requires students to calculate 7 financial ratios for a company for 2020 and 2021 using data from the company's balance sheet. Students must then summarize the company's performance based on relevant profitability and debt ratios and explain weaknesses of financial ratio analysis. The document also includes sample calculations for 2 financial ratios as examples. Additional sections provide the company's balance sheet data for 2020 and 2021 and online class participation guidelines.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 7

    CLUSTER OF BUSINESS & MANAGEMENT

    SEPTEMBER 2022

    BDPW3103

    INTRODUCTORY FINANCE

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    NAME :

    NO. MATRIKULASI :

    NO. KAD PENGENALAN :

    NO. TELEFON :

    E-MAIL :

    PUSAT PEMBELAJARAN :

    1
    Table of Contents
    QUESTION 1..........................................................................................................................................3
    a) Calculate the following ratio for years 2020 and 2021..............................................................3
    i. Current ratio 3
    ii. Quick ratio 3
    iii. Debt ratio 3
    iv. Inventory turnover 3
    v. Times interest earned 3
    vi. Fixed asset turnover 3
    vii. Net profit margin 4
    viii. Return on equity 4
    APENDEX 1........................................................................................................................................5
    b) Summarise the performance of the firm based on the relevant profitability and debt ratio in
    part (a)...............................................................................................................................................6
    c) Explain the weaknesses of financial ratios analysis in evaluating a company’s performance....7
    ONLINE CLASS PARTICIPANT.................................................................................................................8

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    2
    QUESTION 1
    Answer

    a) Calculate the following ratio for years 2020 and 2021.

    i. Current ratio

    ii. Quick ratio

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    3
    APENDEX 1

    CHANTEKS BERHAD

    BALANCE SHEET AS AT 31 DECEMBER 2020 AND 2021

    2020 (RM’000) 2021 (RM’000)

    ASSETS
    Cash 15,000 30,000
    Marketable securities 8,000 16,000
    Accounts receivable 42,000 34,000
    Inventories 50,000 60,000
    Fixed assets 285,000 270,000
    Total Assets 400,000 410,000

    LIABILITIES AND EQUITY


    Accounts payable 48,000 50,000
    Notes payable 16,000 10,000
    Accruals 6,000 5,000
    Long-term debt 160,000 150,000
    Common shares 120,000 120,000
    Retained earnings 50,000 75,000
    Total Liabilities and Equity 400,000 410,000

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    4
    b) Summarise the performance of the firm based on the relevant profitability and
    debt ratio in part (a).

    The net profit margin for the year 2020 is 5.6% and in the year 2021 is 9%. This
    indicates that the firm’s net profit margin in year 2021 is higher than 2020. This
    margin grew up in year 2021.

    Therefore, the return on equity is 15% for the year 2020 is and 28% for year 2021. So,
    it shows that return on equity for the year 2021 is higher.

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    5
    c) Explain the weaknesses of financial ratios analysis in evaluating a company’s
    performance.

    Financial ratio is an important tool in financial analysis but when the users apply the
    financial ratios, they must take into consideration the weakness related to these
    financial ratios. Among the weakness are:

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    6
    PART 2

    ONLINE CLASS PARTICIPANT

    1) (day 1) Hi guys,
    The roles of a financial manager in a business organisation is to making decisions in
    short-term and long-term investment and financing.

    A company that grow rapidly will show a sudden increase in sales. This increase in
    sale will require additional investment in the form of inventory and fixed asset such as
    industrial plant and equipment. Therefore, the finance manager must determine the
    type and quantity of assets a that must be bought in the short term and long term. At
    the same time, the finance manager also thinks of the best way to fund the investment
    in assets. For example, does the company have adequate funds to purchase the assets?
    Would the company require load or equities? What are the implication of having
    short-term or long-term debts?

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    Referral Code: MartinL for an extra 10% off. | 🔗 OneStopAssignment.com |


    ☎ WhatsApp: 0182579902 | 📧 [email protected]. Grab the deal now! 👍👍👍

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