Homework Help is Here – Start Your Trial Now!
Business
Accounting
Question 1 Below is an extract of the Big Bhd. financial ratios for the year ended 31 December 2019 compared to the latest industry ratios, Big Bhd. has approached the Bank for a loan. Selected financial ratios as at 31 December 2019. Industry Average RM'000 2019 2018 RM'000 RM'000 Current ratio (times) Quick ratio (times) Debtors' collection period Stock turnover (times) Creditors' payment period Fixed assets turmover (times) Total asset turnover (times) Total debt to total asset 1.30 0.89 50 days 3.3 96days 1.58 1.27 66% 25% 6.3 0.91 1.70 0.68 0.97 60 days 2.95 113 days 1.65 51 days 5.5 80 days 2.57 2.15 51% 24% 0.95 76% 27% Long term debt to total capitalization Interest coverage ratio (times) Gross profit margin Net Profit margin Return on total assets Return on equity 4.6 9.1 28% 21% 17% 7.4% 7% 11% 4.9% 6.6% 11.9% 9.6% 12,8% 20.3%

Question 1 Below is an extract of the Big Bhd. financial ratios for the year ended 31 December 2019 compared to the latest industry ratios, Big Bhd. has approached the Bank for a loan. Selected financial ratios as at 31 December 2019. Industry Average RM'000 2019 2018 RM'000 RM'000 Current ratio (times) Quick ratio (times) Debtors' collection period Stock turnover (times) Creditors' payment period Fixed assets turmover (times) Total asset turnover (times) Total debt to total asset 1.30 0.89 50 days 3.3 96days 1.58 1.27 66% 25% 6.3 0.91 1.70 0.68 0.97 60 days 2.95 113 days 1.65 51 days 5.5 80 days 2.57 2.15 51% 24% 0.95 76% 27% Long term debt to total capitalization Interest coverage ratio (times) Gross profit margin Net Profit margin Return on total assets Return on equity 4.6 9.1 28% 21% 17% 7.4% 7% 11% 4.9% 6.6% 11.9% 9.6% 12,8% 20.3%

Financial And Managerial Accounting
Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter14: Financial Statement Analysis
Section: Chapter Questions
Problem 2TIF: Real-world annual report The financial statements for Nike, Inc. (NKE), are presented in Appendix E...
See similar textbooks
icon
Related questions
Question

Assume that you are a bank officer. Perform a comparative analysis based on the above ratios.
Advise the bank whether to grant Big Bhd. a loan.

Question 1 Below is an extract of the Big Bhd. financial ratios for the year ended 31 December 2019 compared to the latest industry ratios, Big Bhd. has approached the Bank for a loan. Selected financial ratios as at 31 December 2019. Industry Average RM°000 2019 2018 RM°000 RM'000 Current ratio (times) Quick ratio (times) Debtors' collection period Stock turnover (times) Creditors' payment period Fixed assets turmover (times) Total asset turnover (times) Total debt to total asset 0.91 1.30 1.70 0.68 0.97 51 days 5.5 80 days 2.57 0.89 60 days 2.95 50 days 3.3 113 days 1.65 96days 1.58 0.95 76% 1.27 2.15 66% 51% Long term debt to total capitalization Interest coverage ratio (times) Gross profit margin Net Profit margin Return on total assets 27% 25% 24% 4.6 6.3 9.1 28% 21% 17% 7.4% 7% 11% 4.9% 6.6% 11.9% Return on equity 9.6% 12,8% 20.3%
Transcribed Image Text:Question 1 Below is an extract of the Big Bhd. financial ratios for the year ended 31 December 2019 compared to the latest industry ratios, Big Bhd. has approached the Bank for a loan. Selected financial ratios as at 31 December 2019. Industry Average RM°000 2019 2018 RM°000 RM'000 Current ratio (times) Quick ratio (times) Debtors' collection period Stock turnover (times) Creditors' payment period Fixed assets turmover (times) Total asset turnover (times) Total debt to total asset 0.91 1.30 1.70 0.68 0.97 51 days 5.5 80 days 2.57 0.89 60 days 2.95 50 days 3.3 113 days 1.65 96days 1.58 0.95 76% 1.27 2.15 66% 51% Long term debt to total capitalization Interest coverage ratio (times) Gross profit margin Net Profit margin Return on total assets 27% 25% 24% 4.6 6.3 9.1 28% 21% 17% 7.4% 7% 11% 4.9% 6.6% 11.9% Return on equity 9.6% 12,8% 20.3%
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Income Statement Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Financial Accounting: The Impact on Decision Make…
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
SEE MORE TEXTBOOKS