The following information is taken from Tanaka Bhd for the year ended 31 December2020.Preference dividend declared and fully paid in 2020: RM100,000Ordinary dividend declared and fully paid in 2020: RM3,960,000Preference share marketable price per unit at 31 December 2020: RM4.60Ordinary share marketable price per unit at 31 December 2020: RM9.00REQUIRED,From the industry average, identify and comment on Tanaka Bhd’s profitability and shortterm liquidity. Tanaka BhdStatement of Comprehensive Income for the year ended 31 December2020RM'000Sales100,000Less: Cost of sales(65,000)35,000Gross profitLess: ExpensesMarketing expensesAdministration expenses(13,000)(9,200)(2,880)Finance expensesOperating profit before tax(25,080)9.920Taxation(3,472)Operating profit after tax6,448 Tanaka BhdStatement of Financial Position as at 31 December20202019Non-current assetsRM'000RM'000Furniture (Net book value)31,84029,200Current assetsCash at bank2,4483,520Inventory13,00013,200Accounts receivable7,6007,000Quoted shares60050023,64824,220Current liabilitiesAccounts payable10,40010,920Accruals30050010,70011,42012,948Working capitalNon-current liabilities12,800Long term loan18,40018,000Net assets26,38824,000Shareholder's equity14,40014.4 million ordinary shares500,000 9% preference shareRetained profits14,4001,0001,00010,9888,60026,38824,000

Answered: The following information is taken from…

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter14: Financial Statement Analysis

Section: Chapter Questions

Problem 14.9BE

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Question

The following information is taken from Tanaka Bhd for the year ended 31 December
2020.
Preference dividend declared and fully paid in 2020: RM100,000
Ordinary dividend declared and fully paid in 2020: RM3,960,000
Preference share marketable price per unit at 31 December 2020: RM4.60
Ordinary share marketable price per unit at 31 December 2020: RM9.00

REQUIRED,

From the industry average, identify and comment on Tanaka Bhd’s profitability and shortterm liquidity.

Tanaka Bhd
Statement of Comprehensive Income for the year ended 31 December
2020
RM'000
Sales
100,000
Less: Cost of sales
(65,000)
35,000
Gross profit
Less: Expenses
Marketing expenses
Administration expenses
(13,000)
(9,200)
(2,880)
Finance expenses
Operating profit before tax
(25,080)
9.920
Taxation
(3,472)
Operating profit after tax
6,448

Tanaka Bhd
Statement of Financial Position as at 31 December
2020
2019
Non-current assets
RM'000
RM'000
Furniture (Net book value)
31,840
29,200
Current assets
Cash at bank
2,448
3,520
Inventory
13,000
13,200
Accounts receivable
7,600
7,000
Quoted shares
600
500
23,648
24,220
Current liabilities
Accounts payable
10,400
10,920
Accruals
300
500
10,700
11,420
12,948
Working capital
Non-current liabilities
12,800
Long term loan
18,400
18,000
Net assets
26,388
24,000
Shareholder's equity
14,400
14.4 million ordinary shares
500,000 9% preference share
Retained profits
14,400
1,000
1,000
10,988
8,600
26,388
24,000

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