FIN 420: PAST YEAR QUESTION 2018

ANSWER ALL QUESTION

Question 1.

a) Calculate the above indicated ratios for SoHo Fitness Bhd.

Current ratio= Current asset

Current liability
= 224,450
161,350
= 1.39 times (better)

Quick ratio= Current asset – inventories

Current liabilities
= 224,450 – 75,350
161,350
= 0.92 times (better)

Average collection period= Account receivables x 360

Sales
= 30,100 x 360
450,000
= 24.08 days (better)

Fixed asset turnover= Sales

Net fixed asset
= 400,000

Debt ratio= Total debt x 100%

Total asset
= 711,350 x 100%
1,614,450
= 44.06% (worse)

Return on equity= Net profits after tax x 100%

Total equity
= 59,600 x 100%