Required: Analyse Rara's financial statement. Include the following ratios for 2020 and discuss your findings (2019 values are provided for comparison): Return on assets (year 2019 - 10.8%) Profit margin (year 2019 - 10.0%) Return on common stockholders' equity (year 2019 - 56%)
Required: Analyse Rara's financial statement. Include the following ratios for 2020 and discuss your findings (2019 values are provided for comparison): Return on assets (year 2019 - 10.8%) Profit margin (year 2019 - 10.0%) Return on common stockholders' equity (year 2019 - 56%)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Required:
Analyse Rara's financial statement. Include the following ratios for 2020 and discuss your findings (2019
values are provided for comparison):
Return on assets (year 2019 - 10.8%)
Profit margin (year 2019 - 10.0%)
Return on common stockholders' equity (year 2019 - 56%)
Transcribed Image Text:Refer to the following financial statements of Rara Sdn. Bhd. for 2020 and 2019:
Rara Sdn. Bhd
Balance Sheets
31st December (in millions)
2020
2019
Assets
Current assets
Cash
RM460
RM444
Acount receivable (net)
1,188
1,190
Inventories
1,132
247
1,056
225
Other current assets
2,915
3,128
5,804
RM11.847
Total current assets
3,027
3,281
5.593
RM11,901
Property (net)
Other assets
Total assets
Liabilities and Stockholders' Equity
RM3,313
6,826
RM3,184
6,509
Current liabilities
Long-term liabilities
Stockholders' equity - common
2.154
RM11.847
1.762
Total liabilities and stockholders' equity
RM11,901
Rara Sdn. Bhd
Income Statements
For the year ended 31st December (in millions)
2020
2019
Net sales
RM13,198
RM12,397
Cost of goods sold
Gross profit
7.750
5,448
7.108
5,289
3.299
1,990
Selling and administrative expenses
Income from operations
Interest expense
Other (income) expense, net
3.472
1,976
233
248
11
1,732
Income before income taxes
1,742
Income tax expense
503
502
Net income
RM1,229
RM1,240
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