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You are given the financial statements of Bersatu Berhad for the 2021 and 2020. a. Use the above financial statements, determine the company’s return on equity  (ROE). Is there is any significant different between the ROEs of the company for  the two years? Provide the formula and show your calculation. b. Based on DuPont framework, return on equity is broken into three important  components. What are the three components? Provide the formula for each  component. What does each component attempts to measure?

You are given the financial statements of Bersatu Berhad for the 2021 and 2020. a. Use the above financial statements, determine the company’s return on equity  (ROE). Is there is any significant different between the ROEs of the company for  the two years? Provide the formula and show your calculation. b. Based on DuPont framework, return on equity is broken into three important  components. What are the three components? Provide the formula for each  component. What does each component attempts to measure?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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You are given the financial statements of Bersatu Berhad for the 2021 and 2020.

a. Use the above financial statements, determine the company’s return on equity 
(ROE). Is there is any significant different between the ROEs of the company for 
the two years? Provide the formula and show your calculation.
b. Based on DuPont framework, return on equity is broken into three important 
components. What are the three components? Provide the formula for each 
component. What does each component attempts to measure?

Bersatu Berhad Balance Sheets December 31, 2021 and 2020 (RM000) 2021 2020 Assets Current Assets: Cash 11,000 13,000 Accounts eceivable (net) 93,000 78,000 Inventory Prepaid expenses Total current assets 102,000 91,000 5,000 4,000 211,000 186,000 Property, plant and equipment Land and building Machinery and equipment Total property, plant and equipment Less: Accumulated depreciation Net property, plant and equipment Other assets Total assets Liabilities and stockholders' equity Current liabilities: Accounts payable Notes payables Dividend payable Income taxes payable Total current assets Long-term debt Total liabilities Stockholders' equity: Common stock (RM1.00 par) Paid-in capital in excess of Rfetianed earnings Total shareholders' equity Total liabilities and stockholders' equity 61,000 59,000 172,000 156,000 233,000 215,000 113,000 102,000 120,000 113,000 9,000 8,000 340,000 307,000 55,000 23,000 66,000 2,000 3,000 71,000 5,000 83,000 42,000 75,000 146,000 125,000 10,000 10,000 par 16,000 16,000 168,000 159,000 194,000 340,000 185,000 310,000
Transcribed Image Text:Bersatu Berhad Balance Sheets December 31, 2021 and 2020 (RM000) 2021 2020 Assets Current Assets: Cash 11,000 13,000 Accounts eceivable (net) 93,000 78,000 Inventory Prepaid expenses Total current assets 102,000 91,000 5,000 4,000 211,000 186,000 Property, plant and equipment Land and building Machinery and equipment Total property, plant and equipment Less: Accumulated depreciation Net property, plant and equipment Other assets Total assets Liabilities and stockholders' equity Current liabilities: Accounts payable Notes payables Dividend payable Income taxes payable Total current assets Long-term debt Total liabilities Stockholders' equity: Common stock (RM1.00 par) Paid-in capital in excess of Rfetianed earnings Total shareholders' equity Total liabilities and stockholders' equity 61,000 59,000 172,000 156,000 233,000 215,000 113,000 102,000 120,000 113,000 9,000 8,000 340,000 307,000 55,000 23,000 66,000 2,000 3,000 71,000 5,000 83,000 42,000 75,000 146,000 125,000 10,000 10,000 par 16,000 16,000 168,000 159,000 194,000 340,000 185,000 310,000
Bersatu Berhad Income Statements for the Year Ended December 31, 2021 and 2020 (RM000) 2021 2020 Net sales Cost of goods sold Gross margin Expenses Selling and administrative expenses 582,000 467,000 115,000 645,000 545,000 100,000 64,000 58,000 Interest expense 6,000 5,000 Total expenses Income before taxes Income tax (40%) (rounded to next highest) Net income 70,000 63,000 52,000 21,000 31,000 30,000 12,000 18,000
Transcribed Image Text:Bersatu Berhad Income Statements for the Year Ended December 31, 2021 and 2020 (RM000) 2021 2020 Net sales Cost of goods sold Gross margin Expenses Selling and administrative expenses 582,000 467,000 115,000 645,000 545,000 100,000 64,000 58,000 Interest expense 6,000 5,000 Total expenses Income before taxes Income tax (40%) (rounded to next highest) Net income 70,000 63,000 52,000 21,000 31,000 30,000 12,000 18,000
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