QUESTION 2 (25 MARKS) You are the accountant of Fashionista Berhad, which is a clothing company. The directors of your c

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Question 2 25 Marks You Are The Accountant Of Fashionista Berhad Which Is A Clothing Company The Directors Of Your C 1 (62.75 KiB) Viewed 17 times

QUESTION 2 (25 MARKS) You are the accountant of Fashionista Berhad, which is a clothing company. The directors of your company require you to analyze and interpret the most recent financial statements and compare its performance with those of previous year. You are presented with the following financial statements for Fashionista Berhad. Statements of Comprehensive Income for the year ended 31 March 2020 and 2021: 31 March 2020 31 March 2021 RM'000 RM'000 Sales revenue Cost of sales (see note below) Gross profit Distribution costs 2,000 (1,200) 800 (160) 2,900 (1,800) 1,100 (250)
3 Administrative expenses Profit from operations Finance cost (200) 440 (200) 650 (50) 390 (50) 600 Profit before tax Income tax expense Net profit for the period Note: 10% and 20% of purchases and sales were for cash respectively. (44) 346 (46) 554 Cost of sales figures are made up as follows: Opening inventory Purchases Year ended 31 March 2020 31 March 2021 RM'000 RM'000 180 200 1.220 1.960 1,400 2,160 (200) (360) 1,200 1.800 Less Closing inventory Cost of sales Statements of Financial Position 31 March 2020 31 March 2021 RM'000 RM'000 RM'000 RM'000 3,100 3.674 Non-current assets Property, plant and equipment Less accumulated depreciation (1.214) (1,422) 1,886 2,252 Current assets 200 360 400 750 Inventory Trade receivables Cash at bank 100 120 700 1,230 2,586 3,482
1.000 Capital and reserves Issued ordinary share capital Share premium account Retained earnings 1,000 200 200 368 922 1,568 2,122 Non-current liabilities 10% loan notes 500 500 Current liabilities 210 380 Trade payables Proposed dividend Income tax 260 430 48 50 518 860 2.586 3,482 a) For each of the two years, calculate THREE (3) profitability ratios, TWO (2) liquidity ratios and THREE (3) activity ratios to assist you in your analysis and interpretation of Fashionista Berhad's financial statements. (16 marks) b) Comment on the ratios you have calculated for both years, and suggest possible reasons for any changes. (9 marks)