Question

3:40 Safari < 349441_Group Assignment_Ques... QUESTION 6 Condensed statement of financial position and statement of profit or loss data for Orange Berhad appear below: Orange Berhad Statements of financial position December 31 2017 (RM2016 (RM)2015 (RM) Plant and equipment 0,000 370,0 35,000 Invest Other 90.000 95.000.000 Account receivable (net) 25,000 20,000,000 Share capitalcediny, RM10.000 35.000 Reading 145.000 12.000 11.2000 Non-current liabilities 70,000 5,000,000 Orange Berhad Statements of profit or loss for the year December 31 2017 (RM6RME Sales revenue LowRewards Net als Cost of goods sold Greit 250,000 340.000 Operating expenses including com) 230.000 20.000 Netice Additional information: 1. The market price of Orange's ordinary shares was RM4, RMS and RM7 for 2015, 2016 and 2017 respectively. 2. All dividends were paid in cash. Required: a. Compute the following ratios for both year 2016 and 2017, 1. Profit margin 2. Asset turnover 3. Earnings per share (Weighted average ordinary shares in 2017 were 32,000 and in 2016 were 31,000. 4. Price-camings ratio 5. Payout ratio 6. Debt to assets ratio (6 marks) b. Based on the ratios calculated discuss briefly the improvement or lack thereof in financial position and operating results from 2016 to 2017 of Orange Berhad (4 marks) (Total: 10 พ

Answer 1

Req a) Ratios:
Ratio	Formula	Calculation-2016	Calculation-2017	Result-2016	Result-2017	Analysis
Profit margin	NI / Net Sales	30000/700000	44000/740000	0.04	0.06	Improvement in 2017
Asset turnover	Net Sales/ Avg Assets	(700000*2)/ (600000+533000)	(740000*2) / (600000+640000)	1.24	1.19	Assets less rotated in 2017
Earnings per share	NI / WA ordi shares	30000/31000	44000/32000	0.97	1.38	Good performance in 2017
Price-earnings ratio	Market price / EPS	5/0.97	7/1.38	5.15	5.07	less valuation in market, though performance improved.
Payout ratio	Dividend / EPS	0.65/0.97	0.69/1.38	0.67	0.50	Less dividend paid out in 2017
debt to assets ratio	Total Debt/Total Assets	162000 / 600000	150000 / 640000	0.27	0.23	Risk reduced in 2017
	Year 2016	Year 2017
Dividend Calculation:
RE Op	113000	123000
NI	30000	44000
Less: RE Cl	123000	145000
Dividend paid	20000	22000
Outstanding shares	31000	32000
Dividend per share	0.65	0.69

Req b) Performance brief:

1) company has shown good improvement in profitablility.

2) Assets has been less moved in 2017 in comparison of 2016.

3) company is observing lower market share price in 2017

due to lower dividend rate, though profitability has improved.

4) The company is less risky in 2017 as it has used less leverage

in the year.