Question

.11 85% 06:48 Applied%20Corp%20F1 nance-End%20of%20Sem% e table below provides details of the financial statements of Bambam Ltd which operates hin the electrical industry, for 2015 and 2016. l'able 2: Financial Statements for Bambam Ltd Balance Sheet 2015 57,600 351,200 1,287,360715,200 1,926,802 ,124,000 1,202,950 491,000 146,200 344,800 2,966,592 1,468,800 7,282 632,160 Accounts Receivable Total Current Assets Groes Non Current Assets (Fixed Asets) 263,160 1,039,790 Net Fixed Assets Total Assets Liabilities and Equity Account Payable Notes payables 324,160 636,803 145,600 200,000 89,600 136,000 481,600 723,432 323,432 560,000 460,000 Total current liabilities Long-term debt Common stock Retained earning Total equity Total Liabilities and equity 1,650, 568 32,592 492,592 2,966,592 663,763 1,468.80 Income Statement Cost of goods sold other expenses Operating cost EBITDA Depreciation EBIT Intereat Expenses EBT Taxes (40%) 6,034,000 3,432,000 5,528,000 2,864,000 519,988 358,672 6,047,988 3,222,672 (13,988)209,328 18,900 130,948) 136,012 (266,960) (106,784) 43,823 146,600 58,640 ct income 160 1.602 0.110 Book value per share Stock price 8.5 100,000 100,000 The following also provides estimates of the industry's financial ratios:

Answer 1

Sol (a) The workings of all the ratios are being done in excel and it is pasted as under:-

	Company Ratio Calculation
(i)	Quick	=TCA-Inventories/TCL
	2016	2015
	0.39	0.85
(ii)	Inventory Turnover	=COGS/Avg Inventory
	2016
COGS	5528000
Avg Inv	1001280
Inv T/o	5.5
(iii)	Time Interest Earned	=EBIT/Interest Expense
	2016	2015
	-0.96	4.3
(iv)	Return on Asset	=Net Income/Avg Total Assets
	2016
Net Income	-160176
Avg Total Assets	2217696
ROA	-7.2%
(v)	Price Earning	=Market Price per Share/EPS
	2016	2015
	-1.4	9.7
(vi)	Cash Convertion Cycle	=DIO+DSO-DPO
	DIO	=Avg Inventory/COGS per Day
	DSO	=Avg Account Receivable/Sales per Day
	DPO	=Avg Account Payables/COGS per Day
	COGS per Day	15145.21	DIO	66
	Sales per Day	16531.51	DSO	30
	Avg Inventory	1001280	DPO	22
	Avg AR	491680
	Avg AP	334880
	2016 CCC	74	Days

In comparison to Industry Ratios all the Financial Ratios except CCC whose Industry level is not provided the Company has performed below par this is due to high operating cost and poor operating performance in year 2016.