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    Far670 Tutorial Basis of Analysis

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    2020482736
    The document provides financial statements for Beta Berhad for years 2018, 2017 and 2016. It includes an income statement showing revenue, costs, expenses and profits over the three years. Part a) asks to prepare a horizontal analysis comparing 2016 as the base year and evaluate the results. Part b) asks to explain the primary uses of vertical common-size analysis. The next document provides year-end 2020 and 2019 balance sheets for Companies AB and XY. Part i) asks to prepare vertical common-size balance sheets. Part ii) asks to elaborate on each company's financial position based on the analysis and compare their ability to meet short-term obligations. The final document provides 2019 and 2020 statement of financial position for SM

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    Far670 Tutorial Basis of Analysis

    Uploaded by

    2020482736
    23 views3 pages
    The document provides financial statements for Beta Berhad for years 2018, 2017 and 2016. It includes an income statement showing revenue, costs, expenses and profits over the three years. Part a) asks to prepare a horizontal analysis comparing 2016 as the base year and evaluate the results. Part b) asks to explain the primary uses of vertical common-size analysis. The next document provides year-end 2020 and 2019 balance sheets for Companies AB and XY. Part i) asks to prepare vertical common-size balance sheets. Part ii) asks to elaborate on each company's financial position based on the analysis and compare their ability to meet short-term obligations. The final document provides 2019 and 2020 statement of financial position for SM

    Original Description:

    TUTORIAL PAST YEAR BASIS OF ANALYSIS

    Original Title

    FAR670 TUTORIAL BASIS OF ANALYSIS

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    The document provides financial statements for Beta Berhad for years 2018, 2017 and 2016. It includes an income statement showing revenue, costs, expenses and profits over the three years. Part a) asks to prepare a horizontal analysis comparing 2016 as the base year and evaluate the results. Part b) asks to explain the primary uses of vertical common-size analysis. The next document provides year-end 2020 and 2019 balance sheets for Companies AB and XY. Part i) asks to prepare vertical common-size balance sheets. Part ii) asks to elaborate on each company's financial position based on the analysis and compare their ability to meet short-term obligations. The final document provides 2019 and 2020 statement of financial position for SM

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    23 views3 pages

    Far670 Tutorial Basis of Analysis

    Uploaded by

    2020482736
    The document provides financial statements for Beta Berhad for years 2018, 2017 and 2016. It includes an income statement showing revenue, costs, expenses and profits over the three years. Part a) asks to prepare a horizontal analysis comparing 2016 as the base year and evaluate the results. Part b) asks to explain the primary uses of vertical common-size analysis. The next document provides year-end 2020 and 2019 balance sheets for Companies AB and XY. Part i) asks to prepare vertical common-size balance sheets. Part ii) asks to elaborate on each company's financial position based on the analysis and compare their ability to meet short-term obligations. The final document provides 2019 and 2020 statement of financial position for SM

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 3

    TUTORIAL

    JUNE 2019 QUESTION 3

    a. Beta Berhad’s year-end financial statements show the following:


    BETA BERHAD
    Income Statement for the year ended 31 December

    2018 (RM) 2017 (RM) 2016 (RM)

    Revenue (all credit) 1,518,000 1,320,000 1,020,000


    Cost of goods sold 860,200 660,000 460,000

    Gross profit 657,800 660,000 560,000


    Selling and distribution expenses 75,900 75,350 55,050
    Depreciation expenses 37,400 42,900 40,500
    Administration costs 244,200 211,750 190,750

    Earnings before interest and taxes 300,300 330,000 273,700


    Interest expenses 25,300 33,000 24,600

    Earnings before taxes 275,000 297,000 249,100


    Taxes expense 71,500 77,220 64,760

    Net income 203,500 219,780 184,340

    Required:
    a) I. Prepare a horizontal or trend analysis based on the above income statement
    using 2016 as a base year. (calculate to 2 decimal places)
    (8 marks)
    II. Evaluate the results obtained in part (i) above.
    (6 marks)
    b) Explain the primary uses of vertical common-size analysis.
    (3 marks)
    FEB 2021 QUESTION 1
    Presented below is a balance sheet for two hypothetical companies, company AB and
    company XY as at 31 December 2020.

    Company AB Company XY
    (RM Thousands) (RM Thousands)

    ASSETS
    Current assets
    Cash and equivalents 1,000 200
    Short-term marketable securities 900 -
    Accounts receivable 500 1,050
    Inventory 300 950
    Total current assets 2,700 2,200
    Property, plant and equipment, net. 1,200 750
    Intangible assets 200
    Goodwill - 100
    Total assets 3,900 3,250

    LIABILITIES AND SHAREHOLDERS’ EQUITY


    Current liabilities
    Accounts payable 650 1,200
    Total current liabilities 650 1,200
    Long term bonds 450 800
    Total Liabilities 1,100 2,000

    Total shareholders‘ equity 2,800 1,250


    Total liabilities and shareholders’ equity 3,900 3,250

    Required:
    i. Prepare a vertical common-size balance sheet for both companies.
    (7 marks)
    ii. Based on the above vertical common-size balance sheet:

    a. Elaborate the company’s financial position as at 31 December 2020.


    (18 marks)

    b. Compare the ability of both firms in meeting their short-term obligation.


    (20 marks)
    JULY 2021 QUESTION 1
    The comparative financial data of SMHS Berhad for 31 December 2019 and 2020 are
    presented below:
    Statement of Financial Position as at 31 December 2020

    2019 2020
    RM RM
    ASSETS
    Current assets
    Cash and equivalents 1,826,000 1,890,000
    Short-term marketable securities 50,000 64,000
    Accounts receivable 2,020,000 2,720,000
    Inventory 5,486,000 5,201,000
    Prepaid expenses and other current assets 1,100,000 975,000
    Total current assets 10,482,000 10,850,000

    Property, plant and equipment, net. 4,070,000 4,210,000


    Intangible assets 890,000 950,000
    Total assets 15,442,000 16,010,000

    LIABILITIES AND SHAREHOLDERS’ EQUITY


    Current liabilities
    Accounts payable 6,182,000 6,390,000
    Total current liabilities 6,182,000 6,390,000

    Long term loan 2,360,000 2,210,000


    Total Liabilities 8,542,000 8,600,000

    Total shareholders‘ equity 6,900,000 7,410,000


    Total liabilities and shareholders’ equity 15,442,000 16,010,000

    Required:
    a) Prepare a vertical common-size statement for both years above using total assets as
    the base measure.
    (8 marks)

    b) Based on your analysis in (a) above, determine the type of industry of the company
    and explain your choice.
    (6 marks)

    c) Various techniques are used in the analysis of financial data to emphasize the
    comparative and relative importance of the data presented and to evaluate the
    position of the firm.

    In relation to this statement, explain the use of common-size analysis. You have to
    include 2 advantages and 2 disadvantages of common-size analysis.
    (20 marks)
    (Total: 34 marks)

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