Nusantara bumi corporation | Accounting homework help

NUSANTARA BUMI CORPORATION

Statement of Financial Position as at December 31, 

2019(RM)

2018(RM)

2017(RM)

Assets

Cash and equivalents

612,492

217,961

131,085

Account receivables

454,760

554,200

400,522

Inventories

414,770

355,642

400,522

Prepaid expenses

0

66,000

54,000

Fixed assets 

1,937,900

2,437,900

1,837,900

Accumulated depreciation 

621,370

427,580

183,790

Total assets 

2,798,552

3,204,123

2,650,917

Liabilities and Equity 

Accounts payable

236,297

299,600

243,566

Accrued expenses 

26,435

36,202

32,400

Current maturities 

100,000

296,400

302,600

Income taxes payable 

139,804

128,453

125,663

Long-term debt 

800,000

986,300

222,400

Common stock RM0.20 par value

1,000,000

1,000,000

1,000,000

Paid-in capital 

500,000

500,000

500,000

Retained earnings 

(3,984)

(42,832)

224,288

Total liabilities and equities 

2,798,552

3,204,123

2,650,917

NUSANTARA   BUMI CORPORATION

Statement of Financial Performance for Years Ending December 31,

2019(RM)

2018(RM)

2017(RM)

Net Sales

3,055,563

2,983,410

3,245,427

Cost of Goods Sold

2,205,830

2,104,451

2,056,670

Gross Profit

849,733

878,959

1,188,757

Selling and Administrative Expenses

328,523

265,525

278,855

General expenses

203,520

200,455

189,962

Depreciation

193,790

243,790

183,790

Earnings before interest and tax

123,900

169,189

536,150

Interest expense

63,000

89,789

85,750

Earnings before tax 

60,900

79,400

450,400

Tax (28%)

17,052

22,232

126,112

Earnings after tax

43,848

57,168

324,288

Nusantara Bumi Corporation is a company dealing with textiles manufacturing and has been in the market for almost 10 years. Since the textile industry is getting more competitive, Nusantara Bumi is planning for business expansion. Using the provided financial statements, you are assigned to conduct a comprehensive analysis on Nusantara Bumi Corporation in order to identify the strengths and weaknesses of its financial position.

Using average values, compute any two relevant financial ratios for each area that are useful to highlights Nusantara Bumi’s overall financial performance for 2019 and 2018, related to:

i. Ability to meet maturing obligations.

(4 marks)

ii. Ability to service debt and the degree of financial risk.

(4 marks)

iii. Effectiveness in managing assets and efficiency in handling operations.

(4 marks)

iv. Profitability and overall operating results.

(4 marks)

v. Draw inferences concerning Nusantara Bumi Corporation’s financial performance in 2019 relative to 2018 based on calculated financial ratios. Your discussion should include their effectiveness in managing assets and efficiency in handling operations, the degree of financial risks, profitability and overall operating results.

(9 marks)