PGBM01: Relying only on accounting figures from Income Statement and Balance Sheet do not present the complete performance: Financial Management and Control Assignment, UOS, Malaysia

Part A

“ Relying only on accounting figures from Income Statement and Balance Sheet do not present the complete performance and evaluation of a company”
Please argue and critique this statement.
Your company has the intention to expand the business by investing in greenfield investment. You are required to advise the management on the sources of finances to facilitate this investment.

Part B

The following are extracts of the Income Statement and Balance Sheet of Universal Ltd.

The following ratios indicate the benchmark performance of the industry average for the year 2021:

You are required to calculate and show your workings on the following ratios for both years:

i. Gross Profit Margin
ii. Net Profit Margin
iii. Current Ratio
iv. Quick Ratio
v. Receivables Collection Period
vi. Earnings Per Share
vii. Price Earning Ratio
viii. Dividend Yield

Your management requires you to explain the following category. You are required to calculate the ratio and critically comment on it. Suggest improvements to the ratios for the organization where possible.

i. Profitability ratio
ii. Efficiency ratio
iii. Liquidity ratio
iv. Investor’s Ratio
v. The weakness of Ratio

Part C

The net operating cash flows of the investment schemes of Cafe and a Disco are as follows:

Given that the residual value for Cafe and Disci are £18,000 and £ 22,000 respectively while the required rate of return is 12%.

You are required to calculate, for both schemes, the:

i. Accounting Rate of Return
ii. Payback period
iii. Weakness of the above investment appraisal

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