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QUESTION 2 (25 MARKS) You are the accountant of Fashionista Berhad, which is a clothing company. The directors of your company require you to analyze and interpret the most recent financial statements and compare its performance with those of previous year. You are presented with the following financial statements for Fashionista Berhad. Statements of Comprehensive Income for the year ended 31 March 2020 and 2021: 31 March 2020 31 March 2021 RM'000 RM'000 Sales revenue 2,000 Cost of sales (see note below) Gross profit Distribution costs (1,200) 800 2,900 (1,800) 1,100 (250) (160) 3 Administrative expenses (200) (200) Profit from operations 440 650 Finance cost (50) (50) Profit before tax 390 600 Income tax expense (44) (46) Net profit for the period 346 554 Note: 10% and 20% of purchases and sales were for cash respectively. Cost of sales figures are made up as follows: Year ended 31 March 2020 31 March 2021 RM'000 RM'000 180 200 Opening inventory Purchases 1,220 1,400 (200) 1,200 1,960 2,160 (360) 1,800 Less Closing inventory Cost of sales Statements of Financial Position 31 March 2020 31 March 2021 RM'000 RM'000 RM'000 RM'000 Non-current assets 3,100 3.674 Property, plant and equipment Less accumulated depreciation (1,214) (1,422) 1,886 2,252 Current assets 200 360 Inventory Trade receivables Cash at bank 750 400 100 120 700 1,230 3.482 2,686 1,000 1,000 Capital and reserves Issued ordinary share capital Share premium account Retained earnings 200 200 368 922 1,568 2,122 Non-current liabilities 10% loan notes 500 500 Current liabilities 210 380 Trade payables Proposed dividend Income tax 260 430 48 50 518 860 2,586 3.482 a) For each of the two years, calculate THREE (3) profitability ratios, TWO (2) liquidity ratios and THREE (3) activity ratios to assist you in your analysis and interpretation of Fashionista Berhad's financial statements. (16 marks)

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