FIN533 studocu Question 1a 1b 1c PDF

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Assignment 1FIN533 PAPER JUNE 2018Part AQuestion 1 (a)Kalsom’sASSETS (RM) (RM) LIABILITIES &NET WORTH(RM) (RM)Liquid Assets: Current Liabilities: Saving Account 1,300 CIB Credit card Private Retirement scheme Outstanding Balance500.3,000.Current Account 5,000. Total Liquid Assets 6,300 Total Cur...

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Assignment 1

FIN533 PAPER JUNE 2018 Part A Question 1 (a) Kalsom’s ASSETS

(RM)

(RM)

Liquid Assets: Saving Account

1,300.00

Current Account Total Liquid Assets

5,000.00

(RM)

Current Liabilities: CIB Credit card Private Retirement scheme Outstanding Balance 6,300.00

Lifestyle Assets: Single storey house Honda City Clothes, handbag, and shoes Electronic gadget

LIABILITIES & NET WORTH

220,000.00 25,000.00 20,000.00 15,000.00

500.00

3,000.00

Total Current Liabilities Non-Current Liabilities: Home mortgage

Apartment mortgage

(RM)

3,500.00

102,500.00

695,000.00 797,500.00

Total Lifestyle Assets Investment: Saving Tabung Haji MyEG Shares (5000unit xRM2) Studio Apartment Total Investment Total Assets

280,000.00

5,000.00 10,000.00

Total Liabilities

Net Worth

(179,700.00)

320,000.00 335,000.00 621,300.00

Total Liabilities & Net Worth

Balance Sheet as at the end of 31st December 201

Question 1(b)

801,000.00

621,300.00

Kalsom’s Cash Flow Statement for the year ended 31st December 2017 Inflows/Income: Monthly salary Rental income - studio apartment Dividend MyEG Dividend TH 8%

72,000.0 0 14,400.0 0 200.00 400.00 87,000.0 0

Total Inflows Less: Outflows/Expenditure: Instalment house Instalment apartment House maintenance Apartment maintenance Medical insurance Internet Broadband Zakat Fuel and car maintenance Utilities Dining expenses Car insurance Clothing expenses

7,440.00 12,600.0 0 1,200.00 1,440.00 2,520.00 1,320.00 2,160.00 9,600.00 6,000.00 7,200.00 800.00 6,000.00

Total Outflows

Contribution to savings

58,280.0 0

-

28,720.0 0

Question 1 ( c )

1. Current Ratio

=

Liquid Assets / Current Liabilities

=

6300 / 3500

=

1.8 times

Kalsom’s has RM1.80 in liquid assets which means every RM1 that she has in current liabilities or for every RM1.00 borrowed by Kalsom’s, her ability to payback current liabilities is 1.8 times. Kalsom is able to payback her current liabilities with the money she have.

2. Debt Service Coverage Ratio

=

Take Home Pay / Debt Service Charge

=

total inflows / instalment house + instalment apartment

=

RM 87000 / (RM 7440 + RM 12600)

=

RM 87000/ RM 20040

=

4.34 Times

This ratio means that Kalsom earns RM4.34 in take-home pay for each RM 1.00 of required debt repayment and interest. The higher the ratio the better, this ratio best if 3.0 and above. It is shows that Kalsom has better ability to make loan repayments....