Scribd
Upload
169 views3 pages

Bs Is Ratios - Azwan Family - Solution

Q1a provides Azwan's balance sheet as of 31 December 2021, listing his assets and liabilities. Q1b shows Azwan's cashflow for the financial year ending 31 December 2021, detailing his monthly salary and expenses. Q1c calculates two of Azwan's financial ratios: his liquid assets to take home pay ratio and debt service coverage ratio. Q1d analyzes Azwan's total annual savings compared to his total salary.

Uploaded by

Natasya Shahrulafizal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
169 views3 pages

Bs Is Ratios - Azwan Family - Solution

Q1a provides Azwan's balance sheet as of 31 December 2021, listing his assets and liabilities. Q1b shows Azwan's cashflow for the financial year ending 31 December 2021, detailing his monthly salary and expenses. Q1c calculates two of Azwan's financial ratios: his liquid assets to take home pay ratio and debt service coverage ratio. Q1d analyzes Azwan's total annual savings compared to his total salary.

Uploaded by

Natasya Shahrulafizal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

QUESTION 1:

Q1a
AZWAN'S Balance Sheet As At 31 Dec 2021

RM RM
Liquid Asset Current Liabilities
Cash at bank 2,000 / Utilities TNB due 300 /
Cash in hand 500 / Money borrowed due 500 /

Total Liquid Assets 2,500 Total Current Liabilities 800

Lifestyle Assets Non-Current Liabilities


House 280,000 / Housing loan 228,000 ///
Viva 23,365 / Viva loan 20,955 /
Household furniture 15,000 / Yamaha 125ZR loan 4,050 /
Yamaha 125ZR 11,800 /
Hand phones 1,000 / Total Non-Current Liabilities 253,005
Bicycle 1,200 /
Total Liabilities 253,805
Total Lifestyle Assets 332,365
NET WORTH 91,060 /
Investment Assets
ASB 5,000 /
Tabung Haji 5,000 /

Total Investment Assets 10,000

TOTAL ASSETS 344,865 / TOTAL LIABILITIES + NETWORTH 344,865 /

workings:
House purchase price 200,000
Less: downpayment 20,000
balance 180,000
int 3%
tenure 30 yrs
Total interest 162,000
Total loan 342,000
Monthly instalment 950
Loan oustanding 20 years 228,000

(20 / x 0.5 = 10 marks)

(10 marks)
Q1b
AZWAN'S Cashflow FYE 31 Dec 2021

Salary RM
(5650*0.9) 5,085 12 61,020 //

Less: Expenses
House monthly instalment 950 12 11,400 //
Viva monthly instalment 305 12 3,660 /
Yamaha 125ZR 165 12 1,980 /
Bicycle 1,200 /
Groceries 500 12 6,000 /
Utility bills 350 12 4,200 /
Astro and netflix 150 12 1,800 /
Children's school needs 200 12 2,400 /
Parents' allowance 200 12 2,400 /
Road tax insurance 1,095 /
Transportation expenses 200 12 2,400 /
Coway rental 65 12 780 /
Zakat 950 /
Miscellaneous exp 100 12 1,200 /

Total Expenses 41,465 //

Savings 19,555 /

(20 / x 0.5 = 10 marks)

(10 marks)
Q1c
Ratios:
Liquid assets to take home pay
Liquid assets 2,500 The liquid assets to take home pay is only 4.10% and 0.49 months
Take home pay 61,020 which is lower as compared to the benchmark of 25% and 3
months. This shows that Azwan does not have enough liquid assets
4.10% to meet short term financial obligations.
0.49 months

Debt service coverage ratio


Take home pay 61,020 The debt service coverage ratio is 3.58 which means that for every
Total monthly instalments 17,040 RM1 of debt charges, Azwan's take home pay can cover up to 3.58
times. This is a positive outcome and it shows that Azwan can
3.58 manage to pay his monthly debt service.

(2.5 marks x 2 = 5 marks)

Q1d

Total Savings 19,555


Total Salary 61,020

Savings 32.05% > 20%

The savings to salary ratio of 32.05% indicates that Azwan can


achieve his goal of saving at least 20% extra from his net salary
after deducting all his annual expenses.

Azwan's overall financial condition is healthy despite the low liquid


assets in that he has a positive networth and extra annual savings
of 32.05%. He may decide to allocate more of this savings to other
types of investments besides ASB and Tabung Haji. He may also
start looking into insurance planning which he currently does not
have.

(5 marks)

You might also like