Financial statements of iPud Ltd are presented below.

Additional information 1. Payables includes $5620 (2025) and $5730 (2023) trade accounts payable; the remainder is accrued expenses.

Market prices of issued shares at year-end (2025): Ordinary, $12.00; Preference, $6.70.

Required

(a) Calculate the following ratios for 2025. The industry average for similar businesses is also provided.

(b) Given the above industry averages, comment on the company’s profitability, liquidity and use of financial gearing.

(c) Discuss the limitations of such an analysis.

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iPUD LTD Comparative statements of financial position as at 31 December ($000) 2025 2024 Current assets Cash and cash equivalents Receivables (all trade) $ 3.290 $ 4 220 8 200 7 350 Inventories 14 000 13 860 Total current assets 25 490 25 430 Non-current assets Property, plant and equipment 34 380 30 660 Total non-current assets 34 380 30 660 Total assets $ 59 870 $ 56 090 Current liabilities Payables 11 560 11 980 Total current liabilities 11 560 11 980 Non-current liabilities Interest-bearing liabilities 19 880 18 900 Total non-current liabilities 19 880 18 900 Total liabilities Equity Share capital Retained earnings Total equity $ 31 440 $ 30 880 15 400 13 030 15 400 $ 28 430 9 810 $ 25 210