Comparative balance sheets and income statements for E-Worths Limited are given below.

During the year ended 30 June 2016, E-Worths Limited declared and paid dividends of $26 000. On 30 June 2016, the market price per share was $2.70 and 90 000 shares were on issue.
1. Assume you are a banker evaluating a request for a short-term loan from E-Worths Limited. The company would like to borrow on 1 July 2016 and repay on 31 December 2016. Name and calculate three 2016 ratios that you would use to determine the likelihood that the company will be able to make the loan repayment when it falls due.
2. Assume you are a potential investor evaluating a share purchase in E-Worths Limited. You are looking for an investment that will provide a steady stream of dividend income over the years. Name and calculate three 2016 ratios that you would use to make your decision about whether to buy shares in E-Worths Limited.
3. List and briefly explain three disadvantages of basing your decisions solely on ratio analysis.
4. List other tools that analysts and other users of financial statements might use to overcome the limitations associated with the use of ratios alone.

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Current assets Cash Receivables Inventories E-WORTHS LIMITED BALANCE SHEETS AS AT 30 JUNE Other Total current assets Noncurrent assets Property, plant and equipment Total assets Current liabilities Creditors and borrowings Provisions Total current liabilities Noncurrent liabilities Loan Total liabilities Net assets Shareholders' equity Share capital Reserves Retained earnings Total shareholders' equity 2016 9000 41 79 210 4 334 160 494 77 40 117 140 257 237 90 115 32 237 2015 $000 43 74 203 5 325 141 466 64 30 94 140 234 232 90 115 27 232