Condensed financial statements for Jasmine Ltd are presented below. 

Additional information:

1. The market price of Jasmine Ltd’s shares was $4 at 30 June 2014, $10 at 30 June 2015 and $15 at 30 June 2016.

2. All dividends were paid in cash.

3. The weighted average number of shares was 30 000 in 2015 and 31 984 in 2016.

Required

(a) Calculate the following for 2016 and 2015.

1. Profit margin

2. Gross profit margin

3. Asset turnover

4. Earnings per share

5. Price/earnings ratio

6. Cash dividend payout ratio

7. Debt to total assets ratio  

(b) Based on the ratios calculated, discuss briefly the improvement or lack thereof in the financial position and operating results from 2015 to 2016 of Jasmine Ltd.

(c) Discuss the limitations of financial statement analysis. 

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Cash Receivables (net) Inventory Investments Plant and equipment (net) Current liabilities Long-term debt JASMINE LTD Statement of financial position as at 30 June Share capital, $10 each Retained earnings 2016 $ 60000 70 000 90 000 75 000 500 000 $795 000 $ 75.000 80 000 340 000 300 000 $795 000 2015 $ 40 000 60 000 85 000 70 000 410 000 $665 000 $ 80 000 85 000 300 000 200 000 $665 000 2014 $ 18000 48 000 64 000 45 000 358 000 $533 000 $ 70000 50 000 300 000 113 000 $533 000