1. Show the total liabilities and shareholders equity of the above statement of financial position as it would appear in the common size statement?

2. If an investor performs an analysis of the above statement of financial position, the investor would find that the statement comprises of some important financial elements. Briefly discuss these elements with examples.

3. Net operating profit ratio determines working efficiency of the management. Briefly explain what would determine the overall efficiency of the business.

4. Assume that a company has both ordinary and preference share capital. Explain, with reasons, the treatment of preference share capital and preference share dividends when calculating the earnings (EPS).

$ Bob's Donut Shoppe, Inc. Statement of Financial Position As of the 31st January 2020 $ Fixed assets Renovation and improvements 25,000 Less: accumulated depreciation (500) Net fixed assets 24,500 Current assets Cash Accounts Receivable Prepaid Rent Inventory Total current assets Total assets 49,600 3,000 750 18,800 72,150 96,650 Liabilities Accounts payable Accrued expenses Unearned income Long-term liabilities Total current plus long-term liabilities 19,000 700 9,000 24,500 53,200 Equity Common stock Net income less: Dividends Total shareholder's equity Total Liabilities and shareholder's equity 50,000 (6,050) (500) 43,450 96,650 $ Bob's Donut Shoppe, Inc. Statement of Financial Position As of the 31st January 2020 $ Fixed assets Renovation and improvements 25,000 Less: accumulated depreciation (500) Net fixed assets 24,500 Current assets Cash Accounts Receivable Prepaid Rent Inventory Total current assets Total assets 49,600 3,000 750 18,800 72,150 96,650 Liabilities Accounts payable Accrued expenses Unearned income Long-term liabilities Total current plus long-term liabilities 19,000 700 9,000 24,500 53,200 Equity Common stock Net income less: Dividends Total shareholder's equity Total Liabilities and shareholder's equity 50,000 (6,050) (500) 43,450 96,650