3: a) Franco Limited has recently filed for initial public offering and its ordinary shares now trade at the London Stock Exchange. Outline advantages and disadvantages associated with being a limited liability company. (6 marks) b) In addition to the ordinary shares, Franco's management considers to also issue preference shares. Briefly explain why a company might choose to issue preference shares. (4 marks) c) The following figures were taken from the financial reports of Franco Limited: Sales revenue Cost of sales Trade receivables Trade payables Operating expenses Taxes Number of ordinary shares units 282,000 111,250 44,300 15,678 99,450 24,955 80,000 REQUIRED: Assuming 365 days in a year, calculate the following ratios: Gross profit to sales 1. 2. Net profit to Sales 3. Trade receivables ratio 4. Trade payables ratio 5. Working capital ratio 6. Earnings per share (15 marks) (Total 25 marks)