A statement of profit or loss and a statement of financial position for Monicas Pies are presented below:

Statement of profit or loss for the year ending 30 June 2017
		2017		2016
Sales		$760,000		700,000
less cost of sales		420,000		400,000
Gross profit		340,000		300,000
less expenses
Depreciation expense		$50,000		60,000
Interest expense		44,000		70,000
Other expenses		100,000		95,000
Profit before tax		146,000		75,000
Income tax expense		26,000		20,000
Net profit after tax		120,000		55,000
Statement of financial position
as at 30 June 2017
	2017		2016		2015
Cash	$40,000		$24,000		$20,000
Accounts receivable	120,000		45,000		48,000
Inventory	80,000		75,000		62,000
Equipment (net)	90,000		70,000		50,000
Motor vehicles (net)	603,000		400,000		360,000
Total assets	933,000		614,000		540,000
Accounts payable	98,000		75,000		70,000
Long term loan	250,000		75,000		65,000
Total liabilities	348,000		150,000		135,000
Ordinary shares ($1 each)	400,000		400,000		400,000
Retained earnings	185,000		64,000		5,000
Total equity	585,000		464,000		405,000
Total liabilities and equity	933,000		614,000		540,000

The share price at the end of 2017 and 2016 was $1.33 and $2.80 respectively.

The ordinary shares were issued at $1 each.

Required: 1. Calculate the following ratios for 2017 and 2016. 2. Discuss any notable trends you observe. Formula 2017 2016 Performance Net Profit/ Average Total Assets 55,000 / 577000 (614000+540000/2) Return on assets Return on equity Net Profit/ Average Shareholders Equity 120,000 / 779000(933000+614000/2) = 15.4% 120,000/524,500 (585000+464000/2) = 0.22 = 22.9% 120,000 / 400000 = 9.5% 55,000/434,500 (464000+405000/2) = 0.127 = 12.7% 55,000 / 400,000 Earnings per share Net Profit/ Average Number of Shares Outstanding = 0.3 = 30% Price earnings Share Price / Earnings per share ratio Liquidity Current Assets / Current Liabilities Current ratio Quick ratio (Cash + Short term Investments + Acc. Receivable)/Current Liabilities Receivables turnover Sales Revenue / Average Accounts Receivable Solvency Total Liabilities/Total Assets Debt to assets Total Liabilities / Total Equity Debt to equity Times interest (Net Profit + Tax Expense + Interest earned ratio Expense) / Interest Expense