(b) Examine the effect of the actions below on the current ratio. Assume that the prevailing current ratio is higher than 1.0.

(i) Use cash to pay off current liability of $10,000

(ii) Purchase raw materials amounting to $10,000 on credit

(iii) Sale of inventory

(iv) Paying a dividend

Analyse the effect of the actions below on the debt/equity ratio. Assume current debt/equity ratio is 0.5. (

v) Issuing new equity (vi) Account receivable collected

(vii) Sell goods on book value, on cash basis

(viii) Pay off the companys long term bank loan

PeriodStartPeriodEnd03/2109/2109/2003/2103/2009/2009/1903/2003/1909/19 Liquidity Ratios Cash Ratio Current Ratio Quick Ratio Leverage Ratios Total Debt/Equity Total Debt/Total Assets Turnover Ratios AccountsReceivableTurnoverDaysSalesOutstanding5.0672.134.7776.598.5142.9915.0524.3111.5131.71 Profitability Ratios OperatingMarginProfitMarginReturnonEquityReturnonAssetsMarketValueRatiosPrice/BookPrice/SalesDividendYieldSharePrice22.9529.608.824.070.684.885.0329.9236.8433.8711.981.035.361.625.55113.12212.1328.7211.470.670.681.623.474.165.461.880.660.730.435.234.045.422.475.362.290.920.653.316.38 \begin{tabular}{llllll} Period Start & 03/21 & 09/20 & 03/20 & 09/19 & 03/19 \\ Period End & 09/21 & 03/21 & 09/20 & 03/20 & 09/19 \\ \hline Balance Sheet (In Millions of SGD) & & & & & \end{tabular} Assets \begin{tabular}{llllll} \hline Period Start & 03/21 & 09/20 & 03/20 & 09/19 & 03/19 \\ Period End & 09/21 & 03/21 & 09/20 & 03/20 & 09/19 \end{tabular} CashFlowfromOperationsCashFlowfromInvestingCashFlowfromFinancing3277325,0936063691,6872,6879458,0501,0332,2782,6001,6992,687664 PeriodStartPeriodEnd03/2109/2109/2003/2103/2009/2009/1903/2003/1909/19 RevenueOperatingExpensesStaffCostsFuelCostsCommission&IncentivesHandlingChargesRentalsonLeasedAircraftsOperatingIncomeEBITDAPre-TaxIncomeNetIncome2,8273,4466648102128246193429488372,1822,831584640766503661,1828041,6343,4975773761741,8637263,7763,4677,6518,0051,0472,2886153548475074188,3257,9111,5162,349255661674131,477287206