Calculation and interpretation of ratios Data for White Star Limited is as follows: WHITE STAR LIMITED BALANCE SHEET AS AT 30 JUNE 2019 2018 $m Sm Current assets Cash 330 50 540 310 260 450 1040 900 160 140 160 140 1040 1 200 630 510 15 10 645 520 Receivables Inventories Total current assets Noncurrent assets Property, plant and equipment Total noncurrent assets Total assets Current liabilities Creditors and borrowings Provisions Total current liabilities Noncurrent liabilities Creditors and borrowings Provisions Total noncurrent liabilities Total liabilities Net assets Shareholders' equity Share capital ($1 ordinary shares) Reserves Retained profits Total shareholders' equity 245 195 10 15 255 210 900 730 300 310 80 35 80 35 185 300 195 310 Additional information: Net operating profit after tax is $25 million (2018: $38 million). 1 Use the information above to calculate for 2019 and 2018: a working capital b current ratio C quick ratio d debt-to-equity ratio @return on equity ratio fearings per share ratio. 2 Identify two warning signals that could have negative implications with respect to the company's ability to generate cash flows to meet its future needs. In each case, explain why the signal you have identified could reflect a cash flow problem. 3. At the annual general meeting of White Star, the managing director, Ms Rose Dawson, made the following statement "Recently a number of articles in the financial press have questioned the financial position of our company. This criticism is totally unjustified. Net profit was $25 million and total assets have increased by $160 million. These results show that 2019 was a very successful year for White Star.' Comment on Ms Dawson's statement