Financial Statement Ratio Analysis

The following information (in $000) has been obtained from Diamond Limiteds financial statements for the fiscal years ending December 31.

2020 2019 2018

Total assets $738 $583 $514

Current liabilities 78 71 93

Total liabilities 229 164 169

Total shareholders equity 494 427 387

Income before taxes 87 63 56

Interest expense 10 6 5

Net cash provided by operating activities 117 99 99

Net income 62 49 53

Number of common shares outstanding 67 77 73

Taken from stock market at Dec. 31 $16.3 $12.44 $11.7

Market price per share (not in $000)

There are no preferred shares issued by Diamond.

REQUIRED: Show all calculations. Round all calculations to two decimal places. Use appropriate units for each ratio calculation.

A. Calculate the following items for Diamond Limited for fiscal years 2019 and 2020:

i) Current cash debt coverage ratio

ii) Cash debt coverage ratio

iii) Rate of return on assets

iv) Earnings per share

v) Price earnings ratio

vi) Times interest earned

B. Comment on whether there has been improvement or deterioration from 2019 to 2020 in the ratios calculated. Take the perspective of Diamonds management. Briefly explain.

.