Financial statements of ipud Ltd are presented below and on the next page. iPUD LTD Comparative Statements of Financial Position as at 31 December ($000) 2017 2016 Current assets Cash and cash equivalents Receivables (all trade) Inventories Total current assets Non-current assets $ 3 290 8 200 14.000 25 490 $ 4220 7 350 13.860 25 430 Property, plant and equipment Total non-current assets Total assets 34 380 34 380 $59 870 30 660 30 660 $56 090 Current liabilities Payables Total current liabilities $11 560 11.560 $11 980 11980 363 Non-current liabilities Interest-bearing Habilities Total non-current liabilities $19.880 19 880 $31.440 $18 900 18.900 $30 880 Total liabilities Equity Share capital Retained earnings Total equity $15 400 13.030 $15 400 9.810 $25 210 $28 430 iPUD LTD Statement of Profit or Loss for the year ended 31 December 2017 (5000) $110 000 70.200 39.800 Revenue (net sales) Less: Cost of sales Gross profit Less: Expenses Selling and distribution expenses Administrative expenses Finance costs 14 200 9 940 3 120 Total expenses 27.260 12 540 Profit before income tax Income tax expense Profit 3810 $ 8724 iPUD LTD Statement of Changes in Equity for the year ended 31 December 2017 (5000) $14400 14.400 Share capital Ordinary (14 400 000 shares): Balance at start of period Balance at end of period Preference (500 000 shares): Balance at start of period Balance at end of period Total share capital Retained earnings Balance at start of period Total recognised profit for the period Dividend paid ordinary Dividend paid-preference Balance at end of period 1.000 1000 $15 400 $9 810 B 724 (5 404) (100) $13030 Additional information Payables includes $5620 (2017) and 5730 (2016) trade accounts payable, the remainder is accrued expenses. Market prices of issued shares at year-end (2017) Ordinary, 512.00 Preference, 56.70 Required A. Calculate the following ratios for 2017. The industry average for similar businesses is also provided. Industry average 1. retum on assets 22.0% 2.retum on ordinary equity 20.0% 3. profit margin 4.0% 4. earnings per share 45c 5.price-eamings ratio 12,0 6. dividend yield 5.0% 7. dividend payout 70% 8. current ratio 2.5:1 9. quick ratio 1.3:1 10. receivables turnover 13.0 11. inventory turnover 6.0 12. debt ratio 40.0% 13. times interest earned 6.0 14. asset turnover 1.8 B. Given the above industry averages, comment on the company's profitability, liquidity and solvency. C. Discuss the limitations of such an analysis