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 $ 3 290 8 200 14.000 25 490 $ 4220 7 350 13 860 25 430 Total current assets Non-current assets Property, plant and equipment Total non-current assets 34 380 34 380 $59 870 30 660 30 660 $56 090 Total assets Current liabilities Payables $11 560 11 560 $11 980 11 980 Total current liabilities 863 Non-current liabilities Interest-bearing liabilities 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 $28 430 $15 400 9 810 $25 210 iPUD LTD Statement of Profit or Loss for the year ended 31 December 2017 ($000) Revenue (net sales) Less: Cost of sales Gross profit Less: Expenses Selling and distribution expenses Administrative expenses $110 000 70 200 39 800 14 200 9 940 3 120 Finance costs Total expenses Profit before income tax Income tax expense Profit 27 260 12 540 3 816 $_8 724 iPUD LTD Statement of Changes in Equity for the year ended 31 December 2017 ($000) $14.400 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 perlod Total share capital Retained earnings Balance at start of period Total recognised profit for the period Dividend pald-ordinary Dividend paid - preference Balance at end of perlod 1.000 1000 $15 400 $9 810 8 724 (5 404) (100) $13 030 Additional information Payables includes $5620 (2017) and S5730 (2016) trade accounts payable, the remainder is accrued expenses. Market prices of issued shares at year-end (2017): Ordinary, $12.00 Preference, $6.70 Required A. Calculate the following ratios for 2017. The industry average for similar businesses is also provided. Industry average retum on assets 22.0% 2. return on ordinary equity 20.0% 3. profit margin 4.0% 4. earnings per share 45c 5. price earnings 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