For a), Could you please provide and calculate the potential investment ratio, etc, P/E ratio, EPS, dividend yield, dividend payout ratio?

For b), could you please calculate the value of equity and provide some hints (DCF?) to answer this question.

Thank you so much.

2018 Sun Ltd is also considering acquiring another company called Lianhu Ltd that currently operates 15 stores in the same sector across the Hong Kong region. Below are the financial statements for the last 2 years of Lianhu Ltd: Balance Sheets as at 31st December: 2019 HK $000's HK $000's Non current assets Land & Buildings 26,200 22,800 Fixtures and Fittings 7,6451 5,400 33.845 28,200 Current Assets: Inventory 1,300 900 Trade receivables 2.100 1.200 Bank 0 3,400 1,200 3,300 Total Assets 37,245 31,500 Capital Ordinary Share Capital $13,000 3,000 Revaluation Account 2.000 2.000 Retained Profits 4,975 4,700 9.975 9.700 Non Current Liabilities Loans 11,000 7,000 11,000 7,000 Current Liabilities Trade payables 12,400 10,400 Proposed Dividends 1,000 3,000 Bank overdraft 2,500 o Taxation 370 1.400 16,270 14,800 Total Equity and Liabilities 37,245 31,500 Income Statements for the year ending 31st December: (HK$ 000's) 2019 2018 Sales 45,000 51.000 Cost of Sales -25.000 -25,000 Gross Profit 20,000 26.000 Other operating expenses - 17,855 -20,458 Operating profit 2,145 5,542 Interest -500 -200 Profit before taxation 1,645 5,342 Taxation -3701 -1,400 Profit after taxation 1,275 3,942 Proposed dividends -1,000 -3,000 Profit for the year 275 942 Balance brought forward 3,758 Retained profits 4,975 4,700 4,700 Required: a) The Financial Controller has asked you, as her assistant, to evaluate the financial performance and position of the company over the last 2 years, using a suitable range of relevant ratios in your evaluation. The Financial Controller advises you that currently the share price is $20 per share. You are required to draft a written report explaining the results of your analysis. (15 marks) b) The Financial Controller has advised that the existing shareholders would be prepared to sell all of their shares in the company for $25 each and has asked you to evaluate whether this would be a fair price for the company. (10 marks) TOTAL 25 marks