Morgan LTD

Comparative Statement of Financial Position

31 December 2018

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Assets20182017

Cash ..................................................................................................$25,000$40,000

Marketable securities ........................................................................15,00060,000

Accounts receivable (net) .................................................................50,00030,000

Inventory ...........................................................................................150,000170,000

Property, plant and equipment (net) .................................................160,000200,000

Total assets ................................................................................$400,000$500,000

Liabilities and equity

Accounts payable .............................................................................$20,000$30,000

Short-term notes payable .................................................................40,00090,000

Bonds payable ..................................................................................80,000160,000

Ordinary shares ................................................................................170,000145,000

Retained earnings ............................................................................90,00075,000

Total liabilities and equity............................................................$400,000$500,000

Morgan LTD

Income Statement

For the Year Ended 31 December 2018

Net sales ...........................................................................................$360,000

Cost of sales .....................................................................................184,000

Gross profit .......................................................................................176,000

Expenses

Interest expense .........................................................................$24,000

Selling expenses ........................................................................30,000

Administrative expenses ............................................................20,000

Total expenses .....................................................................74,000

Profit before income taxes ................................................................102,000

Income tax expense .........................................................................30,000

Profit ..................................................................................................$72,000

Additional information:

a.Cash dividends of $57,000 were declared and paid in 2018.

b.Weighted-average number of shares of ordinary shares outstanding during 2018 was 60,000 shares.

c.Market value of ordinary shares on 31 December 2018 was $18 per share.

d.Net cash provided by operating activities for 2018 was $63,000.

Required

Using the financial statements and additional information, compute the following ratios for Morgan Ltd for 2018.Show all computations.

1.Current ratio

2.Return on ordinary shareholders' equity

3.Price-earnings ratio

4.Acid-test/Quick ratio

5.Receivables turnover