Question
Morning star plc. is a manufacturer of computer accessories. The following are selected items appearing in the income statement and balance sheet for the year
Morning star plc. is a manufacturer of computer accessories. The following are selected items appearing in the income statement and balance sheet for the year ended December 31st, 2019.
Income Statement | |
| $ |
Net Sales | 1,620,000 |
Less: Cost of Goods Sold | 1,110,000 |
Gross Profit | 510,000 |
Selling and general expenses | 360,000 |
Net Operating profit | 150,000 |
Interest expenses | 24,000 |
Net Profit before tax | 126,000 |
Income tax 35% | 44,100 |
Net profit for the year | 81,900 |
Balance Sheet | |
| $ |
Cash and short-term investments | 45,000 |
Receivables | 135,000 |
Inventories | 96,000 |
Property, plant & Equipment | 348,000 |
Total Assets | 624,000 |
Total current liabilities | 126,000 |
Total Non-current liabilities | 156,000 |
Shareholders Equity | 237,000 |
Retained Earnings | 105.000 |
Total Liabilities and Equity | 624,000 |
Required:
Using the information above, compute the Companys ratio below and comment on each:
a. Acid-test ratio
b. Current ratio
c. Asset Turnover
d. Interest Cover
e. Gearing ratio
f. Net Profit Margin
g. Inventory Turnover
h. Gross profit margin
i. Earning per share
j. Debt ratio
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