Part A (4 marks)

The partial financial information of Flick Ltd is shown below:

	2022	2021
	$	$
Cash	25 000	30 000
Account Receivable (net)	61 300	78 000
Inventory	97 500	36 400
Total Non-current Assets	440 700	370 800
Account Payable	30 000	45 000
Short-term notes payable	45 400	35 100
Total 5 year 10% Debentures	110 600	125 900
Share Capital	340 000	224 200
General Reserve	10 000	0
Retained Earnings	66 000	85 000
Sales Revenue	600 200	650 000
Cost of Sales	422 000	474 500
Net Profit after tax	52 000	58 000

Required:

Using the above information, you are required to calculate the following financial ratios. (4 marks)

1. Profit margin for 2021_________

2. Current ratio for 2022_________

3. Return on ordinary shares equity for 2022_________

4. Debt to assets for 2022_________

Part B (4 marks)

Abbotsford Ltd and Balmain Ltd have provided the following information, which relates to the year ended 30 June 2022.

	Industry Average	Abbotsford Ltd	Balmain Ltd
Current ratio	1.5:1	1.03:1	1.91:1
Profit margin	14.75%	12.52%	18.22%
Debt to asset ratio	90.3%	71.2%	103.4%
Inventory turnover (days)	60 days	55 days	65 days
Receivable turnover (days)	60 days	48 days	78 days
Return on assets	15%	13.31%	19.10%

Required:

Using the above information, evaluate each companys liquidity and profitability. (4 marks)

Word limit 200.

(Type your response directly in the text box below.)