Question 3 Current and quick ratios measure the liquidity of a company. When is the quick ratio a better measure of liquidity than the current ratio? Give an example to support your answer. [3 marks] Which financial ratio would be of great interest to the shareholders of a company? Why? [3 marks] A firm had the following accounts and financial data for 2010: RM1,800 Sales revenue Accounts receivable Interest expense Total operating expenses Accounts payable RM3,060 500 126 600 Cost of goods sold Preferred stock dividends Tax rate Number of common shares outstanding 40% 1,000 240 Calculate the firm's earnings per share, rounded to the nearest cent. (5 marks) In an effort to analyse Cendana Company finances, Joey realised that the company's net profits after taxes for the current year is missing. Based on the following information determine the company's net profits after taxes using the following information: Return on total assets = 2% Total Asset Turnover = 0.5 Cost of Goods Sold = RM105,000 Gross Profit Margin = 0.30 [6 marks) e. What is the return on equity (ROE) for a firm with sales of RM1,000,000, net profits after taxes of RM30,000, total assets of RM1,500,000, and total liabilities of RM750,000? [3 marks) [TOTAL: 20 MARKS]