Question 3 The condensed financial statements of Wilmslow Inc. for the years ended 30 June 2017 and 30 June 2018 are presented below: Wilmslow Inc. Statements of Financial Position as at 30 June 2018 (in millions) 2017 (in millions) Assets Current Assets Cash and cash equivalents Debtors Inventories Other current assets 277.5 497.8 513.2 166.1 1454.6 255.6 471.7 440.6 143.2 1311.1 Property, plant and equipment Investments Intangibles and other assets Total Assets 335.8 27.7 694.7 2512.8 265.0 25.9 271.1 1873.1 Liabilities and Equity Current liabilities Long-term liabilities Shareholder's equity Total Liabilities and Equity 837.4 619.0 1056.4 2512.8 759.5 565.9 547.7 1873.1 Wilmslow Inc. Income Statements for the years ended 30 June 2018 in millions) 3618.0 2017 (in millions) 3381.6 Revenues 819.5 Costs and Expenses Cost of goods sold Selling and administrative expenses Interest expense Total Costs and Expenses 2357.6 38.1 3215.2 765.1 2224.6 52.4 3042.1 Income before taxes Income tax Net Income 402.8 166.0 236.8 339.5 165.3 174.2 Additional information: 1. Shareholder's equity consists entirely of ordinary shares. 2. Inventory on 30 June 2016 was 452.8 million. 3. Assets on 30 June 2016 was 1779.4 million. 4. Equity on 30 June 2016 was 394.2 million. Required: (a) Calculate the following ratios for 2018 and 2017: i) Current ratio ii) Inventory turnover ratio iii) Gross profit margin iv) Net profit margin v) Return on assets vi) Return on shareholders' equity vii) Debt to asset ratio viii) Times interest earned (2 marks x 8 ratios = 16 marks) (b) Prepare a report analysing the firm's financial ratios and comment on the performance. (9 marks) [Total: 25 marks