QUESTION 4 Calculate and comment on two (2) ratios for each of the Profitability, Liquidity, Leverage, Working Capital and Valuation Ratios of ABC Ltd from the following financial statements : (10 marks) 3.400 500 500 102 Balance sheet (S in millions) Assets 2010 Liabilities and 2010 owners' equity Current assets: Current liabilities: Cash 200 Accounts payable 400 Accounts receivable 500 Bills payable 100 Inventory 400 Total current liabilities Total current assets 1.100 Long-term liabilities: Long-term debt 200 Fixed assets: Total long-term 200 liabilities Property, plant, and 2400 Shareholders' funds: equipment Less: Accumulated 2.100 Equity share capital 200 depreciation ($1 per share) Net fixed assets 300 Reserves & Surplus 500 Total owners' equity 700 1.490 10 Income statement(s in millions) 2010 Sales Cost of goods sold 1,200 Office and selling expenses Depreciation Earnings before interest and taxes Interest expense Earnings before taxes Taxes Net income Dividends 635 Transfer to reserves and 246 surplus Other information Number of shares Outstanding (millions) Price per share 1.488 607 881 200 Total assets 1,400 1400 Total liability and owners' equity 7.31