Question B5 Statements of Financial Position and Income Statement of Lincoln Company are shown below: Lincoln Company Statements of Financial Position 31 December ($ in thousand) | Lincoln Company Income Statement for the year ended 31 December 2019 ($ in thousand) 2018 160 100 Cash Supplies Prepaid expenses Accounts receivable Inventory Plant & Equipment (net) 2019 190 10 120 310 540 1,140 2,310 220 36 160 160 298 570 1,104 2,240 132 28 128 140 Net sales Cost of goods sold Gross profit Operating expenses Operating profit Interest expense Profit before taxes Income taxes (20%) Net profit 3,540 (2,100) 1,440 (920) 520 (15) 505 (101) 404 Accounts payable Income Tax payable Dividend payable Notes payable (due on 30 June 2020) Long-term liabilities Ordinary shares, $5 par Retained earnings 230 800 704 2,310 472 800 540 2,240 Additional information: (1) The market price of the ordinary shares as at 31 December 2019 is $25 per share. (2) The Company had paid interim dividend of $80,000 in August 2019, and declared a final dividend of $160,000 on 31 December 2019, which is payable on 29 February 2020. (3) Credit sales totalled 80% of net sales. Required: (a) Calculate the following ratios of the company for the year ended 31 December 2019. State your answer in the appropriate expression, e.g., debt ratio has to be expressed in %. Show your workings. (Round ALL answers to 2 decimal places.) (1) Return on equity (1.5 marks) (ii) Return on assets (1.5 marks) (iii) Accounts receivable turnover (1.5 marks) (iv) Inventory turnover (1.5 marks) Page 12 of 12 Question B5 (continued) (v) Price earnings ratio (1.5 marks) (vi) Dividend yield (1.5 marks) (1.5 marks) (vii) Quick ratio (viii) Debt ratio (1.5 marks) (b) Below is the information related to Williams Company: Reported data for the year Anticipated data for the ended 30 September 2019 year ended 30 September 2020 Net profit $2,400,000 $3,900,000 Number of outstanding 600,000 780,000 shares as at 30 September | Market price per share $40 Assume Williams' anticipated Price/Earnings ratio as at 30 September 2020 is the same as that of 30 September 2019. What will be the anticipated share price of Williams as at 30 September 2020? (3 marks) - End of Section B - - END OF PAPER - Page 13 of 13