Question C4 The Statements of Financial Position and Income Statement of Whirlwind Company are shown below: Whirlwind Company Income Statement For the year ended 31 December 2016 (S in thousand) 95 727 Whirlwind Company Statements of Financial Position 31 December 2016 (S in thousand) 2016 Cash Accounts receivable 55 Inventory 270 Prepaid expenses 60 Patent 90 Plant & equipment (net) 570 1,240 2015 80 149 285 55 36 535 1,140 (412) 315 (147) Net sales Cost of goods sold Gross profit Operating expenses Operating profit Interest expense Profit before taxes Income taxes Net profit 168 (13) 155 (40) 110 152 115 40 Accounts payable Notes payable (Due in 6 months) Long-term liabilities Ordinary shares Retained earnings 360 300 430 1,240 320 300 360 1,140 Additional Information: (1) (2) Par value and market price as at 31 December 2016 of ordinary shares are $5 and $15 per share respectively. Credit sales totalled 75%. Whirlwind Company declared and paid a dividend of $45,000 during 2016. Required: (a) Calculate the following ratios of the company for 2016. Show your workings. (Round up ALL answers to 2 decimal places.) (i) Earnings per share (in $) (1.5 marks) (ii) Price-earnings ratio (1.5 marks) (iii) Quick ratio (1.5 marks) (vi) Accounts receivable turnover (1.5 marks) (v) Times interest earned (1.5 marks) (vi) Debt ratio (in %) (1.5 marks) Question C4 (continued) (vii) Dividend yield (in %) (1.5 marks) (viii) Return on equity (in %) (1.5 marks) (b) If you are the credit manager of ABC bank and now considering the application of a long- term loan of $300,000 from Whirlwind Company, name the TWO most important and relevant ratios listed in part (a) above to help your decision. (2 marks)