QUESTION Several potential investors have been studying the affairs Grafton Pty Ltd to decide whether to invest in the company by purchasing unsecured notes with the company was proposing to issue. The statements of financial position at 30 June 2018 and 2019 follow: GRAFTON PTY LTD Statement of Financial Position As at 30 June 2019 2018 3,264 1,519 1,178 2,619 3,094 11,674 19,960 31,634 2,832 1,775 930 1,848 3,605 10,990 16,276 27,266 CURRENT ASSETS Cash at bank Marketable securities Accounts receivable Inventories Other current assets Total Current Assets Non-Current Assets TOTAL ASSETS CURRENT LIABILITIES Accounts payable Bills payable Current maturities of long-term debt Accrued expense Provisions Total Current liabilities NON-CURRENT LIABILITIES Long-term debt 4,300 2.555 450 4,880 1,574 978 720 3,420 11,572 728 2,345 10,378 5,800 4,160 2019 201 Accrued expenses (payroll) Other non-current liabilities Total Non-current Liabilities TOTAL LIABILITIES TOTAL EQUITY TOTAL LIABILITIES AND EQUITY 5,425 2,390 13,615 25,187 6,447 31,634 4,730 2,055 10,945 21,323 5,943 27,266 Required: a. Calculate appropriate liquidity and financial stability ratios for the years ended 30 June 2018 and 2019. Research reveals that typical ratios in the industry for the current and quick ratios are 1.7:1 and 1.0:1 respectively. For financial stability ratios the Debt ratio (total liability/total assets) and the Leverage ratio (total assets/total equity), industry averages are 2.5:1 for the leverage ratio and 60% for the debt ratio. (must show your workings/calculations) (5 marks) b. Comment on the liquidity and financial stability of the company, given the information available. (3 marks) C. Would you, as one of the potential investors in unsecured notes, lend money to the company? Explain why or why not (2 marks)