Selected Big Wes Ltd. 2019 and 2018 figures and 2018 ratios are presented as follows:

	BIG WES 2019	BIG WES 2018
	US$M	US$M
Net credit sales	66 415	65 492
Profit after tax	6 787	6 214
Profit available to ordinary shareholders	6 740	6 178
Income tax	2 104	2 090
Interest expense	911	899
Earnings before income tax and interest expense	9 802	9 203
Cost of sales	31 243	31 291
Gross profit	35 172	34 201
Operating expenses	25 467	25 278
Current assets	22 203	18 720
Cash + Receivables + Marketable securities	16 632	13 660
Net receivables	6 954	7 041
Inventory	3 409	3 581
Total assets	77 478	74 638
Current liabilities	17 839	17 089
Total liabilities	53 089	52 239
Net cash flows from operating activities	9 688	8 479
Capital expenditures	2 795	2 714
Total equity	24 389	22 399
Weighted average no. of ordinary shares	1 541	1 557
Share price	$82.94	$68.43
Dividends	3 434	3 305
Earnings per share	$4.37	$3.97

Required:

1. Calculate the following and type your answer in the table provided. Marks will be deducted if no workings are shown. (14 marks).

Liquidity ratio

1. Current ratio

2. Inventory turnover

Solvency ratio

3. Debt to total asset

4. Times interest earned

Profitability ratio

5. Return on ordinary shareholders equity

6. Return on assets

7. Profit margin

[Answer here]

RATIOS	2019	2018
Liquidity
1. Current ratio		1.10:1
2. Inventory turnover		8.45 times
Solvency
3. Debt to total assets		0.70:1
4. Times interest earned		10.24 times
Profitability
5. Return on ordinary shareholders equity		28.50%
6. Return on assets		8.40%
7. Profit margin		9%

[Show workings here]

Liquidity ratio

1. Current ratio = ____________ _____________ = ______

2. Inventory turnover = ____________ ___________ = ______

Solvency ratio

3. Debt to total assets = ____________ ___________= ______

4. Times interest earned = _____________ __________ = ______

Profitability ratio

5. Return on ordinary shareholders equity = ____________ ____________ =

6. Return on assets = ___________ ____________ = ______

7. Profit margin = ___________________ = ______

2. Evaluate the liquidity, solvency and profitability of Big Wes Ltd by commenting on the changes of each ratio between 2018 and 2019. (6 marks)

[Answer here]

Liquidity: (2 marks)

Solvency: (2 marks)

Profitability: (2 marks)