The following is the financial statements of Acobra, a company in the business of heavy machinery.

Additional Information:

The inventory and accounts receivable balances as at 30 June 2020 were $320,000 and $400,000 respectively. The net cash provided from operating activities for the current year is $1,450,000. Ratios of one of the company's competitors can be seen in the table below.

Required:

Use the information and formula table provided above to answer the following questions:

a. List and calculate three ratios that you can use for getting a picture of the efficiency of the companys operation. Conclude your analysis. (15 marks)

b. Calculate the earnings per share and price earnings ratio and comment on the use of the ratios. The latest market price of the shares is $31.20 per share. The companys share capital comprised of 1,500,000 shares of $2 each and has not changed throughout the year. (8 marks)

c. Comment on the capital structure of the company and the level of interest expense. (5 marks)

Answer space a)

Ratio	Calculation	Calculated Ratio

Your analysis:

Answer space b)

Ratio	Formula	Calculated Ratio
Earnings per share
Price earnings ratio

Your comment:

Answer space c)