The statement of financial position and income statement of Mandella Company are

Question

The statement of financial position and income statement of Mandella Company are shown below: Mandella Company Statement of Financial Position 31 December 2016 (S in million) Mandella Company Income Statement For the year ended 31 December 2016 (S in million) 2016 2015 Cash Accounts receivable Inventory Prepaid expenses Plant&equipment; (net)334326 188 20Net sales 267 248 740 (325) 415 (176) 239 (66) 173 (43) 130 179 Cost of goods sold 234 Gross profit 85 Operating expenses 59 Operating profit 1,096 1,025 Interest expense Profit before taxes Accounts payable Income taxes payable Long-term liabilities Ordinary shares Retained earnings 122 110 Income taxes 59 57 Net profit 291 286 220220 352 1,096 ,025 404 Additional Information (1) Market price and par value as at 31 December 2016 of Ordinary shares were $20 and $2 per (2) The company declared and paid a dividend of $78 million during 2016. Required: (a) Calculate the following ratios of the company for 2016. (Show workings. Express your share respectively. answers from (v) to (vii) in % and round ALL answers to 2 decimal places.) (i) Earnings per share (ii) Current ratio (iii) Inventory turnover (iv) Times interest earned (v) Debt ratio (in %) (vi) Dividend yield (in %) (vii) Return on assets (in %) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks) (2 marks)

Explanation / Answer

(i)Earning per share=net profit/number of eq. shares=130/110=13:11

(ii)Current ratio= current asset/current liability=762/181=4.21

(iii)inventory turnover=sales/average stock=740/241=3.07

(v)Debt ratio= debt/equity=291/220*100=132.22%

(vi)Dividend yield=dividend per share*100/market price per share=78*100/220=35.45%

(vii)Return on assets=net income/total assets=130*100/1096=11.86%

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