Morning star plc. is a manufacturer of computer accessories. The following are selected items appearing...
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Accounting
Morning star plc. is a manufacturer of computer accessories. The following are selected items appearing in the income statement and balance sheet for the year ended December 31st, 2015.
Income Statement
Net Sales
450,000
Less: Cost of Goods Sold
270,000
Gross Profit
180,000
Selling and general expenses
129,000
Net Operating profit
51,000
Interest expenses
6,000
Net Profit before ta
45,000
Income tax 35%
13,500
Net profit for the year
31,500
Balance Sheet
Cash and short-term investments
8,000
Receivables
38,000
Inventories
40,000
Property, plant & Equipment
214,000
Total Assets
300,000
Total current liabilities
40,000
Total Non-current liabilities
60,000
Shareholders Equity $10 par
80,000
Retained Earnings
120,000
Total Liabilities and Equity
300,000
Required:
Using the information above, compute the Companys ratio below and comment on each:
Current ratio
Asset Turnover
EPS
Interest cover
Gearing ratio
Answer & Explanation
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