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Suppose that you have decided to invest some money in the stock market. After some research online, you come across the financial statements of Young Wireless Limited. Before you can make a decision to invest in the company, you will need to calculate some key financial ratios and then analyze them. The statements are presented below.

Young Wireless Limited Consolidated Balance Sheet (in thousands) As at February 28 2019 2018

Assets Cash $ 1,550,000 $ 840,000 Short-term investments $ 370,000 $ 680,000 Accounts receivable $ 2,800,000 $ 2,270,000 Merchandise inventory $ 620,000 $ 680,000 Other current assets $ 480,000 $ 370,000 Total current assets $ 5,820,000 $ 4,840,000 Long-term investment $ 960,000 $ 720,000 Property, plant and equipment $ 1,960,000 $ 1,350,000 Intangible assets $ 1,480,000 $ 1,210,000 Total assets $ 10,220,000 $ 8,120,000

Liabilities Accounts payable $ 620,000 $ 450,000 Accrued liabilities $ 1,640,000 $ 1,240,000 Income taxes payable $ 96,000 $ 360,000 Other current liabilities $ 82,000 $ 67,000 Total current liabilities $ 2,438,000 $ 2,117,000 Long-term liabilities $ 170,000 $ 110,000 Total liabilities $ 2,608,000 $ 2,227,000 Stockholders' Equity Common stock $ 2,110,000 $ 2,210,000 Retained earnings $ 5,502,000 $ 3,683,000 Stockholders' Equity $ 7,612,000 $ 5,893,000 Liabilities and Stockholders' Equity $ 10,220,000 $ 8,120,000

Young Wireless Limited Consolidated Income Statement (in thousands) For the year Ended February 28 2019 2018

Revenue $ 14,950,000 $ 11,100,000 Cost of sales $ 8,460,000 $ 5,970,000 Gross profit $ 6,490,000 $ 5,130,000 Operating expenses Research and development $ 960,000 $ 680,000 Selling, marketing and admin $ 1,910,000 $ 1,490,000 Amortization expense $ 310,000 $ 195,000 Litigation expense $ 165,000 $ - Total operating expenses $ 3,345,000 $ 2,400,000 Income from operations $ 3,145,000 $ 2,730,000 Other income and expenses Investment income $ 29,600 $ 78,000 Income before income tax expense $ 3,174,600 $ 2,808,000 Income tax expense $ 820,000 $ 910,000 Net income $ 2,354,600 $ 1,898,000

Young Wireless Limited Summary of the Statement of Cash Flows (in thousands) For the year Ended February 28 2019 2018 Net cash provided by operations $ 3,035,000 $ 1,450,000 Net cash used by investing $ (1,470,000) $ (1,825,000) Net cash used by financing $ (850,000) $ (22,850) Net increase (decrease) in Cash $ 717,019 $ (395,832)

Part a) Calculate the following ratios for Young Wireless Limited for 2019 and 2018. For any ratios that require an average (i.e. ROE), use the closing balance for the year. 2019 2018 Gross Profit Margin: Net Profit Margin: Return on Equity: Return on Assets: Asset Turnover: Current Ratio: Quick Ratio: Debt-to-Equity Ratio:

Part b) Based on the figures you calculated, has the company shown improvement in 2019 over 2018? Would you invest in Young Wireless Limited? Explain

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