5. Financial statement analysis A statement of profit or loss and a statement of financial position for Monica's Pies are presented below: Statement of profit or loss for the year ending 30 June 2017 2017 2016 Sales $760,000 700,000 less cost of sales 420,000 400,000 Gross profit 340,000 300,000 less expenses Depreciation expense $50,000 60,000 Interest expense 44,000 70,000 Other expenses 100,000 95,000 Profit before tax 146,000 75,000 Income tax expense 26,000 20,000 Net profit after tax 120,000 55,000 Statement of financial position as at 30 June 2017 2017 2016 2015 Cash $40,000 $24,000 $20,000 Accounts receivable 120,000 45,000 48,000 Inventory 80,000 75,000 62,000 Equipment (net) 90,000 70,000 50,000 Motor vehicles (net) 603,000 400,000 360,000 Total assets 933,000 614,000 540,000 Accounts payable 98,000 75,000 70,000 Long term loan 250,000 75,000 65,000 Total liabilities 348,000 150,000 135,000 Ordinary shares ($1 each) 400,000 400,000 400,000 Retained earnings 185,000 64,000 5,000 Total equity 585,000 464,000 405,000 Total liabilities and 933,000 614,000 540,000 The share price at the end of 2017 and 2016 was $1.33 and $2.80 respectively. The ordinary shares were issued at $1 each Required: 1. Calculate the following ratios for 2017 and 2016. 2. Discuss any notable trends you observe. Formula 2017 2016 Performance Return on assets Return on equity Earnings per share Price earnings ratio Liquidity Current ratio Quick ratio Receivables turnover Solvency Debt to assets Debt to equity Times interest earned ratio