The financial statements of Morgan Ltd appear below:
Morgan LTD
Comparative Statement of Financial Position
31 December 2018
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Assets 2018 2017
Cash.................................................................................................. $25,000 $ 40,000
Marketable securities........................................................................... 15,000 60,000
Accounts receivable (net)..................................................................... 50,000 30,000
Inventory............................................................................................ 150,000 170,000
Property, plant and equipment (net)...................................................... 160,000 200,000
Total assets.................................................................................. $400,000 $500,000
Liabilities and equity
Accounts payable................................................................................ $20,000 $ 30,000
Short-term notes payable..................................................................... 40,000 90,000
Bonds payable.................................................................................... 80,000 160,000
Ordinary shares.................................................................................. 170,000 145,000
Retained earnings............................................................................... 90,000 75,000
Total liabilities andequity................................................................ $400,000 $500,000
Morgan LTD
Income Statement
For the Year Ended 31 December 2018
Net sales............................................................................................ $360,000
Cost of sales....................................................................................... 184,000
Gross profit......................................................................................... 176,000
Expenses
Interest expense............................................................................ $24,000
Selling expenses........................................................................... 30,000
Administrative expenses................................................................ 20,000
Total expenses........................................................................ 74,000
Profit before income taxes................................................................... 102,000
Income tax expense............................................................................ 30,000
Profit.................................................................................................. $72,000
Additional information:
a. Cash dividends of $57,000 weredeclared and paid in 2018.
b. Weighted-average number of shares ofordinary shares outstanding during 2018 was 60,000 shares.
c. Market value of ordinary shares on 31December 2018 was $18 per share.
d. Net cash provided by operatingactivities for 2018 was $63,000.
Required
Using the financial statements and additional information,compute the following ratios for Morgan Ltd for 2018. Show allcomputations.
1. Current ratio
2. Return on ordinary shareholders’equity
3. Price-earnings ratio
4. Acid-test/Quick ratio
5. Receivables turnover
