Reference no: EM132324880
Question :
Condensed financial statements for Jasmine Lid are presented below.
JASMINE LTD Statement of financial position as at 30 June
|
|
2016
|
2015
|
2014
|
|
Cash
|
$ 60 000
|
$ 40 000
|
$ 18000
|
|
Receivables (net)
|
70 000
|
60 000
|
48 000
|
|
Inventory
|
90 000
|
85 000
|
64 000
|
|
Investments
|
75 000
|
70 000
|
45 000
|
|
Plant and equipment (net)
|
500 000
|
410 000
|
358000
|
|
|
$795000
|
$665000
|
$533000
|
|
Current liabilities
|
$ 75 000
|
$ 80 000
|
$ 70 000
|
|
Long-term debt
|
80 000
|
85 000
|
50 000
|
|
Share capital, $10 each
|
340 000
|
300 000
|
300 000
|
|
Retained earnings
|
300 000
|
200 000
|
113 000
|
| |
|
|
$533000 |
|
JASMINE LTD
|
|
|
|
Statement of profit or loss
for the year ended 30 June
|
|
|
|
|
2016
|
2015
|
|
Sales
|
$780000
|
$700000
|
|
Less. Sales returns and allowances
|
(40 000)
|
(50 000)
|
|
Net sales
|
740 000
|
650 000
|
|
Cost of sales
|
420 000
|
450 000
|
|
Gross profit
|
320 000
|
210 000
|
|
Operating expenses (including income tax)
|
200 000
|
110 000
|
|
Profit
|
$120000
|
$100000
|
Additional information:
1. The market price of Jasmine Ltd's shares was $4 at 30 June 2014, $10 at 30 June 2015 and $15 at 30 June 2016.
2. All dividends were paid in cash.
3. The weighted average number of shares was 30 000 in 2015 and 31 984 in 2016
Please help me about those three required questions.
Required
(a) Calculate the following for 2016 and 2015.
1. Profit margin
2. Gross profit margin
3. Asset turnover
4. Earnings per share
5. Price/earnings ratio
6. Cash dividend payout ratio
7. Debt to total assets ratio
(b) Based on the ratios calculated, discuss briefly the improvement or lack thereof in the financial position and operating results from 2015 to 2016 of Jasmine Ltd.
(c) Discuss the limitations of financial statement analysis.