Financial statements of iPud Ltd are presented below.

Additional information 

1. Payables include $5620 (2020) and $5730 (2019) trade accounts payable; the remainder is accrued expenses.

2. Market prices of issued shares at year-end (2020) were: Ordinary, $12.00; Preference, $6.70.

Required

(a) Calculate the following ratios for 2020. The industry average for similar businesses is also provided.

(b) Given the above industry averages, comment on the company’s profitability, liquidity and use of financial gearing.

(c) Discuss the limitations of such an analysis.

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Current assets Cash and cash equivalents Receivables (all trade) Inventories Total current assets Non-current assets iPUD LTD Comparative Statements of Financial Position as at 31 December ($000) Property, plant and equipment Total non-current assets Total assets Current liabilities Payables Total current liabilities Non-current liabilities Interest-bearing liabilities Total non-current liabilities Total liabilities Equity Share capital Retained earnings Total equity 2020 $ 3290 8200 14 000 2019 $ 4220 7350 13 860 25 490 25 430 34 380 30 660 34 380 30 660 $59 870 $56 090 11560 11980 11.560 11 980 19 880 18900 19 880 $31440 15 400 13 030 $28 430 18 900 $30 880 15 400 9810 $25210