1.1.1. My current ratio shows as 1.2:1 please verify  1.1.2. My Acid test ratio shows as 0.75:1 please verify 1.2 calculate the Price Earnings ratio and explain what a low PE ratio might mean? I'm not comfortable with my calculations and answer. Please help. 1.3 Calculate the Earnings per share. Will shareholders be happy with this? Why? I'm not comfortable with my calculations answer. Please help.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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1.1.1. My current ratio shows as 1.2:1 please verify 

1.1.2. My Acid test ratio shows as 0.75:1 please verify

1.2 calculate the Price Earnings ratio and explain what a low PE ratio might mean? I'm not comfortable with my calculations and answer. Please help.

1.3 Calculate the Earnings per share. Will shareholders be happy with this? Why? I'm not comfortable with my calculations answer. Please help.

 

Required:
1.1.
Calculate and comment on the following ratios
1.1.1. Current ratio (last year 2,33 1)
1.1.2. Acid test ratio (last year 1.58 1)
1.2.
Calculate the PE (Price Earnings) ratio and explain what a low PE ratio might mea
1.3.
Calculate the earnings per share Will shareholders be happy with this? Why? (
1.4.
Calculate the market to book ratio and explain the significance of this ratio.
1.5.
Calculate and comment on the debt equity ratio,
1.6.
Calculate the retained income for the year.
Transcribed Image Text:Required: 1.1. Calculate and comment on the following ratios 1.1.1. Current ratio (last year 2,33 1) 1.1.2. Acid test ratio (last year 1.58 1) 1.2. Calculate the PE (Price Earnings) ratio and explain what a low PE ratio might mea 1.3. Calculate the earnings per share Will shareholders be happy with this? Why? ( 1.4. Calculate the market to book ratio and explain the significance of this ratio. 1.5. Calculate and comment on the debt equity ratio, 1.6. Calculate the retained income for the year.
The following balances/data was extracted from the accounting records of Benta Ltd on 28 February
2020, the end of their financial year
R
Share capital (900 000 shares at R2 par value)
1 800 000
Retained income
160 000
Non Current Assets
1750 000
Inventories
220 000
Receivables
600000
Cash/Bank
300000
Payables
730000
Loans at 15% p.a.
180000
Net profit after tax
765 000
Market price of share
270
Dividends per share
65
Required:
1.1.
Calculate and comment on the following ratios:
Transcribed Image Text:The following balances/data was extracted from the accounting records of Benta Ltd on 28 February 2020, the end of their financial year R Share capital (900 000 shares at R2 par value) 1 800 000 Retained income 160 000 Non Current Assets 1750 000 Inventories 220 000 Receivables 600000 Cash/Bank 300000 Payables 730000 Loans at 15% p.a. 180000 Net profit after tax 765 000 Market price of share 270 Dividends per share 65 Required: 1.1. Calculate and comment on the following ratios:
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