debt-to-equity ratio
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Calculation and interpretation of ratios.
Data for White Star Limited:
1. Use the information above to calculate for 2019 and 2018:
debt-to-equity ratio
return on equity ratio
earnings per share ratio.
![WHITE STAR LIMITED
BALANCE SHEET AS AT 30 JUNE
2018
$m
2019
$m
Current assets
Cash
50
330
Receivables
540
310
Inventories
450
260
Total current assets
1 040
900
Noncurrent assets
Property, plant and equipment
160
140
Total noncurrent assets
160
140
Total assets
1 200
1 040
Current liabilities
Creditors and borrowings
630
510
Provisions
15
10
Total current liabilities
645
520
Noncurrent liabilities
Creditors and borrowings
245
195
Provisions
10
15
Total noncurrent liabilities
255
210
Total liabilities
900
730
Net assets
300
310
Shareholders' equity
Share capital ($1 ordinary shares)
80
80
Reserves
35
35
Retained profits
185
195
Total shareholders' equity
300
310](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa0ce450b-2eb4-4912-b95a-e7eddf2f0797%2F30897944-8d73-45a2-9b7b-9f2dcc3e4de3%2Fzp24oaq_processed.png&w=3840&q=75)
Transcribed Image Text:WHITE STAR LIMITED
BALANCE SHEET AS AT 30 JUNE
2018
$m
2019
$m
Current assets
Cash
50
330
Receivables
540
310
Inventories
450
260
Total current assets
1 040
900
Noncurrent assets
Property, plant and equipment
160
140
Total noncurrent assets
160
140
Total assets
1 200
1 040
Current liabilities
Creditors and borrowings
630
510
Provisions
15
10
Total current liabilities
645
520
Noncurrent liabilities
Creditors and borrowings
245
195
Provisions
10
15
Total noncurrent liabilities
255
210
Total liabilities
900
730
Net assets
300
310
Shareholders' equity
Share capital ($1 ordinary shares)
80
80
Reserves
35
35
Retained profits
185
195
Total shareholders' equity
300
310
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