10 50% Question 2 The following information of Mendoza Limited and its competitor Luis Limited is given below: Income Statements for the year ended 31 December 2021 Mendoza Limited Income Statements for the years ended: Mendoza Luis Limited Limited $000 $000 Sales 40,000 38,000 Cost of goods sold -22,760 20.200 Gross profit 17,240 17.800 Less: Operating expenses -10.500 8,600 Net income 6,740 9.200 Statements of Financial Position as at 31 December 2021 Mendoza Luis Limited Limited Assets $000 $000 Furniture at net book value 8,000 10.700 Closing Inventory 2,000 3.249 Trade receivables 4,530 2.300 Cash 2.110 1.965 Total assets 16.640 18.214 Equity Share Capital 8,000 8.000 Retained earnings 6,740 9.200 Total equity 14.740 17,200 Liabilities: Trade payables 1.800 960 Accruals 300 54 Total liabilities 1.900 1014 Total liabilities and equity 16.640 18.214 Required: a Calculate the following ratios for each of the 2 years Gross Profit Margin [4 marks] Net Profit Margin (4 marks] Inventory Turnover Penod (4 marks) IV. Current Ratio 4 marks] From the results of part a comment on the overall profitability of both companies (4 mark=) [Total: 20 marks] DELL