1.2

2 The Statement of Comprehensive Income for 2019 and 2018 given below were extracted from the accounting records of Teddy Manufactures limited: Teddy Manufactures Limited Statement of Comprehensive Income for the year ended 31 December 2019 2018 Net sales Cost of sales Gross profit (R) 1 003 600 (905 600) (R) 901 300 (744 300) 98 000 (92 000) 157 000 (65 000) Selling, general and administrative expenses Income from operations 6 000 92 000 Other income/expenses Non-operating income Interest expense Profit before tax 124 500 (90 500) 18 000 (57 000) Income tax Net profit 40 000 (12 000) 53 000 (15 900) 28 000 37 100 Required: Refer to the Statement of Comprehensive Income of Teddy Manufacturers Limited for 2019 and 2018 and comment on the performance of the company including the operating profit earned. Take into account that the profit margin (percentage Profit after tax to sales) for the industry was 4.51% in 2018 and 2.60% in 2019. (4) )