2.1 The effectiveness of the company regarding the management of its accounts payable. 2.2 The ability of the company to settle its short-term debts under distress conditions. 2.3 The percentage of the profit that has been retained in the company. 2.4 The profitability of the company from the point of view of the shareholders. 2.5 A measure of the efficiency with which the total assets of company are managed. 2.6 The effectiveness of the credit administration of the company in respect of its customers who purchase on credit.

In addition to the above, the following information is available: Al sales and purchases of inventory are on credit. Imventories on 31 December 2020 amounted to R1 500000 . Credit terms of 5/10 net 90 days are granted by creditors. Credit terms of 60 days are granted to debtors. Dividends declared for the years ended 31 December 2021 and 2022 amounted to R1 169280 and R1 422000 respectively. The financial manager of Orbit Limited provided the following forecasts for 2023: Sales are estimated at 8000 units with a seling price of R1800 each. The manulacturing costs include direct materials of R460 per unit, direct labour of R315 per unit, variable overheads of R170 per unit and fixed overheads of R880000. Fixed seling and administration costs are estimated at F2000000 and the variable seling costs are estimated to be 7.5% of sales. The directors are contemplating diversification in 2024 by entering the passenger transport market. This could be achieved through the purchase of a fleet of midi buses that are expected to cost R9500000. An additional R500 000 wil be spent on import dutes. The cost of operating the buses each year is expected to be R4 100000 and the annual revenues from transporting the possengers are estimated at R7 000000 . The buses are expected to have a total salvage value of R1000 000 and the estimated usetul life of the buses is five years. The company's cost of capital is expected to reduce to 15%. Depreciation is calculated using the straight-line method. ORBIT LIMITED: FINANCIAL PERFORMANCE AND FORECASTING The mission of Orbit Limited is to achieve its vision by providing an innovative product and creative customer experiences. It's talented staff are guided by the values, social conscience and customer-centric mindset espoused by the board of directors. At the core of Orbit Limited is its customers. The company is committed to successful growth by delivering excellent service to its customers to whom it offers quality and value. It is for these reasons that Orbit Limited was able to achieve success in the marketplace. However, the management has identifed the need to improve in certain respects. The following are the financial statements for the post two years: \begin{tabular}{|c|c|c|} \hline \multicolumn{3}{|l|}{ Orbit Limited } \\ \hline \multicolumn{3}{|c|}{ Statement of Financial Position as at 31 Decenber: } \\ \hline & 2022 & 2021 \\ \hline & R & R \\ \hline \multicolumn{3}{|l|}{ ASSETS } \\ \hline Non-current assets & 11810000 & 7560000 \\ \hline Property, plant and equipment & 10025000 & 6250000 \\ \hline Investments & 1785000 & 1310000 \\ \hline Current asaets & 4190000 & 4690000 \\ \hline Inventories & 1875000 & 2350000 \\ \hline Accounts receivable & 1925000 & 2200000 \\ \hline Cash & 390000 & 140000 \\ \hline Total assets & 16000000 & 12250000 \\ \hline \multicolumn{3}{|l|}{ EQUITY AND LIABILITIES } \\ \hline Equity & ? & ? \\ \hline Ordinary share capital & 5480000 & 3660000 \\ \hline Retained eamings & ? & ? \\ \hline Non-current liabilities & 4500000 & 3800000 \\ \hline Loan (20\% p.a.) & 4500000 & 3800000 \\ \hline Current liabilities & 2300000 & 1500000 \\ \hline Accounts payable & 2300000 & 1500000 \\ \hline \end{tabular}