3 (12 marks) The following information is relevant to Majakathata (Pty) Limited: Majakathata (Pty) Limited Statement of profit and loss for the year ended 31 December 2021 2021 2020 Sales R 2 300 000 R 1160 000 Less: cost of sales 1610 000 1120 000 Gross margin 690 000 480 000 Distribution costs 120 000 80 000 Administrative expenses 150 000 140 000 Profit from operations 420 000 260 000 Interest expense 50 000 60 000 Income before tax 370 000 200 000 Income tax 111 000 60 000 Net profit for the period 259 000 140 000 Majakathata (Pty) Limited Statement of financial position for the years ended 31 December 2021 and 2020 Assets 2021 R 2020 R Current assets Inventories 300 000 300 000 Trade receivables 280 000 220 000 Cash and cash equivalents 280 000 280 000 Prepayments 100 000 120 000 Non-current assets Plant and equipment 3 080 000 3 000 000 Total assets 4 040 000 3 920 000 Equity and liabilities Capital and reserves Issued capital Accumulated profit Non-current liabilities Interest bearing borrowing Current abilities Trade payables R 1 270 000 R 1 300 000 1 600 000 1 320 000 750 000 800 000 420 000 4 040 000 500 000 3 920 000 REQUIRED: 3.1 Using the information provided above calculate the following ratios for 2021 and 2020. 3.1.1 Current ratio 3.1.2 Debt ratio 3.1.3 Operating profit margin 3.1.4 Debtors collection period 3.2 Comment on the results of the ratios calculated in 3.1.2 and 3.1.4 (2) (4) [12]