4 REQUIRED (20 Marks) Use the information given below to calculate the following ratios for 2019. (Where applicable, round off answers to two decimal places.) Also provide a brief interpretation of each answer. The comparative figures for 2018 are given in brackets. 4.1 Gross margin (2018: 60.53%) 4.2 Inventory turnover (2018: 5.02 times) 4.3 Acid test ratio (2018: 1.05:1) 4.4 Debt to equity (2018: 60.38%) 4.5 Return on equity (2018: 36.45%) 4.6 Debtors collection period (2018: 29.56 days) 4.7 Earnings per share (2018: 108.42 cents) INFORMATION (2 marks) (3 marks) (3 marks) (3 marks) (3 marks) (3 marks) (3 marks) FIAMMA LIMITED EXTRACT OF STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2019 Sales (all credit) Operating expenses L Operating profit Company tax Note: 1. The goods were sold at cost plus 90%. 2. The tax rate of the company is 30%. R 1 668 200 (486 000) 308 000 (86 400) STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: 2019 2018 Assets R R Non-current assets (Fixed assets only) ? 782 090 Inventories 230 000 202 000 Accounts receivable ? 276 000 Cash and cash equivalents 116 000 124 00 ? 1 384 000 Total assets Equity and liabilities Equity ? 626 090 Non-current liabilities: Long-term loan from BT Bank ? 378 090 Accounts payable Other current liabilities 108 000 100 000 366 000 280 000 Total equity and liabilities ? 1 384 000 Additional information: 1. Depreciation for the year ended 31 December 2019 amounted to R100 000. Non-current assets purchased during 2019 amounted to R132 000. No fixed assets were sold. 2. There were 200 000 ordinary shares in issue during 2019. There was no change to the share capital during 2019. Retained earnings for the year ended 31 December 2019 amount to R26 000. 3. An amount of R76 000, including R20 000 for interest, was paid to BT Bank during 2019. 4. The credit terms to debtors are 30 days