CTFC is a furniture manufacturer based in South Africa. It specialises in making furniture from materials sourced from sustainable producers. It is the leading company in the sector, and it has received many awards for its furniture designs using sustainable materials. The market is becoming more competitive, with other furniture manufacturers switching to sustainable production methods. The are some concerns about interest rates in South Africa which have started to rise due to inflation. Year ending 31 December 2020 (Sm) Year ending 31 December 2021 ($m) Revenue Cost of sales 30.2 15.4 Credit purchases 14.8 Creditors 1.4 Inventories (stock) 1.5 Debtors 3.2 Long-term (non-current) liabilities 15.5 Capital employed Table 18.6: CTFC financial data 34.4 1 Define the term 'capital employed'. 2 a Calculate CTFC's gearing ratio in 2020 and 2021. b Describe the change in CTFC's gearing ratio. 35.3 17.2 15.1 1.6 1.1 2.9 15.1 34.5 [2] 2224 Explain two benefits of the change in CTFC's gearing ratio. [4] 3 Using the data in Table 18.6 calculate the following ratios for CTFC for 2020 and 2021: a stock turnover [2] b debtor days C creditor days 4 Explain one reason why CTFC's trade payables turnover has changed. [4] 5 Evaluate the view that CTFC has become more efficient over the period 2020-21. [10] ENTO