INSTRUCTIONS AND INFORMATION: Leather Boots (Pty) Ltd imports quality leather products such as wallets, handbags, sandals, and a variety of shoes from reliable suppliers. Leather Boots (Pty) Ltd is a web-based company, which sells its products online in South Africa. They send out notifications such as e-mails, Facebook updates and Tweets to their various online customers. Due to supply chain disruptions from international suppliers in 2022, Leather Boots (Pty) Ltd sourced most of its products from local suppliers in. The owner approached you for assistance - as you have financial reporting experience - to answer some questions about Leather Boots (Pty) Ltd. The company provides 20-day credit terms to their debtors. ADDITIONAL INFORMATION: Leather Boots (Pty) Ltd Extract from the statement of profit or loss and other comprehensive income for the year ending 31 December 2022 Leather Boots (Pty) Ltd Statement of financial position on 31 December 2022 IMPORTANT: - Assume 365 days in a year. - Round off your ratio calculations to two decimal points for interpretation purposes. - Carefully study all the information provided to answer the multiple-choice questions on eFundi. REQUIRED: - Answer the followina multible-choice auestions on 1.1 Leather Boots (Pty) Ltd's liquidity: A. Improved from 2021 to 2022 as measured by the acid test ratio. B. Deteriorated from 2021 to 2022 as measured by the acid test ratio, but is still above the norm of 1:1. C. Deteriorated from 2021 to 2022 as measured by the acid test ratio, and is now below the norm of 1:1. D. Deteriorated from 2021 to 2022 as measured by the current ratio, and is now below the norm of 2:1. E. Improved from 2021 to 2022 as measured by the current ratio. 1.2 Leather Boots (Pty) Ltd's profitability: A. Remained constant from 2021 to 2022 as measured by the net profit margin. B. Worsened from 2021 to 2022 as measured by the gross profit margin. C. Worsened from 2021 to 2022 as measured by the net profit margin due to increased cost prices on products sourced from local suppliers. D. Worsened from 2021 to 2022 as measured by the net profit margin due to increased operating expenses. E. Improved from 2021 to 2022 as measured by the net profit margin. 1.3 Which one of the following statements is true when the debtor's collection period of Leather Boots (Pty) Ltd is analysed? A. The debtor's collection period improved from 2021 to 2022, which is also good for the cash flow of the company. B. The debtor's collection period worsened from 2021 to 2022 , and the company is not collecting debtors within their credit policy terms. C. The debtor's collection period worsened from 2021 to 2022, but the company is still collecting debtors within their credit policy terms. D. The debtor's collection period improved from 2021 to 2022, which is also bad for the cash flow of the company. E. The debtor's collection period remained constant from 2021 to 2022. 1.4 What is the debtor's collection period of Leather Boots (Pty) Ltd for 2022? A. 27,76 days B. 18,12 days C. 7,25 days D. 19,28 days E. None of the above 1.5 Which one of the following statements is true when analysing the debtequity ratio of Leather Boots (Pty) Ltd.? A. The debt/equity ratio worsened from 2021 to 2022 , and the company now has more debt than equity financing. B. The debt/equity ratio worsened from 2021 to 2022 , but the company still has less debt than equity financing. C. The debt/equity ratio improved from 2021 to 2022 , and the company now has less debt than equity financing. D. The debt/equity ratio improved from 2021 to 2022 , and the company has more debt than equity financing. E. The debt/equity ratio remained constant from 2021 to 2022. 1.6 Which one of the following statements is true when analysing the inventory turnover rate of Leather Boots (Pty) Ltd? A. The inventory turnover rate increased from 2021 to 2022 which entails that inventory is moving faster in 2022 when compared to 2021. B. The inventory turnover rate increased from 2021 to 2022 which entails that inventory is moving slower in 2022 when compared to 2021. C. The inventory turnover rate decreased from 2021 to 2022 which entails that inventory is moving faster in 2022 when compared to 2021. D. The inventory turnover rate decreased from 2021 to 2022 which entails that inventory is moving slower in 2022 when compared to 2021. E. The inventory turnover rate remained constant from 2021 to 2022. 1.7 Which one of the following statements is true? A. Leather Boots (Pty) Ltd must liquidate the company as they are in serious financial distress. B. Although the net profit percentage of Leather Boots (Pty) Ltd decreased from 2021 to 2022, sales volumes doubled which attributed to more net profit in Rand value. C. Leather Boots (Pty) Ltd is in a better cash position in 2022 when compared to 2021. D. Leather Boots (Pty) Ltd is in a worse cash position in 2022 when compared to 2021. E. None of the statements are true. 1.8 When considering the movement of trade payables (creditors) from 2021 to 2022 of Leather Boots (Pty) Ltd, which one of the following statements would represent the correct effect in the cash flow statement of 2022 ? A. Cash inflow from operating activities of R13 000 . B. Cash inflow from financing activities of R13 000 . C. Cash outflow from operating activities of R13 000 . D. Cash inflow from investment activities of R13 000 . E. Cash outflow from financing activities of R13 000 . 1.9 Which one of the following statements is true? A. Leather Boots (Pty) Ltd had a positive cash flow of R28 000 for the year ending 2022. B. Leather Boots (Pty) Ltd had a negative cash flow of R8 000 for the year ending 2022. C. Leather Boots (Pty) Ltd had a negative cash flow of R20 000 for the year ending 2022. D. Leather Boots (Pty) Ltd had a negative cash flow of R28 000 for the year ending 2022. E. Leather Boots (Pty) Ltd had a positive cash flow of R8 000 for the year ending 2022. 1.10 When considering all the information provided and ratios calculated and compared, which one of the following statements is true on year end (2022)? A. The return on equity of Leather Boots (Pty) Ltd is now worse than what can be earned in a money market account at a bank. B. The operating expenses of Leather Boots (Pty) Ltd is less in 2022 than in 2021. C. The decrease in profit can be attributed to an increase in product cost (cost of sales) from local suppliers. D. The decrease in profit can be attributed to a decrease in sales because of the alternative products sourced from local suppliers. E. The increase in operating expenses should be determined and managed