Nice and Soft Limited is a leading cosmetics distributor in Kenya. In 2021, the company earned revenue of KShs 770 million, which represented a growth of 40% from prior year. Gross margins remained level for both years at 55% but overheads increased by 25% in 2021 to settle at KShs 93.75 million. Depreciation charge increased from KShs 25 million in 2020 to KShs 40 million in 2021 on the back of capital expenditure of KShs 395 million. The net book value of the Companys fixed assets in 2020 was KShs 600 million. The company borrows from its lenders at a rate of 14% and borrowings increased from KShs 45 million in 2020 to KShs 263 million in 2021 to fund the capital expenditure. The Companys tax rate is 30%. In 2021 there was significant growth in the Companys balance sheet driven by receivables growth from KShs 300 million to KShs 400 million, inventory growth from KShs 120 million to KShs 180 million, bank balances increased from KShs 25 million to KShs 61 million and creditors increased from KShs 500 million to KShs 750 million. Retained earnings in 2020 was KShs 400 million. The shareholders capital in the business did not increase in 2021.

Required: Prepare the income statement and balance sheet of Nice and Soft Limited for 2020 and 2021. Additionally, highlight the performance of the company with regard to the following key performance indicators based on relevant ratios for each:

i. Profitability

ii. Liquidity

iii. Interest service

iv. Leverage level

v. Returns to shareholders

please provide a right answer and show every step of calculations also work out each section.