Papraika Limited $($also known as $$Papraika Stores$)$ is the largest non$-$food retailer in South Africa and is listed on the Johannesburg Stock Exchange $($JSE$).$ The company is the leading retailer of clothing, home appliances, stationery, cosmetics$,$ accessories and cellular products in Southern Africa with more than $3000$ retail stores, the majority of which are in South Africa. Papraika Stores caters for different LSM groups and also has become one of South Africa$$s most trusted brands.

The recent depreciation of the rand against world$$s major currencies $($exacerbated by local politics$)$ has sent the JSE share index into a downward spiral and the shareholders of Papraika Stores Limited have also seen a sharp decline in their investment value in the company.

The statement of comprehensive income and the statement of financial position of Papraika Stores Limited are provided below:

Statement of comprehensive income for the year ending $31$ January $2022$

R million

Notes

$2022$

Revenue

a

$23746$

Cost of merchandise

$(13252)$

Gross profit

$10494$

Other operating income

$1533$

Other income

b

$1106$

Trading expenses

c

$(9037)$

Net finance costs

d

$(1075)$

Profit before taxation

$3021$

Taxation

f

$(864)$

Profit for the year

$2157$

Statement of financial position as at $31$ January $2022$

R million

Notes

$2022$

Non$-$current assets

Property, plant and equipment

$3336$

Other Investments

b

$4736$

Goodwill

$378$

Current assets

Inventory

$5116$

Trade and other receivables $$ retail

$6695$

Prepayments

$946$

Cash and cash equivalents

$888$

Total assets

$22095$

Capital and reserves

Share capital

$890$

Non$-$distributable reserves

$237$

Retained income

$8774$

Total equity

$9901$

Non$-$current liabilities

Long$-$term portion of interest$-$bearing debt

d

$5322$

Deferred taxation

$435$

Post$-$retirement medical benefits

$217$

Current liabilities

Short$-$term portion of interest$-$bearing debt

d

$3139$

Short$-$term borrowings

e

$1246$

Trade and other payables

$1835$

Total equity and liabilities

$22095$

Weighted average number of shares $($million$)$

$207$

Dividend $$ Interim $($R million$)$

$382$

Dividend $$ Final $($R million$)$

$765$

Number of retail outlets

$3125$

Staff complement

$21981$

Share price $$ closing $($cents$)$

$14144$

NOTES

a$)$ Of the R$23746$ million sales made during the year, R$16622$ million were on credit. Over the years, Papraika Stores has maintained healthy relations with its suppliers resulting in discounts received and flexible terms of payment. Purchases for the year amounted to R$12120$ million of which $90\%$ were sourced on credit. The gross profit percentage in $2021$ financial year was $32\%($gross profit for the $2021$ financial year amounted to R$9047$ million$).$

b$)$ Other income relates to dividends received from investments $($marketable securities$)$ in listed retail companies outside the country. This has decreased by almost $4\%$ from the previous years.

c$)$ Trading expenses comprise of:

R million

Trading expenses

Depreciation and amortisation

$465$

Employee costs

$3210$

Occupancy costs

$2043$

Net bad debts

$948$

Other operating costs

$2371$

$9037$

d$)$ Finance costs for the year amounted to R$1269$ million and interest income received on credit bank balance was R$194$ million. Interest$-$bearing debt at $31$ January $2022$ was R$10877$ million.

e$)$ The short$-$term borrowings comprise of unsecured loans. Interest and administration costs on these loans are negligible.

f$)$ The corporate taxation rate is $28\%$ and there were $365$ days in the $2022$ financial year.

Calculate the effective interest rate and cash ratio.