QUESTION 1 You have been asked to analyse the performance of Leo Farms Ltd and prepare a performance report using the following extract of the financial statement for as at 31 December 2019. You have been provided the following additional information, average returns on capital employed for Leo's competitors is 20%, average interest coverage in the industry is 15 times, average industry gearing is 9%, and gross profit margin for the same period for a key competitor for the firm is 38% Income Statement: Revenue Cost of sales Gross profit Administration cost Profit before interest and tax Interest Profit before tax Taxation at 20% Profit after tax (Net income) Dividends Retained earnings '000 84000 56000 28000 19600 8400 420 7980 1596 6384 3220 3164 Statement of Financial Position (extract) '000 Non-current assets Current assets 12% long term bank loan 42140 9744 4900 Ordinary shares par value 25c Reserves 3500 43484 c) Briefly discuss qualitative factors qualitative factors that should be taken into consideration when analysing the performance of Leo Farms Ltd