QUESTION 2 2. The following information was obtained from the books of Prime Tune Ltd: Condensed statement of profit or loss for the year ended December 31,2021 2020 2021 SM Turnover SM 490.00 SM $M 585.00 Gross profit 17.50 21.10 Interest (1.98) (1.98) Profit before tax 15.52 19.12 Tax (4.65) (5.74) Profit after tax 10.87 13.38 Dividends: Ordinary 2.30 2.40 Preference 0.08 (2.38) 0.08 (2.48) Profit for the year 8.49 10.90 Retained earnings b/d 22.90 29.70 Retained earnings c/d 31.39 40.60 Market price per share 1.50 1.75 Condensed statement of financial position as at September 30, Non-current assets Net current assets Total assets less current liabilities 2020 2021 SM SM 7.92 14.22 54.17 57.08 62.09 71.30 Capital and reserves Ordinary shares @$0.25 9.90 9.90 8% Preference shares @$1 each 1.00 1.00 Retained earnings 31.39 40.60 Non-current liabilities 19.80 19.80 62.09 71.30 Required: Calculate and comment on the following ratios: (a) gearing. (b) return on equity, (c) EPS, Marks 20