QUESTION $2(48$ marks$)$Re$-$Pack Ltd $($Re$-$Pack$)$ is an entity that specialised in packaging material with a strong focus on sustainability and recycling. Re$-$Pack is listed on the Alternative Exchange $($AltX$)$ on the Johannesburg Stock Exchange $($JSE$).$Re$-$Pack develops, manufactures and sells sustainable packaging materials. The entitys packaging materials are environmentally friendly, from the glue and print on the materials, to the material itself being biodegradable while durable. Re$-$Pack also provides facilities for consumers to recycle pre$-$used packaging materials, which Re$-$Pack then collects and uses in the manufacturing of new packaging materials. The entitys packaging materials include boxes of various sizes, protective materials for when goods are transported, paper and bags.Financial year$-$end resultsRe$-$Pack has a $29$ February financial yearend and applies the International Financial Reporting Standards $($IFRS$)$ when preparing the entitys accounting records.On $29$ February $2024,$ Re$-$Packs auditors preformed an inventory count. According to IFRS, packaging materials qualifies as Re$-$Packs inventory from the raw materials to the finished goods. It was determined from the inventory count that:Re$-$Pack had raw materials on hand to the value of R$890450.$Packaging materials that were in the process of being manufactured on $29$ February $2024,$ had a total accumulated cost valued at R$850100.$ Packaging materials that are in the process of being manufactured, are considered work$-$in$-$progress $($WIP$).$Packaging materials that have been completed and are ready for sale on $29$ February $2024,$ have a total cost price of R$1307000.$All of Re$-$Packs inventory on hand as at $29$ February $2024,$ will either be used or sold during the next $12$ months.Re$-$Pack earned revenue of R$12550900$ during the period $1$ March $2023$ to $29$ February $2024.$ This includes revenue for selling the entitys packaging materials as well as for service delivery performed by Re$-$Pack both of these components are considered part of the entitys primary business activities. The underlying cost pertaining to these sales are R$5070300.$Re$-$Packs debtors list indicates accounts receivable to the value of R$310700$ as at $29$ February $2024.$ This is after bad debt to the value of R$6600$ that occurred during the $2024$ financial year has been removed. Re$-$Packs accounts payable age analysis indicates a total of R$963000$ as at $29$ February $2024.$ Re$-$Pack has the intention to settle the full value of the entitys accounts payable balance. Both the accounts receivable and accounts payable values can be considered correct and will be settled by $28$ February $2025.$According to the Re$-$Packs bank statements, Re$-$Pack has R$1008800$ available as of $29$ February $2024.$According to Re$-$Packs Property, Plant and Equipment policy, the cost model is used. Re$-$Pack owns land, buildings, machinery, vehicles and equipment. These have a total cost price of R$18741000$ while the total accumulated depreciation is R$4990100$ as at $29$ February $2024.$ The R$4990100$ accumulated depreciation already accounts for the R $508000$ depreciation for the $2024$ financial year. No accumulated impairment is applicable. All these values have been assessed on $29$ February $2024$ by the external auditors and confirmed to be correct.Re$-$Pack also owns intellectual property regarding the entitys knowledge on the manufacturing of sustainable packaging material. Although this intellectual property has been internally generated, Re$-$Pack has sufficiently demonstrated its technical and commercial feasibility as well as the fact that it is able to generate future economic benefits. A patent has also been obtained in Re$-$Packs name in order to protect this intellectual property. The total capitalised cost of the intellectual property is R$15500000$ and the accumulated amortisation is R$1820000$ as at $29$ February $2024.$ The R$1820000$ accumulated amortisation already accounts for the R$331000$ amortisation for the $2024$ financial year. No accumulated impairment is applicable. Allthese values have been assessed on $29$ February $2024$ by the external auditors and confirmed to be correct.Additional informationRe$-$Packs ordinary shares are trading at R$51\mathrm{.}70$ each on the AltX as on $29$ February $2024.$Re$-$Pack has $6$ million authorised ordinary shares but only $1\mathrm{.}5$ million ordinary shares have been issued. The issued ordinary shares reflect a value of R$2250000$ on the annual financial statements of $29$ February $2024.$Re$-$Pack also owns $4000$ ordinary shares of another, unrelated entity called Mountain Ltd$.$ These ordinary shares are carried in the annual financial statements at R$96000.$Other expenses incurred during the $2024$ financial year total R$1774150.$ These expenses consist of salaries, administrative expenses, transportation expenses and water and electricity. Any other expenses mentioned elsewhere have not been included as part of the R$1774150.$Re$-$Pack has a seven $(7)$ year loan from BNF Bank. The loan was taken out on $1$ March $2021$ for R$3650000.$ According to the loan agreement, the loan is subject to $8\mathrm{.}2\%$ interest quarterly compounding and equal repayments are scheduled on each anniversary of the loan.According to the $2024$ annual financial statements, Re$-$Packs retained earnings closing balance is R$26860792\mathrm{.}15.$ This amount already accounts for any dividends declared during the $2024$ financial year.The South African Income Tax rate for companies is $27\%.$ It may be assumed that all the expenses $($besides for any finance cost$)$ and income items are taxable$/$deductible for tax purposes and are to the same value according to the South African Income Tax Act.REQUIRED:$2\mathrm{.}1.$ Assist Re$-$Pack Ltd by calculating the below figures for the $29$ February $2024$ financial year. Round to two decimals where applicable$\mathrm{.}2\mathrm{.}1\mathrm{.}1.$ Earnings Before Interest and Taxation $($EBIT$)(3$ marks$)2\mathrm{.}1\mathrm{.}2.$ Earnings Before Interest, Taxation, Depreciation and Amortisation $($EBITDA$)(2$ marks$)2\mathrm{.}1\mathrm{.}3.$ Gross Profit MarginSupplement your answer by also interpreting the result.$(3$ marks$)2\mathrm{.}1\mathrm{.}4.$ Interest CoverSupplement your answer by also interpreting the result.$(9$ marks$)2\mathrm{.}1\mathrm{.}5.$ Net Profit MarginSupplement your answer by also interpreting the result.$(5$ marks$)2\mathrm{.}1\mathrm{.}6.$ Financial Leverage Multiplier$(5$ marks$)2\mathrm{.}1\mathrm{.}7.$ Return on Assets $($ROA$).$ Re$-$Pack Ltd wish to base this on the Net Profit figure. Supplement your answer by also interpreting the result.$(3$ marks$)2\mathrm{.}1\mathrm{.}8.$ Return on Equity $($ROE$)\mathrm{.}2\mathrm{.}1\mathrm{.}8\mathrm{.}1$ Use the financial leverage multiplier to calculate your answer$\mathrm{.}2\mathrm{.}1\mathrm{.}8\mathrm{.}2.$ Use the equity figure to calculate your answer$\mathrm{.}2\mathrm{.}1\mathrm{.}8\mathrm{.}3$ Interpret the resulting answer for the calculated ROE.$(4$ marks$)2\mathrm{.}1\mathrm{.}9.$ Quick ratioSupplement your answer by commenting on whether Re$-$Pack Ltds quick ratio is healthy.$(5$ marks$)2\mathrm{.}1\mathrm{.}10.$Debt to Equity ratio $(2$ marks$)2\mathrm{.}1\mathrm{.}11.$P$/$E ratio.Supplement your answer by also interpreting the result.$(3$ marks$)2\mathrm{.}2.$ Perform a six capital analysis on Re$-$Pack Ltd$.(4$ marks$)$