QUESTION 2 (52 marks) Deluxe Ltd. ("Deluxe"),a well-renowned automotive manufacturer and retailer with a 31 August financial year-end, is listed in the automotive sector of the JSE Deluxe continuously expands both organically and by means of acquisitions. Presently, Deluxe is considering the acquisition of a 70% shareholding in Aligned Ltd ("Aligned"). Aligned is a tyre manufacturer that supplies Deluxe with tyres for use in the manufacturing of their vehicles, since Deluxe does not manufacture tyres themselves. The management of Deluxe believes that the acquisition would be beneficial for Deluxe as the entity could then provide in their own tyre needs. It therefore makes strategic sense. Additionally Deluxe will be able to manage both their cost of sales and inventory values better, as they will be able to control the cost of their tyres as well as quantity available. Following are extracts of Aligns and Deluxe's respective most recent financial statements: Align Ltd. Statement of Financial Position as at 30 June 2022 2022 R'000 2021 R'000 Current Assets Inventory 3 808 3 775 Trade receivables 4 114 3 660 Cash and bank 6 091 9 423 Total Current Assets 14 013 16 858 Non-Current Liabilities Long-term borrowings 13 673 14 955 Total Non-Current 13 673 14 955 Liabilities