Question 2 (Ratio Analysis/ 25 marks) Selected year-end financial statements of Healthy Life Limited are as follows: 2018 Healthy Life Limited Comparative Statements of Financial Position As at December 31, 2019 and 2018 2019 Assets Cash $ 120,000 Short-term investment 100,800 Accounts receivable (net) 350,400 Notes receivable (due in 3 months) 54.000 Inventory 385,800 Prepaid rent 31.800 Property, plant and equipment (net) 1,839,600 Total Assets S2.882.400 $108,000 54,000 78,000 30,000 586,800 24,000 1,686,000 S2.566.800 Liabilities and Equity Accounts payable Wages payable Income taxes payable Long-term loans (due in 5 years) Share capital Retained earnings Total Liabilities and Equity $ 210,000 38,400 39,600 760,800 1,080,000 753.600 S2.882.400 $345,024 78,000 30,000 760,800 1,080,000 272.976 $2.566.800 Healthy Life Limited Income Statement For the year ended December 31, 2019 Net sales (all on credit) Cost of goods sold Gross profit Selling expenses Administrative expenses Finance costs - interest expenses Income before income taxes Income taxes ( 40%) Net income S5,383,200 (3,400,070) (?,???,???) (120,000) (962,200) (49.900) (???,???) (???.???) S ??.??? (c) Discuss the implications of gross profit margin and profit margin, and the relationship between these two margins