QUESTION 2 Use the information given below to answer the following questions. Where applicable, express answers to ratios to two decimal places 2.1 Will the company be able to fund its short-term obligations if inventories are not sold? Motivate your (3 marks) answer 2.2 The directors are considering financing the expansion of the company by taking out a long-term (6 marks) loan. With the use of the relevant ratios advise whether this would be appropriate for the company (2 marks) 23 Comment on the dividend payout rate of the company. Calculate the cost (as a percentage) to Satner Limited of not accepting discounts from creditors in settlement of accounts (3 marks) 2.4 (3 marks) 2.5 As a shareholder would you be satisfied with the profitability of the company? Motivate your answer 26 Is the company's collection policy effective? Justify your answer. (3 marks) INFORMATION SATNER LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2021 R 1 574 800 Sales (812 600) Cost of sales 762 200 Gross profit (420 680) Operating expenses 341 520 Operating profit (56 820) Interest expense 284 700 Profit before tax (85410) Company tax 199 290 Net profitar tax STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021 Assets R Non-current assets 783 000 Current assets: 606 600 Inventories 203 000 Accounts receivable 277 800 Cash and cash equivalents 125 800 Total assets 1389 600 Equity and liabilities Shareholders' equity 628 900 Non-current liabilities (15%) 378 800 Current liabilities 381 900 Accounts payable 100 800 Other current liabilities 281 100 Total equity and abilities 1 389 600 Note: 1 Inventories as at 31 December 2020 amounted to R185 000 2 All purchases and sales are on credit 3. Credit forms to debtors are 30 days 4 Credit terms of 3/10 net 90 days are granted by creditors. 5. Dividends for the year amounted to R139 503