QUESTION 4 (20 Marks) REQUIRED 4.1 Use the information provided below to calculate the following ratios. Where applicable, express answers to two decimal places. 4.1.1 Profit margin (2 marks) 4.1.2 Debtors collection period (2 marks) 4.1.3 Return on equity (2 marks) 4.1.4 Acid test ratio (2 marks) 4.1.5 Debt to assets (2 marks) 4.1.6 Return on assets (2 marks) 4.1.7 Interest coverage (2 marks) 4.2 Comment on the current ratio which was 1.56:1 in 2019 and 2.19:1 in 2020. (4 marks) 4.3 Provide two possible reasons for a drop in the gross margin from 27.35% in 2019 to 15.82% in 2020. (2 marks) INFORMATION Extracts of the financial statements of Sibaya Limited are as follows: SIBAYA LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2020 R Sales (all credit) 2 409 000 Cost of sales (2 028 000) Gross profit 381 000 Operating expenses (276 000) Operating profit 105 000 Interest expense (36 000) Profit before tax 69 000 Income tax (19 320) Profit after tax 49 680 vmVc STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2020 R Non-current assets 438 000 Current assets *981 000 Shareholders equity 588 000 Non-current liabilities 384 000 Current liabilities 447 000 * Note: Current assets include accounts receivable of R510 000 and inventories of R240 000.