QUESTION 4 4.1. Answer the questions based on the following information. Income tax is calculated at 35% of profit. (20) Tees Fashion Lisas Fashion R 2018 2017 2018 2017 Operating Profit 500 000,00 380 000,00 620 000,00 490 000 Profit after tax 220 000,00 165 000,00 180 000,00 120 000,00 95 000 950 000 Non-current debt 10% p.a 250 000,00 850 000,00 890 000,00 400 000,00 350 000 Equity 900 000,00 Note: The enterprise has no current liabilities. REQUIRED 4.1.1 Calculate the return on net assets of both enterprises for 2018. 4.1.2 Calculate the return on equity of both enterprises for 2018. 4.1.3 Which enterprise is more profitable? Explain. 4.1.4 Should Lisas Fashion be satisfied with its return on assets? Explain. 4.2 In 2018, Jaggers Wholesalers had R3 000 000 Assets, R500 000 current liabilities and R600 000 non-current liabilities. Operating profit was R400 000, interest expense was R150 000 and the tax rate was 40%. REQUIRED Calculate and comment on the following ratios: 4.2.1 Debt to assets. 4.2.2 Debt to equity. 4.2.3 Interest coverage. PROGRAMME HANDBOOK: JULY 2019 INTAKE