QUESTION TWO [30] The following financial statement was extracted from the records of Waynes Telescope Supplies: Income Statement for the year ended 28 February 2021 2021 2020 Sales (50% is on credit) 438 000 446 000 Less : Cost of Sale 117 000 179 000 Gross Profit 321 000 267 000 Less: Operating expenses 129 000 115 000 Net income before interest and tax 192 000 152 000 Less: Interest expense 3 000 12 000 Net income before tax 189 000 140 000 Less: Tax 17 040 12 240 Net income after tax 171 960 127 760 Balance Sheet on 28 February 2021 2021 2020 Non-current Assets 444 000 295 000 Current assets 90 000 60 000 Inventories 36 000 25 000 Account receivable 45 000 27 000 Cash 9 000 8 000 534 000 355 000 Owners Equity 379 000 200 000 Mortgage Loan 125 000 125 000 Current Liabilities 30 000 30 000 Creditors 30 000 30 000 534 000 355 000 Calculate of the following ratios for 2020 and 2021. (All calculations should be round to one decimal place). 2.1 Current ratio. (3) 2.2 Acid test ratio. (3) 2.3 Fixed assets turnover. (3) 2.4 Contrast the fixed assets turnover ratios computed in question 2.3 above, and if there are any inconsistencies between the two, explain plausible explanations. (6) 2.5 Rate of inventory turnover. (3) 2.6 Debtors collection period. (4) 2.7 Gross income margin (Gross profit margin). (4) 2.8 Net income margin (Net profit Margin). (4) NB: Do not use average ratios