QUESTION TWO [30] You are an investment adviser at Peoples Investments and you are given the task of evaluating a new national frozen yogurt company that many clients are inquisitive about investing in. There is fierce competition within the frozen yogurt industry and not many barriers to entry. The company, Fro YoToGo is offering investors the opportunity to invest in the company as the company wants to expand. The following financial items from Fro YoToGo and the corresponding industry average are as follows: Fro YoToGo Industry average 31 December 2020 31 December 2020 Bank Short term investments Accounts receivable - closing balance Accounts receivable - opening balance Expenses paid in advance Closing inventory Opening inventory 200 000 100 000 25 000 20 000 20 000 20 000 300 000 200 000 30 000 15 000 30 000 30 000 10 000 20 000 120 000 100 000 50 000 Accounts payable - opening balance Accounts payable - closing balance Expenses payable Sales - credit Sales - cash Cost of sales 150 000 120 000 70 000 4 000 000 2 200 000 3 000 000 3 200 000 1 200 000 1 400 000 Required: 2.1. Calculate the following ratios for both Fro YoToGo and for the industry average: 2.1.1. Current ratio 2.1.2. Acid test ratio (4) 2.1.3. Debtors collection period 2.1.4. Creditors payment period 2.1.5. Inventory period 2.2. Consider the information provided and your calculations in 2.1 above and prepare a letter to assist one of your clients, Ms Tulip in making a decision on whether to invest in Fro YoToGo