QUESTION TWO The following information was extracted from the records of Waynes Telescope Supplies: Income Statement for the year ended 29 February 2020 2020 2019 Sales (50% is on credit) 438 000 446 000 Less : Cost of Sale 117 000 179 000 Gross Profit 321 000 267 000 Less: Net expenses 129 000 115 000 152 000 Net income before interest and tax 192 000 Less: Interest paid 3 000 12 000 Net income before tax 189000 140000 Less: Tax 17 040 12 240 Net income after tax 171960 127760 2020 2019 Fixed Assets 444 000 295 000 Current Assets 90 000 60 000 Inventories 36 000 25 000 Debtors 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 Balance Sheet on 29 February 2020 2.1 Undertake calculations of the following ratios for 2020 and 2019. (All calculations should be round to one decimal place). Current ratio Acid test ratio Solvency ratio Rate of inventory turnover Creditors collection period Gross income margin (Gross profit margin) Net income margin (Net profit Margin) 2.2 In terms of the generally acceptable norms comment on whether the liquidity ratios are acceptable or not. Note: All Answers must be typed out and Workings must be shown