REQUIRED Calculate and comment on the following ratios of both companies (Nik Limited and Nak Limited): 3.1 Gross margin (4 marks) 3.2 Return on equity (4 marks) 3.3 Return on assets (4 marks) 3.4 Acid test ratio (4 marks) 3.5 Debt to assets (4 marks) Note: Where applicable, round off answers to ratios to two decimal places. INFORMATION Extracts of the Statement of Comprehensive Income for the year ended 31 December 2018 and Statement of Financial Position as at 31 December 2018 are given below for two companies viz. Nik Limited and Nak Limited. Extract of the Statement of Comprehensive Income for the year ended 31 December 2018: Nik Limited Nak Limited R R Sales 3 960 000 1 296 000 Cost of sales 2 772 000 518 400 Operating profit 882 000 743 400 Profit before tax 777 600 698 400 Profit after tax 544 320 488 880 Extract of the Statement of Financial Position as at 31 December 2018: Nik Limited Nak Limited R R Non-current assets 1 188 000 756 000 Current assets 1 017 000 234 000 2 205 000 990 000 Share capital 1 200 000 600 000 Retained earnings 150 000 48 000 Non-current liabilities 612 000 288 000 Current liabilities 243 000 54 000 2 205 000 990 000 Note: Value of inventories on 31 December 2018: Nik Limited R400 000; Nak Limited R200 000.