SmartWare Inc. recorded the following financial data for the year:

Item	Amount (£)
Sales Revenue	700,000
Operating Expenses	250,000
Interest Expense	40,000
Tax Expense	50,000
Net Income	90,000

Requirements:

1. Calculate the interest coverage ratio for SmartWare Inc.
2. Prepare a detailed income statement for the year ended 31 December 2021.
3. Discuss the potential effects of changing interest rates on SmartWare Inc.’s profitability.