Table 1 shows extracts from each company's final accounts for the financial year ended 31st December 2020. Statement of Financial Position as at 31" December 2020 Plug Socket Em Em Em Em Em Em Non-current assets 447.0 601.2 (at cost less depreciation) Current Assets Inventory 592.0 403.0 Trade Receivables 176.4 321.9 Cash 84.6 91.6 Total current assets 853.0 816.5 Total assets 1,300.0 1,417.7 Equity Ordinary Shares ($1 each) 320.0 250.0 Retained earnings 367.6 624.6 Total Capital 687.6 874.6 Non-current liabilities Loan 190.0 250.0 Current liabilities Trade Payables 406.5 275.7 Taxation 16.5 17.4 422.4 293.1 Total Equity and Liabilities 1,300.0 1,417.7Table 2 provides data on the average financial ratios for the electrical wholesale sector. Table 2: Financial ratios for the Industry industry Average Return on capital employed 18.50% Net profit margin 15.00% Gross profit margin 35.23% Volume of trade 1.5 Current ratio 1.90 Acid test ratio 1.27 Debtors collection period 30 days Creditors payment period 49 days Inventory turnover 4 cycles Gearing 32% Net dividend E0.05 Dividend cover 6 times Interest cover 15 times Earnings per share E0.36 PE ratio 26 With reference to table 2 and to the answers you calculated in question 1, write an evaluation in which you compare and contrast the financial performance of the two companies in the following areas: a) Profitability b) Management of working capital and liquidity c) Investment potentialExtracts from the Statements of Comprehensive Income for year ending 31" December 2020 Plug Socket Em Em Sales 1,478.1 1,790.4 Cost of Goods Sold 1,018.3 1,214.9 Gross profit 459.8 575.5 Other expenses 308.5 408.6 Profit before interest & tax 151.3 166.9 Loan interest 19.4 27.5 Net profit before tax 440 299 Taxation 140 96 Ordinary dividend 65 55 Retained profit for year 235 148 Additional information: 1. The value of inventory held on 31 December represents the average level of inventory held throughout the year ending 31/12/2020. 2. All inventory is purchased on credit. 3. All sales are transacted on credit. 3. On 315 December 2020 the market share price was: Plug: 26.50 per share Socket: 18.20 per share Calculate the following ratios for each company: write the full ratio formula used and the calculations i. Return on capital employed (ROCE) i. Gross profit margin ii. Net profit margin iv. Volume of trade . Acid test ratio vi. Inventory turnover in days vii. Debtors (i.e. trade receivables) collection period viii. Creditors (i.e. trade payables) payment period ix. Price/Earnings (P/E) ratio x. Gearing Ratio