The statements of profit or loss for the Pirlo for the years ended 31 December 2020 and 2019 are shown below.

2020 2019

N$000 N$000

Revenue 213,480 216,820

Cost of sales (115,620) (119,510)

Gross profit 97,860 97,310

Operating expenses (72,360) (68,140)

Profit from operations 25,500 29,170

Finance costs (17,800) (16,200)

Investment income 2,200 2,450

Profit before tax 9,900 15,420

Share of profit of associate 4,620 3,160

Tax expense (2,730) (3,940)

Profit for the year 11,790 14,640

The following information is relevant:

YOU ARE REQUIRED TO:

4.1 Calculate the following ratios for Pirlo for the years ended 31 December 2020 and 2019.

• Gross profit margin (2)
• Operating profit margin (2)
• Interest cover (2)

4.2 Comment on the overall performance of Pirlo for the years ended 31 December 2020 and 2019. (4)