PART B 10 MARKS Your family has a small business, Incinci (Pty) Ltd, which sells specialised medical equipment. During the Covid-19 pandemic, the demand for the equipment sold by the business has increased, and so during 2020 the business has been able to increase prices and expand operations, funded mostly by bank loans. On 30 November 2020, the end of Incinci (Pty) Ltd's 2020 financial year, you have calculated the following financial ratios for the current and prior years. You have also obtained the financial statements of a large, listed medical equipment business, Makulu Ltd, whose financial ratios you have calculated for the 2020 financial year. Total asset turnover (TAT) Net margin Equity multiplier Return on equity (ROE) Incinci (Pty) Ltd 2020 2019 3.21 times 4.28 times 6.06% 4.23% 2.41 times 1.38 times 46.88% 24.98% Makulu Ltd 2020 4.16 times 3.12% 3.43 times 44.52% You are required to: Using the results of the Du Pont analysis, comment on Incinci (Pty) Ltd's performance in 2020. Your comments should cover the three drivers of ROE in approximately equal detail, and should also describe how together these drivers have affected the overall business performance. As this is an open-book exam, there will be no marks allocated to identifying the Aspect and the Meaning of the ratios. Marks will be allocated to discussions of Benchmarks, Explanations, and Risk. Marks will be allocated as follows. Asset efficiency Margins performance Leverage Overall business performance Discussion of benchmarks 1 1 1 1 Discussion of explanation 1 1 1 1 Discussion of risk 1 1 1 (Maximum 10 marks)