Question 2 (24 marks) Medictech manufactures medical devices for hospitals and clinics. This is a capital intensive industry with fierce competitions from other manufacturers. In 2021, the company management invested significantly to expand its operations, with a strategic objective of increasing profit margin and shareholders' return The Statement of Profit or Loss and the condensed Statement of Financial Position of Medictech for 2020 and 2021 financial years are presented below. (The Statement of Financial Position's numbers are averages of respective financial years) Statement of Profit or Loss (S'000) 2021 2020 Sales Cost of Goods Sold Gross Profit Operating Expenses Interest Expenses Profit before Tax Tax Expenses (20%) Net Profit 36,000 7,200 28.800 15.900 1.500 11,400 2.280 9.120 30,000 6,000 24,000 15.000 1,000 8,000 1,600 6,400 Statement of Financial Position (S'000) Total Assets Total Liabilities Total Shareholders' Equity (All balances are averages) 2021 2020 45,520 31,400 15,000 10,000 30.520 21,400 Required: (a) Compute the Retum on Equity (ROE) for 2020 and 2021 financial years. (4 marks) (b) Break down the ROE calculated in part (a) by applying the DuPont Analysis into Profit Margin, Total Assets Turnover, and Leverage ratios for 2020 and 2021 financial years. (12 marks) (c) Analyze and comment the results in part (b). Evaluate whether the management has achieved its strategic objective of increasing profit margin and shareholders' retum. (8 marks) Total marks: 24 marks]