You are an industry analyst working for a bank. The financial information provided below is for the two companies operating in same industry. All sales in both companies are on credit. Statement of profit or loss and other comprehensive income for year ended 30 June 2020 Tango (Pty)Ltd Cash (Pty) Ltd R R 8 200 000 6 300 000 Turnover(sales) Less: Variable cost (4 420 000) Cost of sales (6 430 000) (6 230 000) (200 000) 1 770 000 (840 000) (4 160 000) (260 000) Selling Contribution 1 880 000 Less: Total fixed cost (excl. interest) (690 000) Administration (140 000) Production (510 000) Selling (180 000) (600 000) (60 000) 930 000 (100 000) EBIT (40 000) 1 190 000 (90 000) Interest expense Earning before tax (EBT) 830 000 1 100 000 Taxation (249 000) (330 000) Profit after tax (EAIT) 581 000 770 000 Dividends (174 000) (288 000) R 482 000 Profit for the year R 407 000 Statement of financial position at 30 June 2020 Tango (Pty) Cash (Pty) Ltd Ltd R R ASSETS Non-current assets Property, plant and equipment carrying amount 6 200 000 8 630 000 Current assets: 2 760 000 2 970 000 Inventory 1 340 000 1 060 000 Trade and other receivables 1 360 000 1 820 000 Cash and cash equivalents 60 000 90 000 Total current assets 8 960 000 11 600 000 EQUITY AND LIABILITIES Equity 6 600 000 8 700 000 3 850 000 5 150 000 Share capital Retained earnings 2 750 000 3 550 000 Non-current liabilities 600 000 700 000 Long-term loan Current liabilities 1 760 000 2 200 000 Bank overdraft 220 000 230 000 1 070 000 1 460 000 Trade and other payables Other current liability 460 000 520 000 Total equity and liabilities 8 960 000 11 600 000 You are required Calculate the following ratios for both Tango (Pty) and Cash (Pty), do not use average ratios: 1.1 Debt/Equity ratio 1.2 Current ratio 1.3 Acid test ratio 1.4 Inventory turnover (4) (4) 1.5 Debtor collection period 1.6 Gross margin on sales Return On Equity ROE using Dupont analysis (4) (7) 1.7