You work for a global shoe company called Shoes & Co$,$ and you are required to analyse the impact of the current supply chain design. Use the strategic profit model to perform the required analysis.

The company$$s financials are provided below with a $12\%$ corporate tax rate. Answer the following questions:

$1\mathrm{.}1$ Calculate the current ROA and ROE of the company. $(15)$

$1\mathrm{.}2$ You believe you could reduce transportation cost by $10\%$ if you had management buy in calculate what a $10\%$ reduction would result in$.(15)$

$1\mathrm{.}3$ Analyse findings in $1\mathrm{.}1$ and $1\mathrm{.}2(10)$

SHOES AND CO $($PTY$)$ LTD

STATEMENT OF PROFIT & LOSS FOR THE YEAR ENDED $31$ DECEMBER $2022$

SALES $299,990$

COST OF SALES $179,990$

GROSS PROFIT $120,000$

TRANSPORTATION $29,993$

WAREHOUSE COSTS $7,993$

INVENTORY CARRYING COSTS $3,993$

OTHER OPERATING COSTS $14,993$

TOTAL OPERATING COSTS $56,972$

Earnings before interest & Tax $63,028$

Interest $3,000$

Taxes $9,004$

Net Income $51,024$

SHOES AND CO $($PTY$)$ LTD

STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED $31$ DECEMBER $2022$

Assets

Cash $20,000$

Account Receivables $30,000$

Inventory $15,000$

Total current assets $65,000$

Net fixed assets $120,000$

Total assets $185,000$

Liabilities

Current Liabilities $65,000$

Long$-$term debt $35,000$

Total liabilities $100,000$

Shareholder equity $400,000$

Total liabilities & equity $500,000$