FORMATIVE ASSESSMENT $2[93$ MARKS$]$Answer ALL questions.Question One and Two are based on the information provided below for Mia Limited:INFORMATION:In December $2023,$ Mia Limited was planning its financial needs for the coming year. As a first indication, thefirms management required a pro forma Statement of Financial Position as at $31$ December $2024$ to gauge thefinancial needs at that time. The financial condition as at $31$ December $2023$ was reflected in this Statement ofFinancial Position:Statement of Financial Position as at $31$ December $2023$RASSETSNon$-$current assets $451800$Property, plant and equipmentAccumulated depreciationOther non$-$current assets$843000(434600)43400$Current assets $2982400$Inventories $1825400$Accounts receivable $722400$Cash and cash equivalents $434600$Total assets $3434200$EQUITY AND LIABILITIESEquity $992800$Ordinary share capitalRetained income$624000368800$Non$-$current liabilities $240000$Mortgage bond $240000$Current liabilities $2201400$Accounts payableOther current liabilities$6123001589100$Total equity and liabilities $3434200$ADDITIONAL INFORMATION:QUESTION ONE $(25$ Marks$)$REQUIRED$1\mathrm{.}1$ Use the information provided to Prepare the pro forma Statement of Financial Position as at $31$ December$2024.(20)1\mathrm{.}2$ Discuss the purpose of projected financial statements in business planning and decision$-$making, highlightingtheir significance for managerial decision$-$making, investor relations, and strategic planning. $(5)$Operations for the following year were projected using the following working assumptions toplan the financial results: Sales were forecast at R$20900000.$ Capital expenditures were scheduled at R$42000$ for a delivery van and R$72000$ forwarehouse improvements. Depreciation is expected to be R$62800$ for the year. Inventories, Accounts receivable and Accounts payable are estimated to be $10\%,4\%$and $6\%$ of sales respectively. Cash balances are desired to be no less than R$300000.$ Net profit after tax is expected at a level of $0\mathrm{.}19\%$ of sales. Dividends for the year were estimated at R$25000.$ A mortgage loan repayment of R$20000$ is expected to be made. Other current liabilities will be allowed to fluctuate with seasonal needs.QUESTION TWO $(18$ Marks$)$

Using the information provided above, answer the following questions:

$2\mathrm{.}1$ Calculate the following ratios for the year ending $2023$:

$2\mathrm{.}1\mathrm{.}1$ Current Ratio $(4)$

$2\mathrm{.}1\mathrm{.}2$ Debt to equity ratio $(3)$

$2\mathrm{.}1\mathrm{.}3$ Inventory turnover ratio $(4)$

$2\mathrm{.}1\mathrm{.}4$ Return on equity $(3)$

$2\mathrm{.}1\mathrm{.}5$ Acid test ratio $(3)$

$2\mathrm{.}1\mathrm{.}6$ Capital gearing ratio $(3)$

$2\mathrm{.}2$ Explain how the company's decision to maintain a cash balance of at least R$300,000$ affects its liquidity

position.