QUESTION 2 [12 MARKS] Study the information provided below and answer the following questions. INFORMATION Ontdekking Ondernemings is a leading manufacturer of domestic appliances, catering primarily to the Southern African market. Presently, the company is embarking on an expansion journey into the African Continental Free Trade Area (AfCFTA). The Chairman of the Board of Directors is pleased with the company's performance for the fiscal year ending 31 December 2023, noting consistent improvement over recent years. However, amidst this progress, the Finance Director expresses concern regarding shareholders' satisfaction with the company's performance in comparison to industry peers. Despite the company's enhanced performance, there's a worry that it might not meet the expectations set by competitors within the same sector. It is noteworthy that the sector's average return on equity (ROE) for the year ending 31 December 2023 stands at 12.5%, setting a benchmark against which Ontdekking Ondernemings' performance is evaluated. The excerpts of financial statements of Ontdekking Ondernemings are as follow: Ontdekking Ondernemings Statement of Profit or Loss for the year ended 31 December 2023 2023 2022 R R Revenue 125000000 | 119 500 000 Cost of sales (103600 000) | (101 575 000) Gross profit 21400 000 17 925 000 Operating costs (11 600 000) (11 233 000) Finance costs (3 600 000) (3600 000) Profit before tax 6 200 000 3092 000 Corporate tax (1736 000) 865 760 Profit for the year 4 464 000 2226 240 Cost of sales (103 600000) | (101575 000) Gross profit 21400 000 17 925000 Operating costs (11 600 000) (11 233 000) Finance costs (3 600 000) (3 600 000) Profit before tax 6 200 000 3092 000 Corporate tax (1736 000) 865760 Profit for the year 4 464 000 2226 240 Ontdekking Ondernemings Statement of Financial Position as at 31 December 2023 2023 2022 R R Assets Non-current assets Property 16 200 000) | 16 200 000) Owned plant 25200000 | 25200000 Leased plant 24 400000 | 20500000 65800000 | 61900000 Current assets 32800000 [ 28000000 Total asset 98600 000 | 89 900 000 Equity and Liabilities Equity Shareholders' equity shares of R1 each 18000 000 | 18 000 000 Property revaluation surplus 8000 000 2 000 000 Retained earnings 21200000 | 20 000 000 47 200 000 | 40 000 000 Non-current liabilities 10% loan notes 20000000 | 16600000 Finance lease obligations 12800 000 | 12 800 000 32800000 | 29 400 000 Current liabilities Finance lease obligations 4200 000 4200 000 Other current liabilities 14400 000 | 16 300 000 18600 000 | 20 500 000 Total equity and Liabilities 98600 000 | 89 900 000 REQUIRED: 2.1. Calculate Return on Equity of Ontdekking Ondernemings for 2022 and 2023. Comment on the results obtained. ) 2.2. Using the DuPont model, analyse and comment on the impact of Ontdekking Ondernemings's operational efficiency, asset utilisation, and financial leverage on the return on shareholders' equity for the year ended 31 December 2023 (round off each part of the analysis to four decimal places). It is important that you indicate whether the business has become more efficient and/or riskier over the 2023 financial year and make actionable recommendations to the management of Ontdekking Ondernemings in terms of improving the return on equity going forward. @)