QUESTION 2 Use the information given below to answer the following questions. Where applicable, express answers to ratios to two decimal places 2.1 Will the company be able to fund its short-term obligations if inventories are not sold? Motivate your (3 marks) answer. 2.2 The directors are considering financing the expansion of the company by taking out a long-term loan. With the use of the relevant ratios advise whether this would be appropriate for the company. (6 marks) STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2021 Assets R Non-current assets 783 000 Current assets: 606 600 Inventories 203 000 Accounts receivable 277 800 Cash and cash equivalents 125 800 Total assets 1389 600 Equity and liabilities Shareholders' equity 628 900 Non-current liabilities (15%) 378 800 Current liabilities 381 900 Accounts payable 100 800 Other current liabilities 281 100 Total equity and liabilities 1389 600 Note: 1. Inventories as at 31 December 2020 amounted to R185 000 2 All purchases and sales are on credit 3. Credit terms to debtors are 30 days 4. Credit terms of 3/10 net 90 days are granted by creditors 5 Dividends for the year amounted to R139503