You are provided with the financial statement below: Hardware computer Ltd Income statement for the year ended 28 February 2021 R Sales 1 607 500 Less Cost of sales 1 353 000 Gross profit 254 500 Less operating expenses 184 500 EBIT 70 000 Interest expense 24 500 45 500 Earnings before tax Less tax@28% Earning after tax (EAT) 12 740 32.760 Hardware Computer statement of financlal position as at 28 February 2021 Assets R Non-current assets 272 500 Current assets Inventories 241 500 Account receivables 336 000 Cash & cash equivalent 97 500 Total Assets 947 500 Equities and Liabilities Ordinary share capital Non-current liabilities 361 000 Loan: Standard bank 256 500 Current liabilities 213 000 Accounts payable Bank overdraft 117 000 Total Equities and Liabilities 947 500 rid-2261586_1/courses/BEC225_2021/BEC%20225%20Indiv The industry averages Indicate the following: Ratio Industry average Current ratio 2 Quick ratio 1 35 days Average collection period 40 days Average payment period Inventory 5.6x turnover 1.2 Net profit margin ROI 10.0% ROE 9.0% Debt ratio 60.0% 5 Time interest earned ratio Required 2.1 Calculate and interpret the basic liquidity, activity, profitability, debt ratios of the firm (assume a 360-day year where applicable) [20 Marks] 22 Comment on the sustainability of the financial performance of the firm, and indicate if the firm should expand capacity or not. [5 Marks]