(Solved):   can someone answer this question? Exercise 4 Al-Falah Berhad has approched to Al-Mizan Isl ...

 

can someone answer this question?

Exercise 4 Al-Falah Berhad has approched to Al-Mizan Islamic Bank for a loan of RM 250 million to extend its business. The most recent industry average ratios and Al-Falah Berhad's financial statements are as follows: AL-FALAH BERHAD BALANCE SHEET AS AT 31 DECEMBER 2017 (Millions of Ringgit) Cash Marketable securities Net receivables Inventories Gross Fixed Assets Less: Depreciation TOTAL ASSETS RM 45 Account payable 33 Notes payable 66 Other current liabilities 159 Long term debt 225 Common stock 78 Retained earnings 450 TOTAL LIABILITIES & EQUITY 1 RM 45 45 21 24 114 201 450 AL-FALAH BERHAD INCO STATEM (Million of Ringgit) FOR EAR ENDED 31 DECEMBER 2017 Sales Cost of good sold Gross profit Selling expenses Depreciation expenses Earning before interest and tax Interest expense Earning before taxes Taxes (40%) Net income RM 795 660 135 73.5 12 49.5 4.5 45 18 27 RATIO'S Current ratio Debt ratio Inventory turnover Asset turnover Net profit margin Return on total assets Return on equity INDUSTRY AVERAGE 2 times 20% 8.5 times 3 times 3% 9% 12.9% Compute the relevant ratios for Al-Falah Berhad. Based on the calculated ratios, discuss whether you would accept the loan application made by Al-Falah Berhad. Support your answer with justifications.