(Auto-Graded) Professional Application, Question 4.15 You are the audit senior of Rhino & Co. and you are planning the audit of Kaine Construction Co. for the year ended M meeting with the finance director. He has provided you with the following notes of his meeting and financial statemen Kaine has had a difficult year; house prices have fallen and, as a result, revenue has dropped. In order to address t in inventory where the selling price may be below cost. Management needs to meet a target profit before interest and taxation of $0.5 million in order to be paid their annu In addition, to try to improve profits, Kaine changed its main supplier to a cheaper alternative. This has resulted in To help with operating cash flow, management borrowed $1 million from the bank during the year. This is due for re 2020 2019 Gross margin 46% 42% Operating margin 6% 10% Inventory turnover 2.4 4.5 Receivable days 89 days 52 days Payable days 73 days 45 days Current ratio 2:2 4:4 Quick ratio 1:5 3:3