Based on your computation in part (a) give your recommendation whether the bank will or will not grant the loan to Mr Nobitha.

Industry Average Ratio this year Current Ratio 1.78 Acid Test Ratio 1.55 Inventory Turnover 7.41 Average Collection Period 22.8 Non-Current Asset 1.54 Turnover Total Asset Turnover 0.89 Debt 75% Times Interest Eamed Net Profit Margin 4.70% Return on Assets 4.60% Return on Common Equity 20.70% 6.4 ii. You were assigned the task of analysing Mr Nobitha's loan request. Based on the given information, answer the following questions. a. Compute the financial ratios for both years, and using the average industry evaluate the firm in the following category: Liquidity Asset Management Debt Management Profitability b. Based on your computation in part (a) give your recommendation whether the bank will or will not grant the loan to Mr Nobitha. Part 2 Financial ratios may be used to understand a company's financial position, but anyone who works with these ratios ought to be aware of the limitations involved in their use. With your own words and understanding discuss (with relevant example) any 2 (TWO) limitations that may be encountered in computing and interpreting financial ratios. iv. ***End of