Case Study ABC Inc. is a Corporation with a focus on Garment and textile manufacturing in the UAE. They are now looking to finance their new project, are looking for a bank to give them a loan. Calculate the following ratios for both 2018 and 2019, interpret and analyze them: a) Current Ratio b) Acid Test Ratio c) Times Interest Earned Ratio d) Debt Ratio e) Accounts Receivable Turnover f) Inventory Turnover g) Days Sales in Inventory h) Average Collection Period [8 points] Based on the ratios calculated above, Can you conclude if any bank would easily give a loan to you? Justify your answer. [2 points] Standalone statement of comprehensive income Year ended 31 December 2019 Note AED 12 967,215,339 Revenue Cost of sales Gross profit 13 (862,141,258) 105,074,081 Administrative and selling expenses 14 (30,183,413) Other income 15 978,095 Reversal of (provision for) impairment of trade receivables 4,167,783 Operating profit 80,036,546 Finance cost 18 (1,097,922) 1,146 Finance income 18 Finance cost-net 18 (1,096,776) Profit for the year 78,939,770 Other comprehensive income for the year Total comprehensive income for the year 78,939,770 2018 AED 813,481,889 (722,094 232) 91,387,657 (27,340,230) 11,221,861 (7.716.272) 67,553,016 (545,088) 3,548 (541,540) 67,011,476 67,011,476 Standalone statement of financial position ASSETS Non-current asset Property and equipment Investments in subsidiaries Current assets Inventories Trade and other receivables Due from related parties Loan to related parties Cash and bank balances Total assets EQUITY AND LIABILITIES EQUITY Share capital Retained earnings Total equity LIABILITIES Non-current liabilities Provision for employees' end of service benefits Current liabilities Trade and other payables Due to a related party Bank borrowings Total liabilities Total equity and liabilities Note 4 2.2 56117 11 11 10 11 17 As at 31 December 2019 2018 AED AED 1,012,984 1,213,595 1,343,582 2,356,566 1,213,595 5,529,691 179,413,089 193,441,503 121,670,892 52,580,863 80,115,253 33,455,659 26,318,739 24,349,497 407,517,973 309,357,213 409,874,539 310,570,808 3,900,000 3,900,000 358,743,239 279,803,469 362,643,239 283,703,469 355,785 252,073 355,785 252,073 1,123,523 6,079,568 26,729,064 20,415,438 19,022,928 120,260 46,875,515 26,615,266 47,231,300 26,867,339 409,874,539 310,570,808