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 RM 45 Account payable RM 45 33 Notes payable 45 66 Other current liabilities 21 159 Long term debt 24 Gross Fixed Assets 225 Common stock 114 Less: Depreciation 78 Retained earnings 201 TOTAL ASSETS 450 TOTAL LIABILITIES & EQUITY 450 AL-FALAH BERHAD INCOME STATEMENT FOR YEAR ENDED 31 DECEMBER 2017 (Million of Ringgit) Sales RM 795 Cost of good sold 660 Gross profit 135 Selling expenses 73.5 Depreciation expenses 12 Earning before interest 49.5 and tax Interest expense 4.5 Earning before taxes 45 Taxes (40%) 18 Net income 27 RATIO'S INDUSTRY AVERAGE Current ratio Debt ratio Inventory turnover Asset turnover Net profit margin Return on total assets Return on equity 20% 2 times 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.