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Question 3 (40 marks) You have been hired as an analyst for MBA Bank and your team is working on an independent assessment of Purnama
Question 3 (40 marks) You have been hired as an analyst for MBA Bank and your team is working on an independent assessment of Purnama Sdn. Bhd (PSB). PSB is a company that specializes in the production of freshly imported farm products. Your assistant has provided you with the following data for PSB and their industry. 2020- Ratio 2020 2019 2018 Industry Average Long-term debt 0.45 0.40 0.35 0.35 Inventory Turnover 62.65 42.42 32.25 53.25 Depreciation/Total Assets 0.25 0.02 0.02 0.021 Days' sales in receivables 113 98 94 1301 Debt to Equity 0.75 0.85 0.90 0.88 Profit Margin 0.08 0.07 0.06 0.08 Total Asset Turnover 0.54 0.65 0.70 0.40 Quick Ratio 1.031 1.031 1.03| 1.031 Current Ratio 1.33 1.21 1.15 1.250 Times Interest Earned 0.90 4.38 4.45 4.65) Equity Multiplier 1.75 1.85 1.90 1.881 Required: You are required to prepare interim audit report of PSB for the year 2020. [40 marks]
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