QUESTION 3 Tasik Kecil Berhad has recently applied for a loan from the Secondhand Bank to be used to expand the firm's inventory of soil pipe used in construction and agriculture. Tasik Kecil Berhad's financial statements for the recent year are as follows: Tasik Kecil Berhad Statement of Financial Position As At 31 December 2019 (in RM) Cash Account receivables Inventories 1500 Account payables 22 000 25 000 Accrued expenses 8 000 45 000 Short-term notes payable 39 000 Plant and equipment Less: Accumulated depreciation 116 050 Long-term debt 38 000 22 950 Common stock Retained earnings 310 50 26 550 Total assets 149 550 Total liabilities and owners' equity 149 550 Income Statement For The Year Ended 31 December 2019 (in RM) Net sales (all credit) Less: cost of goods sold 160 000 106.000 Gross profit 54 000 Less: operating expenses 37 000 Interest expense 6 100 43 100 Earnings before taxes 10 900 Income taxes 4360 6 540 Net income a. Calculate the financial ratios for 2019 corresponding to the industry average ratios provided below. Current ratio 1.8 times Return on common equity 9.5% Acid test ratio 0.7 times Gross profit margin 38% Inventory turnover 2.5 times Net profit margin 3.5% Fixed asset turnover 2.5 times Debt ratio 65% Average collection period 37 days Time interest eamed 3.8 times b. Based on your finding in (a) would Tasik Kecil Berhad make the loan? Why or why not?