You are the auditor in Ahmad Bernard Chong (ABC) & Co and ABC has been approached by a potential client to submit a proposal to audit their company. Analytical Procedure (Ratio Analysis) Ratio Analysis Current Ratio Quick Ratio Cash Ratio Net asset turnover Accounts receivable turnover Days to collect receivable Inventory tumover DUTCH LADY MILK INDUSTRIES BERHAD Short-Term Liquidity (Liquidity Ratio) 2018 = Current Assets/Current Liabilities = RM279,549,000/RM292,804,000 = 0.95 times = (Receivables + Current investments +Cash)/Current Liabilities =RM144,490,000/RM292,804,000 = 0.49 times = (Current investments + Cash)/ Current Liabilities = RM32,109,000/RM292,804,000 = 0.11 times 2019 = Current Assets/Current Liabilities = RM314,460,000/RM292,043,000 = 1.08 times = (Receivables + Current investments +Cash)/Current Liabilities = RM174,384,000/RM292,043,000 = 0.60 times = (Current investments + Cash)/ Current Liabilities = RM61,532,000/RM292,043,000 = 0.21 times Liquidity Activity Ratios (Efficiency Ratios) = Net sales/Total Assets = RM1,048,568,000/RM404,802,000 = 2.59 times = Net sales/ Average accounts receivables = RM1,048,568,000/RM112,381,000 = 9.33 times = 365 days/ Accounts receivable turnover = 365/9.33 = 39.12 days = Cost of goods sold/ Inventory = RM632,317,000/RM131,050,000 = 4.83 times = Net sales/Total Assets = RM1,066,662,000/RM443,594,000 = 2.40 times = Net sales/Average accounts receivables = RM1,066,662,000/RM112,852,000 = 9.45 times = 365 days/ Accounts receivable turnover = 365/9.45 = 38.62 days = Cost of goods sold/Inventory = RM661,942,000/RM135,024,000 = 4.90 times