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You have been hired as an analyst for Bank WA and your team is working on an independent assessment of a firm that specializes in

You have been hired as an analyst for Bank WA and your team is working on an independent assessment of a firm that specializes in the production of freshly imported farm products from New Zealand. Your assistant has provided you with the following data about the company and its industry.

Ratio

2019

2018

2017

2019-

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

0.014

0.018

0.015

Days sales in receivables

113

98

94

130.25

Debt to Equity

0.75

0.85

0.90

0.88

Profit Margin

0.082

0.07

0.06

0.12

Total Asset Turnover

0.54

0.65

0.70

0.40

Quick Ratio

1.028

1.03

1.029

1.031

Current Ratio

1.33

1.21

1.15

1.25

Interest coverage Ratio

0.9

4.375

4.45

4.65

Q) If current liabilities of the company was 2.5 million in 2019 and daily cash expenditure was 0.011million, using the data provided in the table, calculate the defensive interval ratio.

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