audit please quickly i will give you a thumb Question 3Auditors have calculated some ratios and carried out trend analysis when performing audit of oneof their client's financial statements. The following presents the information.PROBIO PHARMACEUTICAL RATIO ANALYSISRatiosCurrent RatioQuick RatioDays' sales in receivablesDays' sales in inventoryDebt/equity ratioTimes interest earnedSales growth over past yearCurrent2021(i)(ii)(iii)(iv)(v)1.850.85 0.931.32020 2019 20181.89 2.28 2.51109152 165 924.85 4.88 1.253%1.3296 100Observation / Accounts at riskPresent your answers in the following structure:1.7672691.131.45 5.89 6.35% 2% 4%Industry2.13Required:a) Draw major observation from the financial analysis shown in the table. Be specific inidentifying specific account balances that have a high risk of material misstatement.1.469841.254.56%b) State how your risk analysis in part (a) will be used in planning the audit.

The analysis of account balences will be done in trend analysis is used by auditor in order to…

Question 3 Auditors have calculated some ratios and carried out trend analysis when performing audit of or of their client's financial statements. The following presents the information. PROBIO PHARMACEUTICAL RATIO ANALYSIS Ratios Current Ratio Quick Ratio Days' sales in receivables Days' sales in inventory Debt/equity ratio Times interest earned Sales growth over past year Current 2021 2020 2019 2018 Industry 1.85 1.89 2.28 2.51 0.85 0.93 1.32 1.76 109 96 100 152 165 92 4.85 4.88 1.3 1.45 5.89 6.3 3% 5% 2% 4% 72 69 1.25 1.13 2.13 1.4 69 84 1.25 4.5 6% Required: a) Draw major observation from the financial analysis shown in the table. Be specific

Question 3 Auditors have calculated some ratios and carried out trend analysis when performing audit of or of their client's financial statements. The following presents the information. PROBIO PHARMACEUTICAL RATIO ANALYSIS Ratios Current Ratio Quick Ratio Days' sales in receivables Days' sales in inventory Debt/equity ratio Times interest earned Sales growth over past year Current 2021 2020 2019 2018 Industry 1.85 1.89 2.28 2.51 0.85 0.93 1.32 1.76 109 96 100 152 165 92 4.85 4.88 1.3 1.45 5.89 6.3 3% 5% 2% 4% 72 69 1.25 1.13 2.13 1.4 69 84 1.25 4.5 6% Required: a) Draw major observation from the financial analysis shown in the table. Be specific

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 83E

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