The following financial ratios have been calculated for Nova Ltd for the year ended 30 June...

 

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The following financial ratios have been calculated for Nova Ltd for the year ended 30 June 2008: Actual Budgeted Previous year Industry average results results Current ratio 1.97 1.92 1.87 1.92 Quick asset ratio 1.06 1.06 1.06 1.11 Inventory turnover 4.21 4.91 4.86 4.76 Net profit ratio 0.05 0.03 0.03 0.03 Gross margin 0.65 0.59 0.61 0.61 Required: Provide four (4) possible explanations for the results for the various ratios for Solar Ltd and outline their implications for the audit. (10 marks) The following financial ratios have been calculated for Nova Ltd for the year ended 30 June 2008: Actual Budgeted Previous year Industry average results results Current ratio 1.97 1.92 1.87 1.92 Quick asset ratio 1.06 1.06 1.06 1.11 Inventory turnover 4.21 4.91 4.86 4.76 Net profit ratio 0.05 0.03 0.03 0.03 Gross margin 0.65 0.59 0.61 0.61 Required: Provide four (4) possible explanations for the results for the various ratios for Solar Ltd and outline their implications for the audit. (10 marks) The following financial ratios have been calculated for Nova Ltd for the year ended 30 June 2008: Actual Budgeted Previous year Industry average results results Current ratio 1.97 1.92 1.87 1.92 Quick asset ratio 1.06 1.06 1.06 1.11 Inventory turnover 4.21 4.91 4.86 4.76 Net profit ratio 0.05 0.03 0.03 0.03 Gross margin 0.65 0.59 0.61 0.61 Required: Provide four (4) possible explanations for the results for the various ratios for Solar Ltd and outline their implications for the audit. (10 marks) The following financial ratios have been calculated for Nova Ltd for the year ended 30 June 2008: Actual Budgeted Previous year Industry average results results Current ratio 1.97 1.92 1.87 1.92 Quick asset ratio 1.06 1.06 1.06 1.11 Inventory turnover 4.21 4.91 4.86 4.76 Net profit ratio 0.05 0.03 0.03 0.03 Gross margin 0.65 0.59 0.61 0.61 Required: Provide four (4) possible explanations for the results for the various ratios for Solar Ltd and outline their implications for the audit. (10 marks)

Answer rating: 100% (QA)

Current ratio current assets current liabilities Healthy ideal current ratio is 21 Here Nova companys current ratio is 1971 which is close to the idea... View the full answer