Question: As part of the analytical procedures of Mahogany Products Inc., you perform calculations of the following ratios: REQUIRED For each of the preceding ratios: a.

As part of the analytical procedures of Mahogany Products Inc., you perform calculations of the following ratios:

REQUIRED
For each of the preceding ratios:
a. State whether there is a need to investigate the results further and, if so, the reason for further investigation.
b. State the approach you would use in the investigation.
c. Explain how the operations of Mahogany Products Inc. appear to differ from those of the industry.

Industry Averages Mahogany Products Inc. 0 2. Days to collect recelvables 3. Days to sell Inventory 4. Purchases dvided by accounts payable 5. Inventory divided by current assets 6.Operating eamings dvded by tanglble assets 7. Operating eamings dvlded by net sales 8. Gross margin percentage 9. Eamings per share 0 1

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a b Ratio number 1 Need for investigation Yes Reason for Investigation Current ratio has decreased from previous year end and is significantly lower than the industry average This could indicate a sho... View full answer

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