Based on these ratios outline the apparent trends and changes in these ratios, the key risk areas for the audit and the matters that will have to be addressed in the audit plan. Give examples of relevant assertions and at least one audit procedure for each assertion.

What are the trends? Are these positive or negative from a financial management perspective? Are any movements consistent with the over-statement of profit and assets, or the under-statement of expense and liabilities? Summarise the main risks. What audit objectives (e.g., occurrence/existence) are relevant? What audit procedures are useful?

Ratio's to be considered
Profitability Ratios	2020	2021	2022
Net Profit Margin =(Net profit after tax/Sales)	9.8%	12.3%	8.2%
Return on Assets= (Net profit after tax/Total assets)	6.5%	9.1%	6.4%
Efficiency (or Asset Management) Ratios
Total Asset Turnover Ratio=(Sales/Total assets)	65.9%	74.0%	77.9%
Current Asset Turnover Ratio=(Sales/Total Current assets)	167.9%	173.7%	198.3%
Liquidity Ratios
Current Ratio (Working Capital Ratio) =(Total Current assets/TotalCurrent liabilities)	235.3%	212.2%	273.2%
Quick Ratio 1=(Total Current assets - inventory - prepayments)/Current liabilities	152.0%	101.1%	128.6%
Quick Ratio 2=(Current assets - inventory - prepayments - receivables)/Current liabilities	151.0%	100.8%	128.1%
Financial Structure Ratios
Debt/Equity Ratio=Debt/Equity	74.5%	75.0%	61.0%
Equity Ratio=Equity/Total assets	57.3%	57.2%	62.1%

Vertical Analysis
ANSELL LIMITED
Balance Sheet Data Entry in US$m
YEAR ENDED 30 JUNE
Account Details	2020	2021	2022
Current Assets
Cash and cash equivalents	16.7%	8.8%	8.2%
Trade and other receivables	7.4%	10.0%	8.0%
Derivative financial instruments	0.2%	0.1%	0.7%
Inventories	13.9%	22.3%	20.8%
Other current assets	1.0%	1.4%	1.5%
Total Current assets	39.2%	42.6%	39.3%
Non - current assets
Trade and other receivables	0.2%	0.1%	0.1%
Derivative financial instruments	0.1%	0.0%	0.1%
Investments	0.5%	0.8%	0.7%
Property,plant and equipments	10.3%	10.8%	11.9%
Right-of-use assets	2.3%	2.2%	2.3%
Intangible Assets	43.5%	39.3%	41.9%
Deffered tax assets	2.8%	3.0%	2.6%
Retirement benefit assets	0.1%	0.1%	0.1%
Other non-current assets	1.1%	1.0%	1.1%
Total non-current assets	60.8%	57.4%	60.7%
Total assets	100.0%	100.0%	100.0%
Current liabilities
Trade and other payables	10.4%	14.7%	11.0%
Derivative financial instruments	0.3%	0.2%	0.2%
Interest bearing liabilities	2.0%	0.0%	0.0%
Lease liabilities	0.7%	0.8%	0.7%
Provisions	2.7%	3.4%	2.0%
Current tax liabilities	0.5%	1.0%	0.4%
Total current liabilities	16.7%	20.1%	14.4%
Non-current liabilities
Trade and other payables	0.1%	0.0%	0.0%
Derivative financial instruments	0.0%	0.0%	0.0%
Interest bearing liabilities	19.2%	16.5%	17.0%
Lease liabilities	1.6%	1.6%	1.6%
Provisions	0.4%	0.4%	0.3%
Retirement benefit obligations	0.6%	0.6%	0.3%
Deferred tax liabilities	3.1%	2.6%	3.2%
Other non-current liabilities	1.0%	1.0%	0.9%
Total non-current liabilities	26.0%	22.8%	23.5%
Total liabilities	42.7%	42.8%	37.9%
Net assets	57.3%	57.2%	62.1%
Equity
issued capital	32.9%	28.1%	29.7%
Reserves	-4.9%	-3.1%	-5.7%
Retained profits	28.8%	31.7%	37.6%
Total equity attributable to Ansell Limited shareholders	56.8%	56.7%	61.6%
Non-controlling interests	0.5%	0.5%	0.5%
Total equity	57.3%	57.2%	62.1%

Horizontal Analysis
ANSELL LIMITED
Balance Sheet Data Entry in US$m
YEAR ENDED 30 JUNE
Account Details	2020	2021	2022
Current Assets
Cash and cash equivalents	100.0%	58.7%	50.4%
Trade and other receivables	100.0%	151.3%	111.3%
Derivative financial instruments	100.0%	68.4%	301.8%
Inventories	100.0%	179.7%	153.3%
Other current assets	100.0%	149.0%	151.8%
Total Current assets	100.0%	121.4%	102.4%
Non - current assets
Trade and other receivables	100.0%	36.6%	41.5%
Derivative financial instruments	100.0%	61.1%	105.6%
Investments	100.0%	184.0%	151.3%
Property,plant and equipments	100.0%	117.3%	119.0%
Right-of-use assets	100.0%	110.1%	103.1%
Intangible Assets	100.0%	101.1%	98.5%
Deffered tax assets	100.0%	121.3%	95.0%
Retirement benefit assets	100.0%	133.3%	114.3%
Other non-current assets	100.0%	103.8%	101.1%
Total non-current assets	100.0%	105.6%	102.3%
Total assets	100.0%	111.8%	102.4%
Current liabilities
Trade and other payables	100.0%	158.2%	108.5%
Derivative financial instruments	100.0%	76.1%	92.5%
Interest bearing liabilities	100.0%	0.0%	0.0%
Lease liabilities	100.0%	113.7%	99.5%
Provisions	100.0%	139.3%	73.9%
Current tax liabilities	100.0%	232.5%	85.4%
Total current liabilities	100.0%	134.6%	88.2%
Non-current liabilities
Trade and other payables	100.0%	50.0%	43.8%
Derivative financial instruments	100.0%	0.0%	0.0%
Interest bearing liabilities	100.0%	96.1%	90.7%
Lease liabilities	100.0%	109.4%	105.1%
Provisions	100.0%	130.1%	93.5%
Retirement benefit obligations	100.0%	105.4%	55.0%
Deferred tax liabilities	100.0%	94.4%	105.0%
Other non-current liabilities	100.0%	113.1%	97.1%
Total non-current liabilities	100.0%	97.9%	92.5%
Total liabilities	100.0%	112.2%	90.9%
Net assets	100.0%	111.5%	110.9%
Equity
issued capital	100.0%	95.4%	92.3%
Reserves	100.0%	70.4%	118.9%
Retained profits	100.0%	122.8%	133.5%
Total equity attributable to Ansell Limited shareholders	100.0%	111.5%	110.9%
Non-controlling interests	100.0%	112.6%	115.1%
Total equity	100.0%	111.5%	110.9%