Bond Ltd manufactures clothing out of its factory in Geelong, Victoria. Ben has calculated the following as:

	Industry Average	Bond Ltd
	2023	2022	2023	2022
Current Ratio	2.2	2.9	2.5	2.1
Receivables turnover	7.1	6.7	5	6.2
Inventory turnover	5.8	5.3	4.1	5
Return on total assets	5.50%	4.50%	8.10%	7.80%
Net profit ratio	0.05	0.04	0.025	0.025
Gross margin	0.19	0.21	0.19	0.16

Question 1

The conclusions that you can draw from the ratios calculated by Jack and the possible audit risks for Bond Ltd that Jack will need to investigate further.

Answer rating: 100% (QA)

Based on the financial ratios provided for Bond Ltd and the industry average we can draw the following conclusions and identify potential audit risks ... View the full answer