Please explain Proper Analytical Procedures for auditors. Why financial ratios are important for planning the analytical procedures as part of the acquisition and payment cycle at the company:

Gross margin: (revenues-cost of sales)/revenues

Changes in cost of goods sold on a percentage basis, yearly comparisons

Inventory Turnover: (cost of goods sold/ending inventory)

Number of days sales in inventory: (365/inventory turnover)

Accounts payable turnover: (purchases/average accounts payable)

Days outstanding in accounts payable: (365/accounts payable turnover)

Accounts payable/current liabilities Identify other relationships or trends that are relevant as part of the planning analytics.

Please discuss the ratios and auditor choices.