Question 2: Perform an analytical review (ratio analysis) comparing the financial statements for 2022 and 2021 and identify the key financial ratios and the key accounts that the audit team should pay greater attention to. Explain why.

Dream Rock Watches Ltd Statement of Financial Position as on 30 June Assets Current assets Cash Trade receivables Inventories Other receivables Total current assets Non-current assets Property, plant and equipment Intangible Assets Total non-current assets Total assets Liabilities Current liabilities Trade payables Bank overdraft Other Short term bank loans Expenses payables Total current liabilities Non-Current Liabilities Long term loan from Bank Total liabilities Net Assets! (Liabilities) Equity Share Capital Reserves Accumulated prot/ losses Total e I ui 2022 (Forecasted) S '000 .h. 0] G M G .5. G G 00 O 1,300 1,700 2,700 2,300 50 350 2 700 Dream Rock Watches Ltd Income Statement for the year ended 30 June 2022 2021 (Forecasted) $ '000 $ '000 Sales Revenue 3,000 3600 Other income 300 100 Total Income 3,300 3,700 Expenses Cost of goods sold 1400 1500 Salaries 620 800 Depreciation and Amortization expense 100 100 Professional fees 125 146.5 Other expenses 200 250 Finance costs 800 430 Rent expense 215 260 Total Expenses 3.460 3,487 Profit (Loss) before income tax expense -160 213.5 Income tax expense 0 0 Profit (Loss) after income tax expense -160 213.5