Carry out preliminary analytical procedures based on the

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Reference no: EM13576001

Carry out preliminary analytical procedures based on the draft financial information provided and identify any issues which you believe need to be taken into account in the development of the audit plan.


2010

2009

Current ratio

0.28

0.19

Quick asset ratio

0.096

0.069

Inventory turnover ratio

2.63

3.56

Gross profit ratio

0.46

0.48

Net profit ratio

0.19

0.18

Return on total asset

0.074

0.078

Debt to equity

1.75

2.434

Times interest earned

3.84

5.39

common-size statement


2010

2009

sales

100

100

Less: cost of sales

53.7

51.9

Gross profit

46.3

48.1

Less: expense



Direct expense

10.9

14.5

Indirect expense

16

15.3

Net profit

19.3

18.3

basic information about the company are as follow:

Gourmet Pty Ltd manufactures, supplies and retails quality gourmet cooking ingredient to the home kitchen and samll restaurant markets. in addition, they hace opened a number of small cafes where customers can sample the products.has acuqisition of a number of smaller competitors over the pas couple of years in order to expand its business.the company's management team is experienced, and all having been with the company more than 5 years.installed a new computer system in August 2009, the old system and new system run paraller for three month, new system allows each outlet to process its own stocktake resluts, account payable invoice and payments, management has experienced no major problems with new system to date.

Reference no: EM13576001

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