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Explain the implications for the audit

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Reference no: EM132669915

The following financial ratios have been calculated for Nova Ltd for the year ended 30 June 2008:

Ratio-

                           Actual results               Budgeted results           Previous year           Industry average

Current ratio       1.97                               1.92                           1.87                            1.92

Quick ratio           1.06                             1.06                             1.06                           1.11

Inventory ratio      4.21                              4.91                           4.86                             4.76

Net profit ratio        0.05                             0.03                           0.03                             0.03

Gross margin           0.65                              0.59                           0.61                             0.61

Problem 1: Provide four (4) possible explanations for the results of the various ratios for Nova Ltd and explain their implications for the audit

Reference no: EM132669915

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