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Identify three ratios

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Question - You are the senior in charge of the audit of Hafey Manufacturing Ltd. The information below has been prepared to assess the going concern of the company at the planning stage of the audit and to identify other issues that may impact on audit risk.

Ratio

Unaudited 2021 figures

2020

2019

2018

Inventory turnover

1.35

1.70

2.50

3.12

Quick asset ratio

0.90

1.30

1.68

1.67

Current ratio

1.67

2.14

2.33

2.23

Accounts Receivable turnover

3.53

5.12

3.81

5.02

Operating profit to net sales

0.11

0.13

0.15

0.17

Required - Identify three ratios above that may indicate going concern risks or increased risk of material misstatement in the accounts. For each of the 3 ratio's you have identified, document the account(s) and assertions.

Reference no: EM133002299

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