Question 3b
Marking Guide
(i) | ½ mark per ratio calculation per year. | |
| – gross margin | ||
| – operating margin | ||
| – inventory days | ||
| – inventory turnover | ||
| – receivable days | ||
| – payable days | ||
| – current ratio | ||
| – quick ratio | 5 | |
| (ii) | up to 1 mark per well described audit risk and up to 1 mark per well explained audit response | |
| – receivables valuation | ||
| – inventory valuation | ||
| – depreciation of plant and machinery | ||
| – management manipulation of profit to reach bonus targets | ||
| – disclosure of bank loan of $1 million | ||
| – going concern risk | 10 | |
| max marks | 15 | |