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Issues in Financial Accounting - PDF

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Added on  2021-06-14

Issues in Financial Accounting - PDF

   Added on 2021-06-14

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Running head: AUDITING AuditingName of the StudentName of the UniversityAuthors NoteCourse ID
Issues in Financial Accounting - PDF_1
AUDITING1Table of ContentsAnswer to Requirement A:.........................................................................................................2Answer to requirement B:..........................................................................................................4Reference List:...........................................................................................................................6Appendix: Ratio Analysis..........................................................................................................7
Issues in Financial Accounting - PDF_2
AUDITING2Answer to Requirement A: The analytical procedure are carried out as the overall review of the financialstatements following the end of the audit in order to determine to considered whether theorganization is consistent with the views of the auditor (Scott 2015). The analytical reviewrefers to the auditing process that is based on the ratios among the accounts and makes anattempt to identify the significant changes, restricted review in order to provide some kindassurance to the interested parties relating to the reliability of the financial data. As evident in the present situation of Biotechnology Ltd the company is lookingforward to expand its future in order to maintain the regular daily operations. To review thefinancial performance of the Biotechnology Ltd an analytical review is carried out with thehelp of ratio analysis (Schaltegger and Burritt 2017). The gross margin ratio is computed tounderstand the gross profit in terms of dollars generated based on the net sales ofBiotechnology Ltd. As evident from the gross profit ratio Biotechnology Ltd over the lastthree financial year have reported a relatively strong gross profit margin. The gross profit of the company stood positively by using historical information of2016 and 2017 while the forecast information of 2018 reported a positive gross profit marginof 51.5%. This represents that Biotechnology Ltd has lower costs of goods sold than therevenues reported (Warren and Jones 2018). The net profit margin though stood negativelyfor Biotechnology Ltd as in 2017 the net profit margin stood -25.92% while the forecastedperiod 2018 of -35.14%. The primary reason for negative net profit margin is because ofunfortunate venture and the expansion expenditure that contributed negatively to net profitmargin of Biotechnology Ltd. The cash flow margin is regarded as the most commonly used profitability ratios. Theratio helps in measuring the sum of money that is generated from the operations based on
Issues in Financial Accounting - PDF_3

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