The figures below are a summary of an analytical review of the draft financial statements...
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Accounting
The figures below are a summary of an analytical review of the draft financial statements of Harsh Ltd. The review was carried out at the planning stage and the comparison was made against the original budget for the financial year.
Based on the results of this review indicate whether or not you would investigate or accept the reason for any differences
Actual
Budget
Investigate
Accept
(a) Quick ratio
0.9:1
1.2:1
(b) Gross profit
56%
64%
(c) Net profit margin
12%
14%
(d) Receivables days
38 days
42 days
(e) Payables days
36 days
49 days
(f) Stock turnover
9 times
12 times
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