Reference no: EM131048142
Analytical Procedures. At the beginning of the annual audit of Porster, BV, wholesale distributor of Valkenburg, the Netherlands, Lynna Heijn, Registeraccountant, was given a copy of Porster's financial statements as prepared by the company's accountant. On reviewing these statements, Heijn noted the following abnormal conditions:
1 The accounts receivable outstanding at the year-end represent an unusually high number of average days' credit sales.
2 The inventories on hand at the year-end represent an unusually high proportion of the current assets. 3 The working capital ratio of the company is almost twice that of the previous year.
4 The percentage of gross profit on net sales is considerably in excess of that of previous years.
5 The rate of turnover of inventory is unusually low in comparison with previous years
Required:
Taking all the above conditions together, what irregularities might Heijn suspect regarding sales and inventories? [CICA adapted]
Which model do you identify with the best and why
: There are several analytical models used in the project management and business communities. Which model do you identify with the best and why?
|
What is the optimal hedge ratio
: A food processing company knows that it will buy 1 million bushels of corn in three months. The standard deviation of the change in the price per b of bushel over a 3-month period is calculaed 0.055 (5.5%). What is the optimal hedge ratio
|
What is your estimate of the propertys value
: A property produces a first-year net operating income of $24,000. Because of the long economic life of the building, the income is considered as a perpetuity that will grow by 2.5% per year. Using a discount rate of 9.5%, what is your estimate of the..
|
How does your model address redesign concerns issues
: What activities occur during each step/phase of your analytical process? Why did you choose to use a cyclical or linear process/model? How does your model address redesign concerns/issues?
|
The rate of turnover of inventory is unusually low
: The rate of turnover of inventory is unusually low in comparison with previous years
|
Risk class for which the appropriate capitalization rate
: Assume that a firm belongs in a risk class for which the appropriate capitalization rate, ρc , is 12%, and the firm has $1,000,000 worth of debt and $5,000,000 worth of stock outstanding. If the riskless interest rate is 6%, what is this firm’s cost ..
|
Criteria specify a debt service coverage ratio
: Consider an 8.5% loan amortizing at a 25-year rate with monthly payments. What is the maximum amount that can be loaned on a property whose net operating income (NOI) is $500,000 per year, if the underwriting criteria specify a debt service coverage ..
|
Industrial complex with an annual gross income
: An industrial complex with an annual gross income of $5.5 million and operating income of $2.5 million is up for sale. Your investor group is interested in purchasing it, but need to determine its value. Recently, a similar complex with annual gross ..
|
Design systems to manage and monitor quality standards
: Design systems to manage and monitor quality standards specified by the organization - demonstrate a quality culture to ensure continuous monitoring evaluation and development of the process
|