Financial Analysis of Crazy Eddie

weirdie Eddie Financial Analysis 3/3/12 After cipher the common size fiscal statements and financial proportionalitys, I build many reasons why sick of(p) Eddie incorporated should have been considered a high risk audit. The large size of gunstock which was around half of total assets would have do parentage a high risk area of focus. As we know sore Eddies executives grossly overstated inventories, and in order to stop questioning they deliberately destroyed documentation that would have revealed an inventory shortage. This was a huge red careen and the auditors should have melodic theme so as well. It whitethorn have been appropriate for the auditors to fall upon an unannounced visit to near of Crazy Eddies warehouses and do inventory counts. Crazy Eddies inventory overturn compared to their gross revenue particularly for the division 1987 is a cause for concern. The ships companys inventory overthrow is the relatively low at 3.22%, only they reported the highest give notice barters of all four years which was $352,523,000. Going along with that statement, Crazy Eddies auditors should have asked questions as to why their merchandise inventory account dropped so importantly over these four years.

Since Crazy Eddie was a retail store, the sale of inventory to customers is the largest part of their revenue, accordingly that account should be extensively evaluated to rule out two-faced activity. In a company that sells cars I would expect that goods would evanesce a hefty estimate of days in inventory, hardly for an electronics store I would l ack to know why this was happening. tot u! p asset turnover besides plummeted considerably. The asset turnover ratio is the amount of sales generated for either dollar in assets. A low asset turnover ratio suggests that Crazy Eddie was attempt to generate revenues using its assets, which is the reversion of what their financial statements report. Another publicize with the provided financials is that overall their profitability barely does not make sense. During the middle to...If you want to get a full essay, order it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper