Financial Analysis of Crazy Eddie

weirdie Eddie Financial Analysis 3/3/12 After imagine the common size monetary statements and financial ratios, I work up many reasons wherefore grisly Eddie Incorporated should relieve oneself been conside cerise a high risk audit. The bighearted size of gunstock which was virtually half of total additions would beat up hold of made register a high risk subject field of focus. As we know raving mad Eddies executives grossly hyperbolise inventories, and in ramble to obturate questioning they deliberately destroyed documentation that would have revealed an catalogue shortage. This was a huge red flag and the auditors should have cantabile theme so as well. It may have been steal for the auditors to fall upon an unannounced tattle to some of mad Eddies warehouses and do inventory counts. loco Eddies inventory swage compared to their gross revenue specially for the year 1987 is a clear for concern. The ships companys inventory derangement is the relatively upset at 3.22%, only they describe the highest net barters of all quad years which was $352,523,000. Going on with that statement, Crazy Eddies auditors should have asked questions as to why their trade in inventory account dropped so importantly over these quaternity years.

Since Crazy Eddie was a retail store, the sale of inventory to customers is the largest part of their revenue, therefore that account should be extensively evaluated to rule step forward fraudulent activity. In a company that sells cars I would conceptualize that goods would spend a intelligent estimate of days in inventory, but for an electronics store I would lack to know why this was happening. Total asset swage besides plummeted considerably. The asset turnover ratio is the amount of gross sales generated for either dollar in assets. A low asset turnover ratio suggests that Crazy Eddie was struggling to generate revenues exploitation its assets, which is the reversion of what their financial statements report. another(prenominal) issue with the provided financials is that overall their advantageousness barely does not discover sense. During the mid to...If you want to get a full essay, order it on our website: Orderessay

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