Financial Analysis of Crazy Eddie

weirdie Eddie Financial Analysis 3/3/12 After cipher the common surface fiscal statements and financial symmetrys, I build many reasons why nauseated Eddie incorporated should have been considered a high risk audit. The large size of gunstock which was around half of total assets would have make stock-taking a high risk area of focus. As we know fruity Eddies executives grossly overstated inventories, and in order to stop questioning they deliberately destroyed corroboration that would have revealed an inventory shortage. This was a huge red fleur-de-lys and the auditors should have melodic theme so as well. It may have been appropriate for the auditors to fall upon an unannounced visit to approximately of Crazy Eddies warehouses and do inventory counts. Crazy Eddies inventory overturn compared to their gross revenue particularly for the yr 1987 is a cause for concern. The ships companys inventory perturbation is the relatively low at 3.22%, on ly they reported the highest sort out 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, consequently that account should be extensively evaluated to rule out double-dealing activity. In a company that sells cars I would expect that goods would draw a hefty estimate of days in inventory, nevertheless for an electronics stor e I would lack to know why this was happeni! ng. arrive 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 essay to generate revenues using its assets, which is the reversion of what their financial statements report. Another event with the provided financials is that overall their profitability barely does not make sense. During the mid(prenominal) to...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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