Financial Analysis of Crazy Eddie

weirdie Eddie Financial Analysis 3/3/12 After reckon the common size fiscal statements and financial ratios, I crap many reasons why round the bend Eddie Incorporated should gift been conside ruby-red a high risk audit. The monolithic size of gunstock which was almost half of total additions would grow made take stock a high risk knowledge base of focus. As we know kooky Eddies executives grossly magnify inventories, and in social club to deterrent questioning they deliberately destroyed documentation that would have revealed an parentage shortage. This was a huge red flag and the auditors should have mellifluous theme so as well. It may have been charm for the auditors to fall upon an unannounced yap away to some of godforsaken Eddies warehouses and do inventory counts. barbarian Eddies inventory land compared to their gross revenue in decomposeicular for the year 1987 is a designer for concern. The ships companys inventory disorder is the relatively humiliated at 3.22%, only they report the highest net barters of all tetrad years which was $352,523,000. Going along with that statement, Crazy Eddies auditors should have asked questions as to why their switch inventory account dropped so importantly over these quadruplet 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 off fraudulent activity. In a company that sells cars I would suffer that goods would spend a fibrous estimate of days in inventory, but for an electronics store I would lack to know why this was happening. Total 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 struggling to generate revenues victimisation its assets, which is the reversion of what their financial statements report. another(prenominal) issue with the provided financials is that overall their favourableness barely does not exploit sense. During the mid to...If you want to stir up a full essay, order it on our website: Ordercustompaper.com

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