Currency in millions of Australian dollars
the total revenue in 2013 is $15,902.00 compared with $15724.00 in 2012, followed by $14613.00 in 2011. Qantas seen a relatively flat in the revenue. Gross profit in 2013 is $4315.0 with $4181.0 in 2012, followed by $3939.0 in 2011. Net income in the consecutive three years are 5, -245, 250. There is an dramatic fluctuation appeared.
Gross profit ratio
Receivable turnover ratio
Inventory turnover ratio
Net profit ratio
Debt to equity ratio
Asset turnover ratio
Current ratio is always larger than quick ratio, it may because that inventory is overstated. Inventory turnover ratio has a relatively slight rise , it also can be an indicator for the overstated inventory. As per the current ratio, overstating inventory allows qantas to avoid booking expenses and reduces the cost of goods sold. It could also indicate obsolete stock problems. Ratio
The change in current ratio compared with the previous year, supports the idea that inventory could be overstated. As a decrease in inventory lead to a decrease in gross margin, the auditor would be concerned that inventory is overstated. Inventory
Overstating inventory allows qantas to avoid booking an expense now and also creates a larger asset base.by overstating inventory. Management can reduce the cost of good sale. In order to overstate inventory, management may book sales for inventory that does not exist or misallocate costs . Days in...
Please join StudyMode to read the full document