Assume that as an audit manager of a large multinational manufacturer of athletic apparel (e.g., Adidas, Nike, Reebok), you perform high-level preliminary analytical procedures on the unaudited financial statements at the beginning of the audit engagement and discover the following fluctuations:

a. Inventory turnover increased from 2.5 times to 3.75 times.

b. Depreciation expense has been about 2 percent of total assets for several years. This year it was only 1 percent of total assets.

c. Interest expense has been about 6 percent of total debt; this year it was 8 percent.

d. The quick ratio has decreased from 1.45 to 0.95 .

e. Average days payable decreased from 35 days to 29 days.

f. Average days receivable increased from 28 days to 35 days.

g. Return on assets increased from 2.5 percent to 4 percent.

Assuming that each of these is considered material to the audit risk assessment, generate two hypotheses that might explain each change in the client's ratios: one that suggests a normal consequence of business; and one that would suggest increased audit risk.