In order to determine how risky a particular company is that you are auditing, you prepare these

Question:

In order to determine how risky a particular company is that you are auditing, you prepare these five ratios along with the same ratios of this company's peers:

Company Peers Day's Sales in

\begin{tabular}{lll}

Receivable Index & 1.51 & 1.05 \\

Gross Margin Index & 1.98 & 1.11 \\

Asset Quality Index & 1.21 & 1.01 \\

Sales Growth Index & 1.53 & 1.19 \\

Total Accruals to & & \\

Total Assets & 0.11 & 0.06

\end{tabular}

What are your thoughts about the risk potential of this company?

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