Assume that industry ratios were derived from a reputable source. Compute the year 1 and year 2 ratios for Alpha and Omega.

Using your calculated ratios describe any symptoms of fraud and combine the findings in the ratio analysis with the metrics calculated in assignment 1 and draw a conclusion about fraud prediction and recommend the next steps.

\begin{tabular}{|l|c|c|c|c|c|c|} \hline & \multicolumn{4}{|c|}{ Alpha Company } & & Omega Company \\ \hline Ratios & Year 1 & Year 2 & Industry & Year 1 & Year 2 & Industry \\ \hline Current Ratio & 0.63 & 0.64 & 1.15 & 0.63 & 0.64 & 1.15 \\ \hline Debt-to-Assets Ratio & 0.600 & 0.658 & 0.625 & 0.600 & 0.589 & 0.625 \\ \hline Return on Assets & 10% & 11% & 10% & 10% & 20% & 10% \\ \hline Gross Margin & 58% & 58% & 58% & 58% & 61% & 58% \\ \hline Operating Cash Flow/Income & 125% & 124% & 125% & 125% & 60% & 125% \\ \hline Dupont Expression Ratios & & & & & & \\ \hline Risk-Assets-to-Equity & 2.50 & 2.92 & 2.75 & 2.50 & 2.43 & 2.75 \\ \hline Revenue Generation-Asset Turn & 1.20 & 1.29 & 1.25 & 1.20 & 1.26 & 1.25 \\ \hline Profits-Profit Margin & 8% & 8% & 8% & 8% & 16% & 8% \\ \hline Return on Equity & 25% & 32% & 27% & 25% & 49% & 27% \\ \hline \end{tabular} \begin{tabular}{|l|c|c|c|c|c|c|} \hline & \multicolumn{4}{|c|}{ Alpha Company } & & Omega Company \\ \hline Ratios & Year 1 & Year 2 & Industry & Year 1 & Year 2 & Industry \\ \hline Current Ratio & 0.63 & 0.64 & 1.15 & 0.63 & 0.64 & 1.15 \\ \hline Debt-to-Assets Ratio & 0.600 & 0.658 & 0.625 & 0.600 & 0.589 & 0.625 \\ \hline Return on Assets & 10% & 11% & 10% & 10% & 20% & 10% \\ \hline Gross Margin & 58% & 58% & 58% & 58% & 61% & 58% \\ \hline Operating Cash Flow/Income & 125% & 124% & 125% & 125% & 60% & 125% \\ \hline Dupont Expression Ratios & & & & & & \\ \hline Risk-Assets-to-Equity & 2.50 & 2.92 & 2.75 & 2.50 & 2.43 & 2.75 \\ \hline Revenue Generation-Asset Turn & 1.20 & 1.29 & 1.25 & 1.20 & 1.26 & 1.25 \\ \hline Profits-Profit Margin & 8% & 8% & 8% & 8% & 16% & 8% \\ \hline Return on Equity & 25% & 32% & 27% & 25% & 49% & 27% \\ \hline \end{tabular}