Financial Statement Fraud

Exercise One

Rev. $20240331$

The following information is given for Darwin Duck Down, lnc$.$

Calculate the gross profit percentage for years $1$ and $2.$

Calculate the inventory turnover ratio for years $1$ and $2.$ Is this what you would

expect given the sales increase?

What is the measured by the inventory turnover ratio and what are the fraud

implication?

Calculate the average number of days inventory in stock for both years.

From these ratios, what if any are your fraud concerns? Be specific.