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 peer's:

~~~Beneish M-Score work~~~

• Excel Formula: M= -6.065 + 0.823*DSRI + 0.906*GMI + 0.593*AQI + 0.717*SGI + 0.107*DEP

Company

Peers

Day's sales in 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 Accrual to total Assets

0.11

0.06

**what are your thoughts about the risk potential of this company**