Millennium Motors $($Pty$)$ Ltd $($MM$)$ is an automotive company that designs and manufactures cars

with innovative technology and modern technology.

The data presented below has been extracted from their financial statements. The related industry

indicators are also included for comparative analysis.

Description $202120222023$

Gross Profit $\%53\mathrm{.}50\%57\mathrm{.}70\%44\mathrm{.}80\%$

Gross Profit $\%($Industry

Average$)30\%30\%30\%$

Operating Profit $\%17\%21\%29\%$

AUE$4863/102/0/$B$/2024$

$7$

Operating Profit $\%($Industry

Average$)12\mathrm{.}5\%11\%11\%$

Accounts Receivable Turnover $3\mathrm{.}5$ times $2\mathrm{.}4$ times $1\mathrm{.}9$ times

R R R

Accounts Receivable $1558340769377312461098$

Bad Debt $14325016905443501788$

Net Sales Revenue $132405242484534731395754$

Operational Expenses $86060161112554113240743$

Cash $/($Cash shortfall$)$

$728,439$

$315,361$

$(237,228)$

Inventory $170589949287118513667$

REQUIRED

Interpret the financial information above and conclude whether a fictitious revenue scheme could

possibly be present at Millenium Motors $($Pty$)$ Ltd$.$

Note: When calculating these ratios, try to associate each calculation with the relevant red flags

of a fictitious revenue scheme. Do not just present the calculations and define them; you must

interpret the data to earn marks. This will help you to reach a conclusion.