Question 2 - Analytical procedure a. Define analytical procedures and give the basic prernise of using them. (1 mark) b. You are provided the following ratios for an audit cellent Ratios 2014 2013 1 Gross Margin 18% 18% 2 Operating Margin 10% 7% 3 Current 3.2:1 1.4:1 4 Quick 2.6:1 0.8:1 5 Inventory days 63 58 6 Receivable days 61 7 Purchases days 25 69 48 Required: Identify the major conclusions that can be drawn from the above information about the company's performance in 2014 (Tip - Do not simply state the percentage change or lack of change, but rather what it could mean). (14 marks) a Describe the FIVE types of analytical procedures. (5 marks) Summer School 2014/2015