The following financial ratios have been calculated for Nova Ltd for the year ended 30 June 2008:

Actual results Budgeted results Previous year Industry average

current ratio 1.97 1.92 1.87 1.92

quickasset ratio 1.06 1.06 1.06 1.11

Inventory turnover 4.21 4.91 4.86 4.76

Net profit ratio 0.05 0.03 0.03 0.03

Gross margin 0.65 0.59 0.61 0.61

Required: Provide four (4) possible explanations for the results for the various ratios for Nova Ltd and outline their implications for the audit. (10 marks, maximum