Week 5 (200-250 words) The following financial ratios have been calculated for Nova Ltd for the year ended 30 June 2008: Previous year Industry average Actual results Budgeted results 1.92 Current ratio 1.97 1.87 1.92 Quick asset 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 possible explanations for the results for the various ratios for Solar Ltd and outline their implications for the audit. (10 marks)