[Anonymous]

I’ve memorized the formulas to certain ratios that may/may not be used on the audit exam; but my issue is understanding the concepts…if numerator increases, will it change the ratio if the denominator is static and vice versa?

[samdiegoCPA]

What I do for any ratio questions is put in actual numbers and adjust as necessary. Easiest way to not get confused and answer the answer quickly without second guessing!

AUD: 84
REG: 84
BEC: 79
FAR: 83

[Anonymous]

@samdiegoCPA Understand the underlying relationships is my hardest problem and its frustrating. I put actual numbers, but I think I'm getting too involved with the numbers….

[Melimeli]

Not necessarily will plugging numbers help. I am going through the same issue. My exam is 7 days away and I still struggle with the ratio analysis. Only the simulations on becker have excercises with this but the explanations are very hard to understand. Anybody out there that found anything explaining how to analyze these ratios? that would really help.

F= Not taken
A= 69 / 68 / next 5/13/14
R= Not taken
B= Not taken

[Tux]

I am also studying for AUD.

I was told not to spend too much time on memorizing the actual ratios.

To answer the original question – yes, the ratio will change if the numerator increases by the denominator remains the same.

Example:

5:10 vs. 6:10

50% vs. 60%

If the denominator increases, but numerator stays the same, yes the ratio changes

Example:

1:5 vs. 1:10

20% vs. 10%

In order for the ratio to NOT change, BOTH the numerator and denominator would have to move in the same direction.

Hope that helps.

FAR - 86 - 2/27/14
AUD - 75 - 5/29/14
BEC - 80 - 8/31/14
REG - 89 - 2/27/15
Praise Jesus! I'm done!!

Study resources:
Becker
Wiley test bank

[KimCPA68]

I took the exam last week and the ratios were not as big a deal than I thought. I studied for days trying to figure this out and it really was not that big of a deal on the exam. I would concentrate on know adjusting journal entries. That's something I didn't practice as much. But don't overdo that either. Just refresh your memory.

AUD - 80 (Passed 5/14)
BEC - 8/14 or 11/14
FAR - TBD
REG -TBD

Tell yourself out loud "I can do this!"

[KimCPA68]

Another piece of advice is to look at the ratio section in BEC and review the study text. I am using CPAEXCEL. But you could probably get more info from a finance or business book if you are not in a review class. I might by ninja notes again. I liked them. I read them several times.

AUD - 80 (Passed 5/14)
BEC - 8/14 or 11/14
FAR - TBD
REG -TBD

Tell yourself out loud "I can do this!"

[Author]

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