Defi ning total asset turnover as revenue divided by average total assets, all else equal, impairment write-downs of long-lived assets owned by a company will most likely result in an increase for that company in: A . the debt-to-equity ratio but not the total asset turnover.

Defi ning total asset turnover as revenue divided by average total assets, all else equal, impairment write-downs of long-lived assets owned by a company will most likely result in an increase for that company in: A . the debt-to-equity ratio but not the total asset turnover.

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter13: Financial Statement Analysis

Section: Chapter Questions

Problem 13.15E

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Which of the following statements is true? a. The fixed asset turnover ratio assists managers in determining the estimated future capital expenditures that are needed. b. The average age of the fixed assets is computed by dividing accumulated depreciation by depreciation expense. c. If net sales increases, the fixed asset turnover ratio will decrease. d. A relatively low fixed asset turnover ratio signals that a company is efficiently using its assets.
Classifications Where would each of the following items most likely be reported in a companys financial statements? Assume the monetary amount of each item is material. 1. Bad debts expense 2. Sales discounts taken 3. Depreciation expense on sales equipment 4. Loss from operations of discontinued Division 5. Earnings per share 6. Gain on sale of land 7. Administrative salaries 8. Cash dividends declared and paid on common stock 9. Gain from sale of discontinued Division 10. Loss on sale of equipment 11. Advertising expense 12. Merchandise inventory (ending) 13. Loss from write-off of obsolete inventory 14. Cash paid to acquire equipment 15. Unrealized increase in fair value of available-for-sale securities
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Defi ning total asset turnover as revenue divided by average total assets, all else equal, impairment write-downs of long-lived assets owned by a company will most likely result in an increase for that company in: B . the total asset turnover but not the debt-to-equity ratio
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If a company finds that its fixed asset turnover (net sales/fixed assets) hasfallen to less than 1, what does this indicate?
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What are three of the benefits of common-sized analysis using the inverse operating asset turnover (ATO) ratios? a) provides insight into the age of the assets b) the item is expressed as a percentage of current year sales c) is more comparable year-to-year than other methods d) negates the issue with small denominators e) it provides a common denominator for all accounts
Return on Assets, or ROA, can be expressed as the product of two ratios. Which two? Select one: a. Sales Turnover and Total Asset Turnover b. None of the options are correct c. Net income and total assets d. Profit margin and Total Asset Turnover e. Net Profit Margin and Fixed Asset turnover
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