Working Papers, Chapters 1-17 for Warren/Reeve/Duchac's Accounting, 26th and Financial Accounting, 14th
26th Edition
ISBN: 9781305392373
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 10, Problem 10.24EX
a)
To determine
Fixed Asset turnover:
It is a ratio that measures the productive capacity of the fixed assets to generate the sales revenue for the company. Thus, it shows the relationship between the net sales and the average total fixed assets. The following is the formula to calculate the ratio:
the fixed asset Turnover Ratio of each company.
b)
To determine
To find: which company is more efficient in generating sales from fixed assets.
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Asset turnover
A company reports the following:
Sales
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Average total assets (excluding long-term investments)
611,500
Determine the asset turnover ratio. If required, round your answer to one decimal place.
Given the following information for the Vanderbilt Tire Company, find ROA (Return on Assets): Debt ratio (D/A) = 0.33 (expressed as a decimal) Total asset turnover ratio (S/A) = 1.88 Sales (S) = $10,000 Net profit margin = 0.08 (expressed as a decimal)
Asset Efficiency Ratios
Sammy Inc.'s financial statements for 2023 indicate the
following account balances:
Net sales
Cost of goods sold
Average accounts receivable
Average inventory
Average property, plant, and equipment
Average total assets.
Required:
Round your answers to two decimal places.
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$307,608
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85,367
144,140
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Chapter 10 Solutions
Working Papers, Chapters 1-17 for Warren/Reeve/Duchac's Accounting, 26th and Financial Accounting, 14th
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