Accounting (Text Only)
26th Edition
ISBN: 9781285743615
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 10, Problem 10.9BPE
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 Company D for 2015 and 2016.
b)
To determine
To explain: whether the change in the fixed asset turnover ratio from 2015 to 2016 indicates a favorable or unfavorable change.
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Check out a sample textbook solutionStudents have asked these similar questions
Fixed asset turnover ratio :
2015: 7.48x
2016: 6.14x
2017: 7.70x
2018: 4.59x
2019: 6.38x
What is the trend analysis from 2015 to 2019 for the Fixed Asset Turnover Ratio and why the ratio is decrease and increase?
Comment on the changes between these two years. More specifically, how do the changes in total asset turnover TATO ratio between 2017 and 2016 reflect changes in asset utilization efficiency and, other things equal, shareholder value
What is the comparison (analysis) of the Fixed Asset Turnover Ratio of Industry Average Ratio and the Company A Ratio? The Fixed Asset Turnover Ratio has decreased and increased. Why?
Industry Average Fixed Asset Turnover Ratio
2015: 3.00
2016: 3.18
2017: 3.58
2018: 2.23
2019: 2.94
Company A Fixed Asset Turnover Ratio
2015: 7.48
2016: 6.14
2017: 7.70
2018: 4.59
2019: 6.38
Chapter 10 Solutions
Accounting (Text Only)
Ch. 10 - ONeil Office Supplies has a fleet of automobiles...Ch. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Immediately after a used truck is acquired, a new...Ch. 10 - Keyser Company purchased a machine that has a...Ch. 10 - Is it necessary for a business to use the same...Ch. 10 - Prob. 8DQCh. 10 - For some of the fixed assets of a business, the...Ch. 10 - a. Over what period of time should the cost of a...
Ch. 10 - Straight-line depreciation A building acquired at...Ch. 10 - Straight-line depreciation Equipment acquired at...Ch. 10 - Units-of-activity depreciation A truck acquired at...Ch. 10 - Units-of-activity depreciation A tractor acquired...Ch. 10 - Double declining-balance depreciation A building...Ch. 10 - Double-declining-balance depreciation Equipment...Ch. 10 - Revision of depreciation Equipment with a cost of...Ch. 10 - Revision of depreciation A truck with a cost of...Ch. 10 - Capital and revenue expenditures On February 14,...Ch. 10 - Capital and revenue expenditures On August 7,...Ch. 10 - Sale of equipment Equipment was acquired at the...Ch. 10 - Sale of equipment Equipment was acquired at the...Ch. 10 - Prob. 10.7BPECh. 10 - Prob. 10.7APECh. 10 - Prob. 10.8BPECh. 10 - Prob. 10.8APECh. 10 - Prob. 10.9APECh. 10 - Prob. 10.9BPECh. 10 - Costs of acquiring fixed assets Melinda Stoffers...Ch. 10 - Prob. 10.2EXCh. 10 - Determining cost of land Northwest Delivery...Ch. 10 - Prob. 10.4EXCh. 10 - Prob. 10.5EXCh. 10 - Capital and revenue expenditures Quality Move...Ch. 10 - Nature of depreciation Tri-City Ironworks Co....Ch. 10 - Prob. 10.8EXCh. 10 - Prob. 10.9EXCh. 10 - Prob. 10.10EXCh. 10 - Depreciation by units-of-output method Prior to...Ch. 10 - Depreciation by two methods A John Deere tractor...Ch. 10 - Depreciation by two methods A storage tank...Ch. 10 - Partial-year depreciation Sandblasting equipment...Ch. 10 - Revision of depreciation A building with a cost of...Ch. 10 - Capital expenditure and depreciation; parital-year...Ch. 10 - Entries for sale of fixed asset Equipment acquired...Ch. 10 - Prob. 10.18EXCh. 10 - Depletion entries Big Sky Mining Co. acquired...Ch. 10 - Prob. 10.20EXCh. 10 - Book value of fixed assets Apple Inc. designs,...Ch. 10 - Balance sheet presentation List the errors you...Ch. 10 - Prob. 10.24EXCh. 10 - Prob. 10.23EXCh. 10 - Asset traded for similar asset A printing press...Ch. 10 - Prob. 10.26EXCh. 10 - Entries for trade of fixed asset On July 1, Twin...Ch. 10 - Entries for trade of fixed asset On October 1,...Ch. 10 - Allocating payments and receipts to fixed asset...Ch. 10 - Comparing three depreciation methods Montes Coffee...Ch. 10 - Depreciation by three methods; partial years...Ch. 10 - Prob. 10.4APRCh. 10 - Transactions for fixed assets, including sale The...Ch. 10 - Amortization and depletion entries Data related to...Ch. 10 - Allocating payments and receipts to fixed asset...Ch. 10 - Comparing three depreciation methods Waylander...Ch. 10 - Depreciation by three methods; partial years...Ch. 10 - Depreciation by two methods; sale of fixed asset...Ch. 10 - Transactions for fixed assets, including sale The...Ch. 10 - Amortization and depletion entries Data related to...Ch. 10 - Prob. 10.1CPCh. 10 - Prob. 10.2CPCh. 10 - Effect of depreciation on net income Tuttle...Ch. 10 - Fixed asset turnover: three industries The...
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- The analysis of Total Asset Turnover is as follows: 2015: 0.15 2016: 0.14 2017: 0.20 2018: 0.14 2019: 0.22 a. Explain the trend analysis for that Total Asset Turnover and why it is increasing or decreasing?arrow_forwardIn which one of the following areas, MRF Ltd. has performed better in 2016 compared to 2015? A Total Asset Management B. Fixed Asset Management C. Current Asset Management D. Non-current asset Managementarrow_forwardUsing the information below to answer the following parts A and B. Round to 2 decimal places. 2018 2017 2016 Total assets 22,536 23,259 21,396 Sales 36,397 34,350 32,376 A. Calculate the Asset turnover for 2017 and 2018. B. Is the change from 2017 to 2018 favorable or unfavorable? Explain your answer.arrow_forward
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