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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881

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Cornerstones of Financial Accounti...

4th Edition
Jay Rich + 1 other
ISBN: 9781337690881
Textbook Problem
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Analyzing Fixed Assets

Pitt reported the following information for 2018 and 2019:

Chapter 7, Problem 36BE, Analyzing Fixed Assets Pitt reported the following information for 2018 and 2019: Required: Compute

Required:

Compute Pitt’s fixed asset turnover ratio and the average age of its fixed assets. ( Note: Round all answers to two decimal places.)

To determine

Concept introduction:

Fixed assets are major productive asset of most companies. Therefore it is necessary to understand that a company should utilize these fixed assets efficiently.

Requirement 1:

To compute:

Fixed asset turnover Ratio.

Explanation

Fixed Asset Turnover ratio: It is one of the measure to identify how efficiently a company is using its Fixed Assets. The more efficient a company uses its Fixed assets, the higher will be the ratio.

Opening Net Fixed assets = 550000-170000=3800...

To determine

Concept introduction:

Fixed assets are major productive asset of most companies. Therefore it is necessary to understand that a company should utilize these fixed assets efficiently.

Requirement 2:

To compute:

Average age of fixed assets.

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