Concept introduction:
Fixed assets turnover ratio:
Fixed assets play a major in the contribution of revenue to the company and they are significant for the efficient and continuous operation of the day to the day business. Fixed assets turnover ratio is used to measure how efficiently the company is using its fixed assets to generate revenue and if the company is more efficient then the ratio will be higher.
Requirement 1:
Compute fixed assets turnover ratio for 2019 of Tabor industries.
Concept introduction:
Average age of fixed assets:
In addition to fixed assets ratio another important calculation is the average age of the fixed assets because older assets are less efficient than the newer assets. This calculation the managers to determine the capital replacement policy and future capital expenditures.
Requirement 2:
To explain:
Compute the average age of fixed assets for 2019 of Tabor industries.
Concept introduction:
Fixed assets turnover ratio:
Fixed assets play a major in the contribution of revenue to the company and they are significant for the efficient and continuous operation of the day to the day business. Fixed assets turnover ratio is used to measure how efficiently the company is using its fixed assets to generate revenue and if the company is more efficient then the ratio will be higher.
Average age of fixed assets:
In addition to fixed assets ratio another important calculation is the average age of the fixed assets because older assets are less efficient than the newer assets. This calculation the managers to determine the capital replacement policy and future capital expenditures.
Requirement 3:
To explain:
To comment on fixed assets turnover ratio and the average age of the fixed assets of tabor industries.
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Cornerstones of Financial Accounting
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