Andruski Company and Brar Company both manufacture school science equipment. The following financial information is for three
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Instructions
(a) Calculate the asset turnover and return on assets ratios for both companies for 2013 and 2014. Round your answers to two decimal points.
(b) Comment on how effective each of the companies is at using its assets to generate sales and produce profit.
TAKING IT FURTHER
After reading the notes to the financial statements, you have determined that Andruski Company uses diminishing-balance depreciation and Brar uses straight-line. Does this affect your ability to compare these two companies?
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
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Related Book For
Accounting Principles Part 2
ISBN: 978-1118306796
6th Canadian edition Volume 1
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Kinnear, Joan E. Barlow
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