Ling Ltd. and Tseng Ltd., two corporations of roughly the same size, are both involved in the
Question:
Ling Ltd. and Tseng Ltd., two corporations of roughly the same size, are both involved in the manufacture of canoes and sea kayaks. Each company depreciates its plant assets using the straight-line approach. An investigation of their financial statements reveals the following information.
___________________________Ling Ltd.Tseng Ltd.
Net income......................NT$ 9,000,000.......NT$ 9,750,000
Sales revenue........................36,000,000............27,900,000
Average total assets.................30,000,000............30,600,000
Average plant assets................22,500,000............23,100,000
Instructions
(a) For each company, calculate the asset turnover.
(b) Based on your calculations in part (a), comment on the relative effectiveness of the two companies in using their assets to generate sales and produce net income.
Financial StatementsFinancial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
Step by Step Answer:
a b Based on the asset turnover Ling is more effec...View the full answer
Financial Accounting
ISBN: 978-1118978085
IFRS 3rd edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso
