Croix Corporation and Marais Corporation, two companies of roughly the same size, are both involved in the
Question:
Croix Corporation and Marais Corporation, two companies 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 this information:
Instructions
(a) For each company, calculate these values:
(1) Average age of plant assets.
(2) Average useful life.
(3) Asset turnover ratio.
(b) Based on your calculations in part (a), comment on the relative effectiveness of the two companies in using their assets to generate sales. What factors complicate your ability to compare the two companies?
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Related Book For
Financial Accounting Tools For Business Decision Making
ISBN: 9780471347743
2nd Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
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