Andruski Company and Brar Company both manufacture school science equipment. The following financial information is for three
Question:
Andruski Company and Brar Company both manufacture school science equipment. The following financial information is for three years ended December 31 (in thousands):
Instructions
a. Calculate the asset turnover and return on assets ratios for both companies for 2020 and 2021. 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.
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 TurnoverAsset 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.
Step by Step Answer:
a in thousands b Brar Company is far more efficient in using its assets to generate salesits assets ...View the full answer
Accounting Principles Volume 1
ISBN: 978-1119502425
8th Canadian Edition
Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak
