Executive Jets, LLC operates a charter flight-service company in the northwestern United States. Classic Steps, LLC is
Question:
Executive Jets, LLC operates a charter flight-service company in the northwestern United States. Classic Steps, LLC is a company that provides dance lessons to students of all ages. Classic Steps has dance studios in several cities throughout the western United States. The following data are from the companies’ most recent financial statements but are not identified as to which company they relate.
Required
a. Calculate the ratio of sales to property, plant, and equipment for each company.
b. Based on the ratios calculated in Requirement a, decide which is the charter flight-service company and which is the dance studio business. Explain your answer.
c. Based on the ratios calculated in Requirement a, which company appears to be using its property, plant, and equipment more efficiently? Explain your answer.
d. Explain why two companies with such different amounts of property, plant, and equipment might have the same amount of current assets.
Financial 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:
Introductory Financial Accounting for Business
ISBN: 978-1260299441
1st edition
Authors: Thomas Edmonds, Christopher Edmonds