1-A

Companies in the tire manufacturing business use a lot of property, plant, and equipment. Tyrell Rubber and Tire Corporation and Maxwell Rubber and Tire Manufacturing are two of the leading manufacturers. In additiion, Maxwell also operates over 1,000 tire service center outlets.

Tyrell Rubber & TireMaxwell Rubber & TireSales$3,008$14,010Depreciation and depletion costs217980Property, plant, and equipment (net of accumulated depreciation)9945,326Total assets2,61615,010Depreciation methodStraight-lineStraight-lineDepletion methodUnits of productionUnits of productionEstimated life of assets Buildings10 to 40 years3 to 45 yearsMachinery and equipment2 to 14 years3 to 40 yearsNet income$129$915

Required

1. Calculate depreciation costs as a percentage of sales for each company.
2. Calculate property, plant, and equipment as a percentage of total assets for each company.
3. Based only on the percentages calculated in Requirements a and b, which company appears to be using its assets most efficiently?
4. Calculate the return-on-assets ratio for each company. Based on this ratio, which company appears to be using its assets most efficiently?

1-B

Tools For All (TFA) is a global supplier of tools and related accessories. The following data were taken from the companys 2018 annual report. Dollar amounts are in millions.

Fiscal Years EndingDecember 31, 2018December 31, 2017Current assets$4,547.8$4,500.0Current liabilities4,091.24,389.9Total assets19,744.019,506.9Total liabilities11,170.410,423.5

Required

a. Compute TFAs current ratios for 2018 and 2017. (Round your answers to 2 decimal places.)

b. Compute TFAs debt-to-assets ratios for 2018 and 2017. (Round your answers to 2 decimal places.)

c. Based on the ratios computed in Requirements a and b, did TFAs liquidity get better or worse from 2017 to 2018?

d. Based on the ratios computed in Requirements a and b, did TFAs solvency get better or worse from 2017 to 2018?