Kathmandu Holdings Limited (KMD) is a global outdoor and action sports company, formed in 2009 as a publicly listed company. It consists of three brands: Kathmandu (born in 1987), Oboz (acquired in 2018), and Rip Curl (acquired in 2019). KMDs financial year end is 31 July.

Assume KMD applies the straight-line method for Property, Plant and Equipment (PPE).

The following amounts were extracted from KMDs financial statements:

REQUIRED:

1. For 2020, following Module 6 Asset recognition and operating assets in the course textbook, calculate each of the following PPE-related ratios: i. PPE Turnover, ii. Percent Used Up
2. Using any relevant information provided, identify and interpret any long-term trend in the PPE Turnover ratio.
3. Using any relevant information provided, identify and interpret any long-term trend in the Percent Used Up ratio. What implication does the ratio have for forecasting KMDs cash flows?

$'0002 Sales Cost of sales Gross profit Depreciation EBIT Total comprehensive loss Plant and equipment - grosse Accumulated depreciation Plant and equipment - neta 2020 801,524 (334,493) 467,031 (19,653) 45,864 (182) 272,840 (182,118) 90,722 2019-4 538,855 (206,362) 332,493 (11,920) 84,293 54,956