Tabor Industries is a technology company that operates in a highly competitive environment. In 2016, management had significantly curtailed its capital expenditures due to cash flow problems.
Tabor reported the following information for 2019:
• Net fixed assets (beginning of year), $489,000
• Net fixed assets (end of year), $505,000
• Net sales, $1,025,000
• Accumulated depreciation (end of year), $543,000
• Depreciation expense, $126,000
An analyst reviewing Tabor’s financial history noted that Tabor had previously reported fixed asset turnover ratios and average age of its assets as follows:

During this time frame, the industry average fixed asset turnover ratio is 2.46 and the industry average age of assets is 1.79 years.

Required:

1. Compute Tabor's fixed asset turnover ratio for 2019.

2. Compute the average age of Tabor's fixed assets for 2019.

3. Comment on Tabor's fixed asset turnover ratios and the average age of the fixed assets?

Transcribed Image Text:

2014 2015 2016 2017 2018 2.45 1.79 2.57 Fixed asset turnover 2.48 2.74 2.33 3.74 Average age of assets (years) 2.81 1.81 1.94