View the step-by-step solution to:

UESTION 1 'Average useful life', 'Average age of PPE assets' and 'Asset Turnover' are three measures that decision makers can use to analyse the PPE...

  1. 'Average useful life’, ‘Average age of PPE assets’ and ‘Asset Turnover’ are three measures that decision makers can use to analyse the PPE (Property, Plant & Equipment) assets of entities. Fresh Food Ltd and Cheap Food Ltd operate in the same industry. Each entity depreciates its PPE (Property, Plant & Equipment) assets using the straight line approach. An investigation of their financial statements reveals the following information:

      (Amounts in millions)
      Fresh Food Ltd Cheap Food Ltd
    Sales $ 22,653 $ 33,812
    Total Assets (Average) 22,088 36,167
    Accumulated Depreciation 2,701 4,359
    Depreciation Expense 381 697
    Cost of Plant Assets (Average) 7,715 10,237


    What conclusion concerning the management of plant assets can be drawn from these data?  (word limit: 180 – 240 words)


Sign up to view the entire interaction

Top Answer

The answer is... View the full answer

Depreciation - Copy.docx

From the provided data regarding the two companies, I would conclude that for Fresh food
limited, its assets turnover ratio of 1.02(22653/20088). This implies that the return on assets for

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.


Educational Resources
  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Ask a homework question - tutors are online