Andruski Company and Brar Company both manufacture school science equipment. The following financial information is for three

Question:

Andruski Company and Brar Company both manufacture school science equipment. The following financial information is for three years ended December 31 (in thousands):
Andruski Company and Brar Company both manufacture school science equipment.

Instruction
(a) Calculate the asset turnover and return on assets ratios for both companies for 2016 and 2017. Round your answers to two decimal points.
(b) Comment on how effective each of the companies is at using its assets to generate sales and produce profit.
Taking It Further
After reading the notes to the financial statements, you have determined that Andruski Company uses diminishing-balance depreciation and Brar uses straight-line. Does this affect your ability to com- pare these two companies?

Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
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Related Book For  book-img-for-question

Accounting Principles

ISBN: 978-1119048503

7th Canadian Edition Volume 1

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

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