Question

Refer to the financial statements of Canadian Tire Corporation (Appendix A) and RONA Inc. (on Connect) and the Industry Ratio Report (Appendix B on Connect).
Required:
1. Compute the ratio of property, plant, and equipment (net) to total assets, for both companies each year. Why might the companies’ ratios differ?
2. Compute the percentage of the gross amount of property, plant, and equipment that has been depreciated for each company for the most recent year. Why do you think the percentages differ?
3. Compute the fixed asset turnover ratio for the most recent year presented for both companies. Which has the higher efficiency in using assets? Why?
4. Compare the fixed asset turnover ratio for both companies to the industry average. Are these companies doing better or worse than the industry average in asset efficiency?


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  • CreatedAugust 04, 2015
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