Notes on similarities, differences, and patterns you see across all companies, your ideas on potential explanations for
Question:
Notes on similarities, differences, and patterns you see across all companies, your ideas on potential explanations for these, and your recommendation on the best company to invest in.
Compute the percentage of fixed asset cost that has been depreciated and a description of what it implies about the length of time the assets have been depreciated.
- Suncor Energy Inc
Percentage of fixed asset cost that has been depreciated = (Accumulated depreciation ÷ Property, Plant, and Equipment) × 100
2019: (52,524,000,000 ÷ 125,164,000,000) × 100 = 42%
42% of the cost of the fixed assets has been depreciated. This implies that the assets have been depreciated for almost half of their useful lifetime.
- Amplify Energy Corp
The percentage of fixed costs is as below:
Particulars | 2019 | 2018 |
Depreciation costs | 62000 | 65832 |
Fixed assets | 819667 | 778881 |
% fixed costs | 8% | 8% |
The depreciation is around 8% of fixed assets in each year and the useful life is approx. 12.5 years.
- Ultra Petroleum Corporation
Accumulated Depreciation= $16,313 thousand
PP&E= $26,092 thousand
Percentage that has been depreciated= 16,313/26,092= 0.625 or 62.5%
This percentage means that 62.5% of the Property, Plant, and Equipment asset has been used up, with 100% meaning the assets will be completely used up. Therefore, PP&E have used up more than half their useful life, with the exception of Land, as the useful life is unlimited, and there is no depreciation applied
- Nabors Industries Ltd
Accumulated Depreciation: $8,685,073,000
Property, Plant & Equipment: $4,930,549,000
Accumulated Depreciation ÷ Property, Plant, and Equipment) × 100
Depreciation Percentage: 17.6% of the cost of fixed assets was depreciated meaning the asset still has a long way to go before the end of its life.
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty