Question

Tabor Industries is a technology company that operates in a highly competitive environment. In 2008, management had significantly curtailed its capital expenditures due to cash flow problems.
Tabor reported the following information for 2011:
• 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 2011.
2. Compute the average age of Tabor’s fixed assets for 2011.
3. Conceptual Connection: Comment on Tabor’s fixed asset turnover ratios and the average age of the fixed assets.


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  • CreatedSeptember 22, 2015
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