Ling Ltd. and Tseng Ltd., two corporations of roughly the same size, are both involved in the

Question:

Ling Ltd. and Tseng Ltd., two corporations of roughly the same size, are both involved in the manufacture of canoes and sea kayaks. Each company depreciates its plant assets using the straight-line approach. An investigation of their financial statements reveals the following information.

___________________________Ling Ltd.Tseng Ltd.

Net income......................NT$ 9,000,000.......NT$ 9,750,000

Sales revenue........................36,000,000............27,900,000

Average total assets.................30,000,000............30,600,000

Average plant assets................22,500,000............23,100,000

Instructions

(a) For each company, calculate the asset turnover.

(b) Based on your calculations in part (a), comment on the relative effectiveness of the two companies in using their assets to generate sales and produce net income.

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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Related Book For  book-img-for-question

Financial Accounting

ISBN: 978-1118978085

IFRS 3rd edition

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

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