Question
B. Analyze the ratio of fixed assets to long-term liabilities measure of solvency for Sparkit using the attached Figure A1.2 Excel file by doing the
B. Analyze the ratio of fixed assets to long-term liabilities measure of solvency for Sparkit using the attached Figure A1.2 Excel file by doing the following:
1. Discuss why it is important for Sparkit's financial manager to understand the ratio of fixed assets to long-term liabilities.
2. Discuss how the ratio of fixed assets to long-term liabilities influences Sparkit's IT department's operational sustainability.
3. Provide the ratio of fixed assets to long-term liabilities value for Fiscal Year 2 from Figure A1.2, including how you calculated your answer.
4. Provide the final value for the ratio of fixed assets to long-term liabilities, including how you calculated your answer.
Fiscal Year 1 | Fiscal Year 2 | |
Long-term Assets: | ||
Property, plant, & equipment | $28,175 | $32,401 |
Less accumulated depreciation | $13,355 | $15,351 |
Property, plant, & equipment (net) | $14,825 | $17,041 |
Operating right of use (net) | $2,826 | $3,111 |
Long-term financing receivables | $5,541 | $5,921 |
Prepaid pension assets | $6,428 | $6,611 |
Deferred costs | $993 | $1,041 |
Deferred taxes | $6,324 | $6,451 |
Goodwill | $54,085 | $57,321 |
Intangible assets (net) | $11,855 | $12,321 |
Investments & sundry assets | $1,462 | $1,491 |
Total Long-term Assets | $104,334 | $111,341 |
Long-term Liabilities: | ||
Long-term debt | $9,743 | $9,452 |
Retirement & non pension obligations | $10,263 | $9,752 |
Deferred income | $3,493 | $3,662 |
Operating lease liabilities | $2,354 | $2,522 |
Other long-term liabilities | $12,423 | $11,432 |
Total Long-term Liabilities | $38,294 | $36,822 |
Total Liabilities | $71,463 | $72,512 |
Step by Step Solution
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Step: 1
1 Understanding the ratio of fixed assets to longterm liabilities is crucial for Sparkits financial manager for several reasons Firstly it provides in...Get Instant Access to Expert-Tailored Solutions
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