Computing and Comparing PP&E Turnover for Two Companies

Texas Instruments Inc. and Intel Corporation report the following information.

Intel CorporationTexas Instruments$ millionsSalesPlant, Property and Equipment, NetSalesPlant, Property and Equipment, NetCurrent fiscal year$$85,018$$$58,771$$$18,941$$$3,820$Prior fiscal year$75,31349,33117,9533,197$

a$.$ Compute the PPE turnover for the current fiscal year for both companies. Comment on any difference observed.

Note: Round answers to the nearest dollar, if applicable.

NumeratorDenominatorPPE TurnoverAnswer $1$SalesAverage salesplant, property and equipment, netAverage plant, property and equipment, netAnswer $2$SalesAverage salesplant, property and equipment, netAverage plant, property and equipment, netIntel CorporationAnswer $3$Answer $4$Texas InstrumentsAnswer $5$Answer $6$

Texas Instruments generates Answer $7$moreless revenue from its PPE than does Intel. This is an efficiency measure and thus, we would conclude, that TI is Answer $8$moreless efficient with its PPE.

b$.$ Discuss ways in which high$-$tech manufacturing companies like these can increase their PPE turnover.

PPE turnover Answer $9$increasesdecreases with sales volume relative to the dollar amount of PPE on the balance sheet.