Question

Illustration: P&G’s net sales for 2020 were $76,279 million. Its total ending assets were $129,495 million, and beginning assets were $144,266 million.Each dollar invested in assets produced $0.56 in sales. If a company is using its assets efficiently, each dollar of assets will create a high amount of sales.Is it better to have a higher or lower Asset Turnover Ratio?

__________ __________ consist of standing timber and underground deposits of oil, gas, and minerals.

___________ _________ are rights, privileges, and competitive advantages that result from ownership of long-lived assets that do not possess physical substance

____ _____ = Original Cost – Accumulated Depreciation

__________ cost is cost less salvage value

Annual expense is the _______ amount for each year

Answer 1

a)

Asset turnover Ratio = Net sales / average total assets

Asset turnover Ratio = 76779 / average($129,495 ,$144,266)

It is better to have high asset turnover ratio because the company is more efficient in generating revenue from its assets

b) Natural resources consist of standing timber and underground deposits of oil, gas, and minerals.

c) Intangible Assets are rights, privileges, and competitive advantages that result from ownership of long-lived assets that do not possess physical substance

d) Book value = Original Cost – Accumulated Depreciation

e) Depreciated cost is cost less salvage value