Computing Asset Related Ratios Dicks Sporting Goods included the following infor

Question

Computing Asset Related Ratios
Dicks Sporting Goods included the following information in its year-end 2015 10-K

a. Compute PPE turnover.
Round answer to one decimal place.
Answer

b. Compute the average useful life.
Round answer to one decimal place.
Answer years


c. Compute the percentage used up of the PPE.
Round answer to one decimal place (ex: 0.2345 = 23.5%)
Answer%

Sales $6,882,077 PPE, gross 2,598,648 Land Construction in progress 124,400 Accumulated depreciation 1,317,429 PPE, net, at year-end 2014 1,203,382 Depreciation expense 193,594

Explanation / Answer

a. Computation of PPE Turnover: PPE Turnover = Sales / Average PPE, Net = $68,82,077 / $12,42,301 = 5.5 Average PPE, Net: 2015 PPE, Gross = $                               25,98,648 Less: Accumulated Depreciation = $                               13,17,429 PPE, Net = $                               12,81,219 2014 PPE, Net = $                               12,03,382 Average PPE, Net = (2014 PPE, Net + 2015 PPE, Net) / 2 = $                               12,42,301 b. Computation of Average useful life: Average useful life = Depreciable cost of asset / Depreciable expense = $24,74,248 / $193,594 = 12.8 years Depreciable cost of asset: Average PPE, Gross = $                               25,98,648 Less: Land = $                                              -   Less: Construction in process = $                                 1,24,400 Depreciable cost of asset = $                               24,74,248 c. Computation of Percentage of used up of the PPE: Percentage of used up of the PPE = Accumulated Depreciation / Depreciable cost of asset = $13,17,429 / $24,74,248 = 53.2%

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