The following information was reported by Amuse Yourself Parks (AYP) for 2008: N
ID: 2353020 • Letter: T
Question
The following information was reported by Amuse Yourself Parks (AYP) for 2008:Net fixed assets (beginning of year) $ 8,550,000
Net fixed assets (end of year) 8,360,000
Net sales for the year 4,935,000
Net income for the year 1,835,000
(a) Compute the company's fixed asset turnover ratio for the year. (Round your answer to 2 decimal places.)
Fixed asset turnover ratio :
(b) What can you say about AYP's fixed asset turnover ratio when compared to Cedar Fair's 2008 ratio in Exhibit 9.5? (Round your answer to 2 decimal places.)
AYP's fixed asset turnover ratio of __________is higher than Cedar Fair's 2008 ratio of 0.53
Explanation / Answer
FA Ratio = Sales/Avge fixed Assets = 4935000/{(8550000+8360000)/2} ie FA Ratio = 0.58 ..................Ans (a) AYP's fixed asset turnover ratio of 0.58 is higher than Cedar Fair's 2008 ratio of 0.53 ..............Ans (b)
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