Question

E9-14 Computing and Interpreting the Fixed Asset Turnover Ratio from a Financial Analysts Perspective [LO 9-7] The following data were included in a recent Papaya Inc. annual report (in millions): 2013 2014 2015 2016 Net revenue $ 82,225 $ 120,119 $ 163,500 $ 167,910 Net property, plant, and equipment 4,960 9,380 15,620 17,000 Required: Compute Papaya's fixed asset turnover ratio for 2014, 2015, and 2016. (Do not round intermediate calculations. Round your answers to 1 decimal place.)

Answer 1

2014 Fixed Assets TO: 11.47

2015 Fixed Assets TO: 13.08

2106 Fixed Assets TO: 10.29

Step-by-step explanation:

Fixed turnover ratio:

`(Profit)/(Avg FA) = $FA Turnover`

​where:

`$$Average FA =(Beginning FA + Ending FA)/2`

2014 DATA

Profit: 120,119

Beginning 4960

Ending 9380

Average 7170

`(120,119)/(7170) = $FA Turnover`

Inventory TO 16.75299861

2015 data

Profit: 163,500

Beginning 9380

Ending 15,620

`(163,500)/(12,500) = $FA Turnover`

FA TO 13.08

2016

Profit: 167,910

Beginning 15,620

Ending 17,000

`(167,910)/(16,310) = $Inventory Turnover`

Inventory TO 10.2949111