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At December 31,2018 and 2017,respectively,Tyler Industries Reported Land,buildings,and Equipment Totaling

Question 127

Essay

At December 31,2018 and 2017,respectively,Tyler Industries reported land,buildings,and equipment totaling $5,655,000 and $2,152,000 along with Accumulated Depreciation of $1,000,000 and $600,000 on its balance sheets.Revenues amounted to $38,227,000 and $12,113,000 for 2018 and 2017,respectively.
Required:
Part a.Compute Tyler's fixed asset turnover ratio for the year ended December 31,2018.
Part b.Assume that Tyler's fixed asset turnover ratio increased from 2017 to 2018.How might an analyst interpret an increasing ratio?
Part c.Alternatively,assume that Tyler's fixed asset turnover rate decreased.Does a declining ratio always indicate a negative trend?

Correct Answer:

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Part a
Average net fixed assets = (Begin...

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