The financial statements and notes provide information for analyzing changes in property, plant, and equipment.What ratio(s) is/are used by analysts?
A)Fixed Asset Turnover
B)Proportion of Depreciable Assets
C)Average Age of Depreciable Assets
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

All three ratios are commonly used by analysts to analyze changes in property, plant, and equipment. Fixed Asset Turnover compares the amount of revenue generated with the investment in fixed assets, while the Proportion of Depreciable Assets assesses the extent to which depreciation expense reduces net income. The Average Age of Depreciable Assets measures the age of a company’s depreciable assets and reflects the timing of when the company is likely to need to replace these assets. Therefore, all of the above ratios are relevant for analyzing changes in property, plant, and equipment.

The Financial Statements and Notes Provide Information for Analyzing Changes