UESTION 1 'Average useful life', 'Average age of PPE assets' and 'Asset Turnover' are three measures that decision makers can use to analyse the PPE...

Published on September 2017 | Categories: Taxes & Accounting | Downloads: 80 | Comments: 0 | Views: 404
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UESTION 1 'Average useful life’, ‘Average age of PPE assets’ and ‘Asset Turnover’ are three measures that decision makers can use to analyse the PPE (Property, Plant & Equipment) assets of entities. Fresh Food Ltd and Cheap Food Ltd operate in the same industry. Each entity depreciates its PPE (Property, Plant & Equipment) assets using the straight line approach. An investigation of their financial statements reveals the following information: (Amounts in millions) Fresh Food Ltd Cheap Food Ltd Sales $ 22,653 $ 33,812 Total Assets (Average) 22,088 36,167 Accumulated Depreciation 2,701 4,359 Depreciation Expense 381 697 Cost of Plant Assets (Average) 7,715 10,237 Required: What conclusion concerning the management of plant assets can be drawn from these data? (word limit: 180 – 240 words)

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UESTION 1 'Average useful life’, ‘Average age of PPE assets’ and ‘Asset Turnover’ are three measures that decision makers can use to analyse the PPE (Property, Plant & Equipment) assets of entities. Fresh Food Ltd and Cheap Food Ltd operate in the same industry. Each entity depreciates its PPE (Property, Plant & Equipment) assets using the straight line approach. An investigation of their financial statements reveals the following information: (Amounts in millions) Fresh Food Ltd Cheap Food Ltd Sales $ 22,653 $ 33,812 Total Assets (Average) 22,088 36,167 Accumulated Depreciation 2,701 4,359 Depreciation Expense 381 697 Cost of Plant Assets (Average) 7,715 10,237 Required: What conclusion concerning the management of plant assets can be drawn from these data? (word limit: 180 – 240 words)

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