identify about proposal

Accounting
Tutor: None Selected Time limit: 1 Day

Current net sales $80 expand that will increase by $28 net sales. average total assets will increase from $50to $60.

under current condittion the asset turn over is 1.6 and under preposed 1.6

I need to evaluate and comment on the merits of the poposal given your analys in part 1. identify any concers you wold like express about the proposal.

Jul 16th, 2015

Thank you for the opportunity to help you with your question!

kindly rephrase your question in more simple business terms

Please let me know if you need any clarification. I'm always happy to answer your questions.
Jul 16th, 2015

Assume that the company currently has net sales of $80, and that it is planning an expansion that will increase net sales by $28. To accomplish this expansion, company must increase its average total assets from $50 to $60

Part 1 ---Compute the company's total asset turnover under (a) current conditions and (b) proposed conditions.

current condition is 1.6

proposed is 1.8

I go this part but stock with next one

Evaluate and comment on the merits of the proposal given your analysis in part 1. Identify any concers you would express about the proposal

Jul 16th, 2015

thank you for letting me assist you with your question

asset turnover=sales divide by total assets

      current      =80/50

                        =1.6

proposed      =108/60

                     =1.8

The amount of sales or revenues generated per dollar of assets. The Asset Turnover ratio is an indicator of the efficiency with which a company is deploying its assets.

Basically the higher the ratio, the better it is,as this indicates that the company is generating more revenues per dollar of assets.  But since this ratio varies widely from one industry to the another, comparisons are only valid when they are made for different companies in the same sector.

The Asset Turnover ratio is also a key component of DuPont Analysis, which breaks down Return on Equity into three parts, the other two being profit margin and financial leverage.

i  hope this will satisfy you, if you need further clarification kindly let me know.

Jul 16th, 2015

thank you so much

Jul 16th, 2015

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