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Computing Asset Related Ratios Dicks Sporting Goods included the following information in its year-end 2015 10-K...

Computing Asset Related Ratios
Dicks Sporting Goods included the following information in its year-end 2015 10-K

Sales $6,882,077
PPE, gross 2,598,648
Land
Construction in progress 124,400
Accumulated depreciation 1,317,429
PPE, net, at year-end 2014 1,203,382
Depreciation expense 193,594


a. Compute PPE turnover.
Round answer to one decimal place.
Answer

b. Compute the average useful life.
Round answer to one decimal place.
Answer years


c. Compute the percentage used up of the PPE.
Round answer to one decimal place (ex: 0.2345 = 23.5%)
Answer%

Solutions

Expert Solution

a. Computation of PPE Turnover:
PPE Turnover = Sales / Average PPE, Net
= $68,82,077 / $12,42,301
= 5.5
Average PPE, Net:
2015
PPE, Gross = $                               25,98,648
Less: Accumulated Depreciation = $                               13,17,429
PPE, Net = $                               12,81,219
2014
PPE, Net = $                               12,03,382
Average PPE, Net = (2014 PPE, Net + 2015 PPE, Net) / 2
= $                               12,42,301
b. Computation of Average useful life:
Average useful life = Depreciable cost of asset / Depreciable expense
= $24,74,248 / $193,594
= 12.8 years
Depreciable cost of asset:
Average PPE, Gross = $                               25,98,648
Less: Land = $                                              -  
Less: Construction in process = $                                 1,24,400
Depreciable cost of asset = $                               24,74,248
c. Computation of Percentage of used up of the PPE:
Percentage of used up of the PPE = Accumulated Depreciation / Depreciable cost of asset
= $13,17,429 / $24,74,248
= 53.2%

ekkarill92 answered 1 year ago
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