Question

Comparative figures for Apple and Google follow. $ millions Total assets Net sales Current Year $375,319 229, 234 Apple One Year Prior $321,686 215,639 Two Years Prior $ 290,345 233,715 Current Year $ 197,295 1 10,855 Google One Year Prior $167,497 90,272 Two Years Prior $ 147,461 74,989 Required: 1. Compute total asset turnover for the most recent two years for Apple and Google using the data shown. 2. In the current year, which company is more efficient in generating net sales given total assets? 3. Does each company's asset turnover underperform or outperform the industry (assumed) asset turnover of 0.5 for: (a) Apple and (b) Google? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute total asset turnover for the most recent two years for Apple and Google using the data shown. (Round your answers to 2 decimal places.) Total Asset Turnover Current Year One Year Prior times times times times Apple Google Required 1 Required 2 >

Answer 1

Total assets turnover = sales/average total assets

(1)

for Apple:

for current year,

total assets turnover = $229234/{($375319 + $321686)/2} = 0.66 times

for one year prior,

total assets turnover = $215639/{($321686 + $290345)/2} = 0.70 times

for Google,

for current year,

total assets turnover = $110855/{($197295 + $167497)/2} = 0.61 times

for one year prior,

total assets turnover = $90272/{($167497 + $147461)/2} = 0.54 times

(2)

in the current year, Apple is more efficient in generating net sales given total assets

(3)

industry asset turnover = 0.5 times

therefore,

Apple company asset turnover outperforms the industry asset turnover

also, Google company asset turnover outperforms the industry asset turnover

Answer 2

Total assets turnover = sales/average total assets

(1)

for Apple:

for current year,

total assets turnover = $229234/{($375319 + $321686)/2} = 0.66 times

for one year prior,

total assets turnover = $215639/{($321686 + $290345)/2} = 0.70 times

for Google,

for current year,

total assets turnover = $110855/{($197295 + $167497)/2} = 0.61 times

for one year prior,

total assets turnover = $90272/{($167497 + $147461)/2} = 0.57 times

(2)

in the current year, Apple is more efficient in generating net sales given total assets

(3)

industry asset turnover = 0.5 times

therefore,

Apple company asset turnover outperforms the industry asset turnover

also, Google company asset turnover outperforms the industry asset turnover