Using Financial Reports: Analyzing the Age of Assets
In its recent annual report, Sysco Corporation noted it “is the largest North American distributor of food and related products primarily to the foodservice ‘food-away-from-home’ industry. We provide products and related services to approximately 400,000 customers, including restaurants, healthcare, and educational facilities, lodging establishments, and other foodservice customers.” A note to a recent annual report for Sysco contained the following information:
(in thousands) | Current Year |
Land | $ 307,328 |
Buildings and improvements | 2,818,300 |
Fleet and equipment | 2,072,116 |
Computer hardware and software | 569,669 |
| 5,767,413 |
Less accumulated depreciation | 2,788,213 |
| $2,979,200 |
Depreciation expense (in thousands of dollars) charged to operations was $361,062 in the current year. Depreciation generally is computed using the straight-line method for financial reporting purposes.
Required:
1. What is your best estimate of the average expected life for Sysco’s depreciable assets?
2. What is your best estimate of the average age of Sysco’s depreciable assets?
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