During 2018,Ambiance Company Reported Net Revenue of $3,600,000

question 86

Essay

During 2018,Ambiance Company reported net revenue of $3,600,000.The company reported net fixed assets of $710,000 on January 1,2018 and net fixed assets of $890,000 on December 31,2018.
Required:
Part a.Calculate the fixed asset turnover ratio.
Part b.Assume the 2018 fixed asset turnover ratio was lower than the 2017 ratio.Explain how an analyst might interpret this change.
Part c.Describe at least one circumstance that might have caused the fixed asset turnover ratio to decline and be consistent with bad news.
Part d.Describe at least one circumstance that might have caused the fixed asset turnover ratio to decline and yet be consistent with good news.

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Definitions:

Light

Electromagnetic radiation visible to the human eye, essential for vision and involved in a variety of biological and psychological effects on humans and other organisms.

Classical Conditioning

A conditioning method in which a response originally produced by the second of two repeatedly paired stimuli comes to be evoked by the first stimulus.

Operant Conditioning

An instructional technique where behavior modification is achieved through the application of rewards or sanctions.

Primary Reinforcement

A type of reinforcement that involves using innate, biological needs such as food, water, and warmth as rewards.