What factors must management consider when deciding whether to continue using an asset, repair, or replace it?© BrainMass Inc. brainmass.com October 17, 2018, 12:00 pm ad1c9bdddf
The decision to keep or replace is driven typically by the cost to replace it versus the cost to repair, cost of downtime while repairs are conducted, lost profits due ...
Analysis of Financial Statements and Preparation of Income Statements
1. Prepare an income statement for the month of February. Compute the ratio of total operating expense to total revenue and operating income to total revenue.
2. Compute the per unit cost of repairing one windshield.
3. The manager of The Windshield People must keep unit operating cost below $50 per windshield in order to get his bonus. Did he meet the goal?
4. What kind of system could The Windshield People use to integrate all its data?
1. Which of these suggested strategies are inconsistent with IMA standards?
2. What should Wallace do if Cauvet insists that she follow all of these suggestions?
1. Compute the following ratios for both companies for the current year, and decide which company's stock better fits your investment strategy.
" a. Acid-test ratio
b. Inventory turnover
c. Days' sales in receivables
d. Debt ratio
e. Earnings per share of common stock
f. Price/earnings ratio
g. Dividend payout"