Discussion 2 - You may consider using the same company

Discussion Forum 2

Prior to beginning work on this discussion forum, read Chapters 6 and 8 in the course textbook, Using Financial Accounting.

You may consider using the same company and annual report that you chose for your Week 1 – Discussion Forum, Reading and Using the Annual Report Case Study discussion forum. This choice will work only if the company is using the straight-line depreciation method. The company’s choice of depreciation method can be located in the notes to the financial statement in the annual report. If the company does not use this method or does not have long-term assets, you will need to choose another company. Select a company that a fellow student has not already posted.

Using your selected company’s financial statement,

• Calculate the average life, average age, and asset turnover ratios. Be sure to show your calculations. Discuss what each ratio tells you in the context of your chosen company.
• Calculate the accounts receivable turnover ratio and convert that ratio into days. Be sure to show your calculations. Discuss what each ratio tells you in the context of your chosen company.