Compute progressive fixed asset turnover ratio

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Reference no: EM13537092

Progressive Company reported the following asset values in 2014 and 2015:
Cash 2015-$50000 2014-$45000
Accounts receivable 2015-$300000 2014-$220000
Inventory 2015-$650000 2014-$510000
Land 2015-$600000 2014-$400000
Buildings 2015-$900000 2014-$800000
Equipment 2015-$350000 2014-$250000

In addition, in 2015, Progressive had sales of $4,800,000; cost of good sold for the year was $2,900,000. As of the end of 2014, the fair value of Progressive's total assets was $3,000,000. Of the excess of fair value over book value, $100,000 resulted from the fact that Progressive uses LIFO for inventory valuation. As of the end of 2015, the fair value of Progressive's total assets was $3,800,000, and Progressive's LIFO reserve was $150,000.

1. Compute Progressive's fixed asset turnover ratio for 2015.
2. Using the fair value of fixed assets instead of their book values, recompute Progressive's fixed asset turnover ratio for 2015. State any assumptions that you make.

Reference no: EM13537092

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