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Required a. Compute the fixed assets turnover for each firm for Years 1, 2, and 3. b. Suggest reasons for the differences in the fixed assets turnovers of TI and HP. c. Suggest reasons for the changes in the fixed assets turnovers of TI and HP during the three-year period.

Required a. Compute the fixed assets turnover for each firm for Years 1, 2, and 3. b. Suggest reasons for the differences in the fixed assets turnovers of TI and HP. c. Suggest reasons for the changes in the fixed assets turnovers of TI and HP during the three-year period.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Texas Instruments (TI) designs and manufactures semiconductor products for use in computers, telecommunications equipment, automobiles, and other electronics- based products. The manufacturing of semiconductors is highly capital-intensive. Hewlett-Packard Corporation (HP) manufactures computer hardware and various imaging products, such as printers and fax machines. Exhibit 4.25 presents selected data for TI and HP for three recent years. Exhibit 4.25 Selected Data for Texas Instruments and Hewlett-Packard (Amounts in Millions) (Problem 4.19) Texas Instruments Sales Cost of goods sold Capital expenditures Average fixed assets Percentage fixed assets depreciated Percentage change in sales Hewlett-Packard Sales Cost of goods sold Capital expenditures Average fixed assets Percentage fixed assets depreciated Percentage change in sales Required Year 3 $ 12,501 6,256 763 3,457 54.9% (9.6)% $114,552 86,351 3,695 11,050 74.7% (3.2)% Year 2 $ 13,835 5,432 686 3,780 52.3% (3.0)% $118,364 87,065 2,990 9,318 72.4% +13.5% Year 1 $ 14,255 5,775 1,272 3,925 49.0% +6.4% $104,286 76,965 3,040 7,331 87.0% +13.8% a. Compute the fixed assets turnover for each firm for Years 1, 2, and 3. b. Suggest reasons for the differences in the fixed assets turnovers of TI and HP. c. Suggest reasons for the changes in the fixed assets turnovers of TI and HP during the three-year period.
Transcribed Image Text:Texas Instruments (TI) designs and manufactures semiconductor products for use in computers, telecommunications equipment, automobiles, and other electronics- based products. The manufacturing of semiconductors is highly capital-intensive. Hewlett-Packard Corporation (HP) manufactures computer hardware and various imaging products, such as printers and fax machines. Exhibit 4.25 presents selected data for TI and HP for three recent years. Exhibit 4.25 Selected Data for Texas Instruments and Hewlett-Packard (Amounts in Millions) (Problem 4.19) Texas Instruments Sales Cost of goods sold Capital expenditures Average fixed assets Percentage fixed assets depreciated Percentage change in sales Hewlett-Packard Sales Cost of goods sold Capital expenditures Average fixed assets Percentage fixed assets depreciated Percentage change in sales Required Year 3 $ 12,501 6,256 763 3,457 54.9% (9.6)% $114,552 86,351 3,695 11,050 74.7% (3.2)% Year 2 $ 13,835 5,432 686 3,780 52.3% (3.0)% $118,364 87,065 2,990 9,318 72.4% +13.5% Year 1 $ 14,255 5,775 1,272 3,925 49.0% +6.4% $104,286 76,965 3,040 7,331 87.0% +13.8% a. Compute the fixed assets turnover for each firm for Years 1, 2, and 3. b. Suggest reasons for the differences in the fixed assets turnovers of TI and HP. c. Suggest reasons for the changes in the fixed assets turnovers of TI and HP during the three-year period.
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