Texas Instruments (TI) designs and manufactures semiconductor products for usein 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 variousimaging products, such as printers and fax machines. Exhibit 4.25 presents selecteddata 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 InstrumentsSalesCost of goods soldCapital expendituresAverage fixed assetsPercentage fixed assets depreciatedPercentage change in salesHewlett-PackardSalesCost of goods soldCapital expendituresAverage fixed assetsPercentage fixed assets depreciatedPercentage change in salesRequiredYear 3$ 12,5016,2567633,45754.9%(9.6)%$114,55286,3513,69511,05074.7%(3.2)%Year 2$ 13,8355,4326863,78052.3%(3.0)%$118,36487,0652,9909,31872.4%+13.5%Year 1$ 14,2555,7751,2723,92549.0%+6.4%$104,28676,9653,0407,33187.0%+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 HPduring the three-year period.

Fixed asset turnover ratio is an important activity ratio or an asset management ratio.This ratio…

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

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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