Financial statement data for years ending December 31 for Fallon Company are shown below.
|
2012
|
2011
|
|
Net sales
|
$740,000
|
$520,000
|
|
Fixed assets:
|
|
|
|
Beginning of year
|
425,000
|
375,000
|
|
End of year
|
500,000
|
425,000
|
a. Determine the fixed asset turnover ratio for 2012 and 2011.
b. Does the change in the fixed asset turnover ratio from 2011 to 2012 indicate a favorable or an unfavorable trend?