Question - Bed Bath & Beyond is a leading retailer of domestic merchandise and home furnishings. The company's 2011 fixed-asset turnover ratio, using the average book value of property, plant, and equipment (PP&E) as the denominator, was approximately 7.8355. Additional information taken from the company's 2011 annual report is as follows: ($ in thousands)
Book value of PP&E-beginning of 2011: $1,119,292
Purchases of PP&E during 2011: $183,474
Depreciation of PP&E for 2011: $183,820
Equipment having a book value of $2,649 thousand was sold during 2011.
Answer the following questions:
1. How is the fixed-asset turnover ratio computed? Discuss how you would interpret Bed Bath & Beyond's ratio of 7.8355?
2. Use the data to determine Bed Bath & Beyond's net sales for 2011.
Please use as much detail and backup as possible. Do not just answer with the calculations. This is a discussion board post and I need to write two to three paragraphs.