Composition of Noncurrent Assets
The following schedule summarizes the noncurrent assets reported in the 1997 balance sheets of Wendy’s and Reebok:
|
Current assets (total) |
$ 382 |
$1,465 |
|
Noncurrent assets |
||
|
Property, plant, and equipment (at cost) |
1,803 |
354 |
|
Less: Accumulated depreciation |
(538) |
(197) |
|
Net |
1,265 |
157 |
|
Other long term receivables |
179 |
— |
|
Goodwill, net |
51 |
68 |
|
Other noncurrent assets |
65 |
66 |
|
Total noncurrent assets |
1,560 |
291 |
|
Total assets |
$1,942 |
$1,756 |
Required
a. Identify the major differences between these two firms in their composition of noncurrent assets. Try to explain these differences based on the types of products that each company produces.
b. Based solely on the information provided here, which company appears to have the older assets? Calculate the asset management ratios. Evaluate the results.