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Essay / Research Paper Abstract
This 3-page paper discusses asset utilization as it pertains to Toyota and Williams Sonoma. Bibliography lists 4 sources.
Page Count:
3 pages (~225 words per page)
File: D0_MTcompasst.rtf
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Unformatted sample text from the term paper:
(a domestic retail company). Well also offer a conclusion for Toyota, William Sonoma and Verizon, which provides telecommunications services to individuals and companies.
According to Lawrence Tuller, an asset utilization ratio is one that measures how quickly a business can turn assets into sales (meaning revenue) (Answers.com, 2009). The four primary
AURs are receivables turnovers (the number of times that receivable balances are taken in annually); inventory turnover (annual cost of sales by average inventory); fixed asset turnover and total asset
turnover, both of which explain how well a company uses its assets to generate sales (Answers.com, 2009). The formula for asset turnover ratio is sales (or revenue) over fixed assets.
For purposes of this paper, well measure AU through a general asset turnover ratio. The period well examine for Williams-Sonoma is 2007
(as we dont have information on cash flow for anything later than January 2008). The revenue for 2007 stands at $3.7 billion, while the companies net fixed assets were at
$981 million. If we take the revenue (sales) divided by net fixed assets, we have the following formula: $3,700,000,000 / $981,000,000 = 3.77
For a retailer, this is fairly good - it shows that the fixed assets are doing a pretty good job in generating income (anything less than a
1 would show some real problems). Now lets move onto Toyota. Were taking our figures from the Japanese company (rather than Toyota
USA), as Toyota is likely to use IFRS standards, versus Toyota USA, which is likely to rely on US GAAP for reporting. Again, well use figures from 2007 for our
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