B/S ratios -- beginning of year or average average

dmrktrading

Unless given the proper info, if only given two year's B/S and asked to compute a ratio that involves a B/S (i.e. NI/A) do you use beginning of year B/S figures or average?

genuinecfa

Without any instructions, I would do the average first and see if it is one of the answer choices. If not, then I would use beginning.

NO EXCUSES

Analyze_This

asset turnover (NI/Assets) is 100% supposed to be average assets. Look on page 3 of FRA (CFAI text)

bdavi77962

gangstarr Wrote:
-------------------------------------------------------
> asset turnover (NI/Assets) is 100% supposed to be
> average assets. Look on page 3 of FRA (CFAI text)

Asset Turnover is Sales/Assets

CPATrader

Chuckrox8 Wrote:
-------------------------------------------------------
> gangstarr Wrote:
> --------------------------------------------------
> -----
> > asset turnover (NI/Assets) is 100% supposed to
> be
> > average assets. Look on page 3 of FRA (CFAI
> text)
>
> Asset Turnover is Sales/Assets


Just making sure someone's paying attention

YAhmed

I think that if it's a mixed ratio (with BS and IS items) you use the average. If it's a pure BS ratio, you use the beginning value.

Could someone please confirm this?!

kickthatcfa

Agree to above