B/S ratios -- beginning of year or average

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?

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.

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

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 :slight_smile:

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 :slight_smile: Just making sure someone’s paying attention :stuck_out_tongue:

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?!

Agree to above

the above sounds familar as well