# T-Mobile

Calculate the average life, average age, and asset turnover ratios. Discuss what each ratio tells you in the context of your chosen company.

T-Mobile uses the straight-line method of depreciation as this method gives a more accurate estimate of asset age. The useful life of an asset, also known as economic life or service life, is an estimate of how long you can reasonably expect to use an asset for the benefit of your organization (Porter & Norton, 2018). It also tells you how long the asset will remain functional and generate income. The three ratios that are used for the purpose of monitoring depreciation are the average life ratio (ALR) which measures the average life of the asset. T-Mobile’s ALR is 7.95 years 95188/11967 (Property & Plant/Depreciation Expense).

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The average age ratio for T-Mobile is 4.44 years 53102/11967 (Accumulated depreciation/Depreciation Expense).

The final ratio is the asset turnover ratio (ATR), which measures the number of assets needed for every dollar of sales. The ATR for T-Mobile is .380. ATR for the technology industry will typically be around 0.61. T-Mobile absorbed much of Sprint’s bad debt and technology and inventory that has phased out. The next fiscal year 2023 will see a slimmer wireless competitor with cutting-edge technology.

Calculate the accounts receivable turnover ratio and convert that ratio into days. Discuss what each ratio tells you in the context of your chosen company.

The accounts receivables turnover ratio (ARTR) measures the number of times a company collects its average accounts receivable balance. An efficient company has a higher accounts receivable turnover ratio while an inefficient company has a lower ratio. T-Mobile’s ARTR is 18.84, which is a good indication of how well T-Mobile collects its receivables. On average T-Mobile collects its receivables in 19 days on average.