Valuation and Accounting for Assets and Working Capital

Valuation and Accounting for Assets and Working Capital
2 companies; Peugeot and Citroen, which are French car companies, Direct all questions to these 2 companies.

Task 1
Define and explain with relevant illustrations the following terms in relation to long-term assets:
a. Depreciation
b. Impairment
Task 2
Explain the accounting concepts that prescribe the recognition and use of the terms defined and explained in Task 1 in preparing true and fair financial statements and reports of organisations.
*(In terms of company you are looking at.
Task 3
Collect recent annual reports of two Public Limited Companies in the same sector or industry and examine the financial statements (Income Statements and Statements of Financial Position) and reports to: * (Both for two years)
a. Explain the policy of each company for recognising and accounting for losses in values of their long-term assets due to depreciation, and impairment.
b. Calculate the Return on Assets ratios for each company for two consecutive reporting periods and use them to compare and comment on their relative profitability.

c. Assuming that both companies did not recognise or account for depreciation and impairment of assets in their financial statements, calculate their Return on Assets for two consecutive reporting periods and compare and comment on their respective profitability.

d. Calculate working capital ratios (Inventory Turnover Days, Accounts Receivable Days, and Accounts Payable Days) for the two companies for two consecutive reporting periods and comment on the efficiency and effectiveness of the companies in managing their working capital.
Task 4
Draw a conclusion based on your findings and understanding as to the relevance of appropriate valuation and accounting of long-term assets and working capital to the management of the companies, and prospective investors.

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