Question - Lennox International makes air conditioning, heating, and fireplace systems for residential and commercial uses, as well as commercial refrigeration equipment. American Standard Companies is a leading maker of air conditioning systems, plumbing products, and automotive braking systems. Selected financial statement data and asset utilization ratios for each company follow:
|
American Standard Companies
|
|
|
Year 1
|
Year2
|
Year 3
|
|
Sales
|
$7,598,370
|
$7,465,300
|
$7,795,400
|
|
ROA
|
0.09
|
0.08
|
0.09
|
|
Current Assets Turnover
|
4.22
|
3.96
|
3.99
|
|
Fixed (long-term) asset turnover
|
2.61
|
2.57
|
2.57
|
|
Total Assets Turnover
|
1.61
|
1.56
|
1.56
|
|
Lennox International
|
|
|
Year 1
|
Year2
|
Year 3
|
|
Sales
|
$3,242,204
|
$3,113,649
|
$3,025,767
|
|
ROA
|
0.05
|
(0.01)
|
0.05
|
|
Current Assets Turnover
|
3.62
|
3.86
|
4.36
|
|
Fixed (long-term) asset turnover
|
3.33
|
2.79
|
3.14
|
|
Total Assets Turnover
|
1.73
|
1.62
|
1.83
|
Compare the asset utilization effectiveness of these two companies. Which company seems to be doing the better job? Are any important industry trends apparent from these data?