The percent used up ratio indirectly measures the likelihood of future capital expenditures that the company will have to make.

Question

Quizplus · Accepted Answer

The percent used up ratio, which compares accumulated depreciation to the original cost of fixed assets, indicates how much of the assets' useful life has been consumed. A higher ratio suggests more of the assets have been used, implying a greater likelihood of future capital expenditures to replace or repair these assets.

The Percent Used Up Ratio Indirectly Measures the Likelihood of Future