This workout asks us to do three things Firstly, calculate accumulated depreciation divided by gross PP&E Secondly, what do you notice about the relative age of the assets over the years? And thirdly, why is this the case? So what have we been given? We've been given gross PP&E, accumulated depreciation and the third item (an interesting item) doesn't immediately look relevant Income statement depreciation expense Well let's answer the first question, let's calculate accumulated depreciation divided by gross PP&E So in the historical year, we can see that our assets are at 91.1% of their life. So quite a lot of their life is now behind them But as I copy that to the right, I can see that the assets are getting younger So that is what I notice about the relative age of the assets over the years. They are indeed getting younger as we go to projected year 4 So why is this the case? Well firstly, I notice that gross PP&E is increasing much quicker than accumulated depreciation is I also notice that the income statement depreciation expense is going up quite significantly each year In the historical year, we were only depreciating 1,000 a year I projected year 4, we're up to 5,747.3 This says to me that the company is significantly increasing its asset base So, gross PP&E is increasing quicker than accumulated depreciation This indicates an expansion of assets, this company is looking to grow