Fixed asset turnover ratio OBJ. 7 Verizon Communications is a major telecommunications company in the United States. Two recent balance sheets for Verizon disclosed the following information regarding fixed assets:

Year 2

(in millions)

Year 1

(in millions)

Plant, property, and equipment $209,575 $215,626 Less accumulated depreciation 120,933 127,192

$ 88,642 $ 88,434 Verizon’s revenue for Year 2 was $115,846 million. Assume the fixed asset turnover for the telecommunications industry averages approximately 1.10.

a. Determine Verizon’s fixed asset turnover ratio for Year 2. Round to two decimal places.

b. Interpret Verizon’s fixed asset turnover ratio.