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Fixed asset turnover ratio Verizon Communications Inc. is a major telecommunications company in the United States. Two recent balance sheets for Verizon disclosed the following
Fixed asset turnover ratio Verizon Communications Inc. is a major telecommunications company in the United States. Two recent balance sheets for Verizon disclosed the following information regarding fixed assets: Beginning of End of Year Year Property, plant, and equipment Less accumulated depreciation Property, plant, and equipment (net) Verizon's revenue for the year was $131,620 million. Assume that the fixed asset turnover ratio for the telecommunications industry averages approximately 1.1. a. Determine Verizon's fixed asset turnover ratio. Round to one decimal place. in millions) (in millions) $230,508 140,561 $ 89,947 $220,163 136,622 $ 83,541 b. Interpret this ratio with respect to the industry average. 1. Verizon earns more revenue per dollar of fixed assets as compared to the industry average. Thus Verizon is using its fixed assets more efficiently. 2. Verizon earns less revenue per dollar of fixed assets as compared to the industry average. Thus Verizon is not using its fixed assets more efficiently. 3. Verizon's fixed asset turnover is same as the industry average. Thus Verizon is using its fixed assets as efficiently as the any other company in the industry
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