Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed

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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Integrated Audit Practice Case

Authors: David S. Kerr, Randal J. Elder, Alvin A. Arens

5th Edition

0912503351, 9780912503356

More Books

Students also viewed these Accounting questions

Question

Define Management by exception

Answered: 1 week ago

Question

Explain the importance of staffing in business organisations

Answered: 1 week ago

Question

What are the types of forms of communication ?

Answered: 1 week ago

Question

20. What do you want them to do? (what actions should they take)?

Answered: 1 week ago