The following information was reported by Cutters Air Cargo Service for 2007: Net fixed assets (beginning of
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The following information was reported by Cutter’s Air Cargo Service for 2007:
Net fixed assets (beginning of year) .......$1,500,000
Net fixed assets (end of year) ................... 2,300,000
Net sales for the year ................................ 3,300,000
Net income for the year ............................ 1,600,000
Compute the company’s fixed asset turnover ratio for the year. What can you say about Cutter’s ratio when compared to Southwest’s 2007 ratio?
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.
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Cutters ratio is twice as high as Southwests 2007 ratio of ...View the full answer
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