1. Compare the fixed asset turnover ratios for Delta Air Lines (see the chapter illustration on page 272), United (FA 7-1), Southwest (FA 7-2), and JetBlue (FA 7-3). Use Year 2 of Delta and JetBlue for your comparison.
See illustration, The fixed asset turnover measures how efficiently a company is generating sales from its property, plant, and equipment. It is computed as follows:

To illustrate, assume the following data (in millions) adapted from recent financial statements for Delta Air Lines are used.

The fixed asset turnover (rounded to two decimal places) for Delta Air Lines is computed as follows:

2. Comment on the results from part(1).

Transcribed Image Text:

Net Sales Fixed Asset Turnover Average Net Property, Plant, and Equipment Year 2 Year 1 35,115 31,755 Net sales Beginning of year property, plant, and equipment End of year property, plant, and equipment 20307 20433 20,433 20,223 20,307 Net sales Average net property, plant, and equipment: Year 2 Year1 35,115 $31,755 20,265 ($20,307+ $20,223)2 ($20,433+$20,307)2 20,370 Fixed asset turnover ($35,115$20,265) ($31,755 $20,370) 1.73 1.56