Verizon Communications is a major telecommunications company in the United States. Two recent balance sheets for Verizon
Question:
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.
Asset TurnoverAsset 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.
Step by Step Answer:
Financial Accounting
ISBN: 978-1305088436
14th edition
Authors: Carl S. Warren, Jim Reeve, Jonathan Duchac