The following summary data are from the May 31, 2004,

The following summary data are from the May 31, 2004, balance sheet of FedEx. All numbers are in millions.

Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,970

Property, plant, and equipment (net) . . . . . . . . . . . . . . . . . . . . 9,037

Other long-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,127

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $19,134

Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,732

Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,837

Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,529

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,098

Stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,036

Total sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $24,710


A summary of future minimum lease payments under capital leases and non-cancelable operating leases (principally aircraft, retail locations and facilities) with an initial or remaining term in excess of 1 year at May 31, 2004, is as follows (in millions):


The following summary data are from the May 31, 2004,


Instructions:
Compute the following ratio values.
1. Debt ratio (Total liabilities/Total assets).
2. Debt ratio assuming that FedEx's operating leases are accounted for as capital leases.
3. Asset turnover (Sales/Total assets).
4. Asset turnover assuming that FedEx's operating leases are accounted for as capitalleases.

Asset Turnover
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.
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...

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