The following summary data are from the May 31, 2009, balance sheet of FedEx. All numbers are

Question:

The following summary data are from the May 31, 2009, of FedEx. All numbers are in millions.
Total current assets . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7,116
Property, plant, and equipment (net) . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 13,417
Other long-term assets . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . 3,711
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . $24,244
Current liabilities. . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,524
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,930
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,164
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,618
Stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,626
Total sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $35,497
A summary of future minimum lease payments under capital leases and non-cancelable operating leases with an initial or remaining term in excess of one year at May 31, 2009 is as follows (in millions):

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 capital leases.

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...