Verizon Communications Inc. is a major telecommunications company in the United States. Two recent balance sheets for Verizon disclosed the following information regarding fixed assets:
________________________________End of Year (In millions) ____________ Beginning of ______________________________________________________________Year (In millions)
Property, plant, and equipment ................... $220,163 ............................... $230,508
Less accumulated depreciation .................... 136,622 .................................. 140,561
Property, plant, and equipment (net) ............. $ 83,541 ................................. $ 89,947
Verizon's revenue for the year was $131,620 million. Assume that the fixed asset turnover ratio for the telecommunications industry averages approximately 1.1.
a. Determine Verizon's fixed asset turnover ratio. Round to one decimal place.
b. Interpret this ratio with respect to the industry average.