Answered: End of Year (in Beginning of Year (in…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Fixed asset turnover ratio

Verizon Communications Inc. is a major telecommunications company
in the United States. Two recent balance sheets for Verzion disclosed
the following information regarding fixed assets:

Verizon's revenue for the years was $131,620 million. Assume that the
fixed asset turnover ratio fort the telecommunications industry averages
approximately 1.1

a. Determine Verizon's fixed asset turnover ratio. Round to one
decimal place.

b. Interpet this ratio with respect to the industry average.

End of Year (in
Beginning of Year (in
millions)
millions)
Property, plant, and
equipment
5220,163
$230,508
Less accumulated
136,622
140,561
depreciation
Property, plant, and
$83,541
$89,947
equipment (net)

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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