FedEx Corporation and United Parcel Service, Inc. compete in the package delivery business. The major fixed assets for each business include aircraft, sorting and handling facilities, delivery vehicles, and information technology. The sales and average book value of fixed assets reported on recent financial statements for each company were as follows: FedEx Sales (in millions) $65,450 Average book value of fixed assets (in millions) 27,068 UPS $71,861 24,347 a. Compute the fixed asset turnover ratio for each company. Round to one decimal place. b. Which company appears more efficient in using fixed assets? c. Interpret the meaning of the ratio for the more efficient company
EX 10-25 Fixed asset turnover ratio OBJ. 7
FedEx Corporation and United Parcel Service, Inc. compete in the package delivery business. The major fixed assets for each business include aircraft, sorting and handling facilities, delivery vehicles, and information technology. The sales and average book value of fixed assets reported on recent financial statements for each company were as follows:
FedEx
Sales (in millions) $65,450 Average book value of fixed assets (in millions) 27,068
UPS
$71,861 24,347
a. Compute the fixed asset turnover ratio for each company. Round to one decimal place. b. Which company appears more efficient in using fixed assets?
c. Interpret the meaning of the ratio for the more efficient company
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