Read the following case and compute the fixed asset turnover ratio. Explain in your own words how the result of the turnover ratio of both companies is interpreted. La Flor de Mayo and La Rosa del Monte compete in the moving service sector. The greatest assets of these companies are moving trucks, warehouses and technological equipment. Sales and the average book value of fixed assets (book value) reported in the latest financial statements of each company is as follows: La Flor de Mayo La Rosa del Monte Sales (in millions) $12,320 $15,500 Average book value of fixed assets (in millions) $7,000 $8,300
Read the following case and compute the fixed asset turnover ratio. Explain in your own words how the result of the turnover ratio of both companies is interpreted. La Flor de Mayo and La Rosa del Monte compete in the moving service sector. The greatest assets of these companies are moving trucks, warehouses and technological equipment. Sales and the average book value of fixed assets (book value) reported in the latest financial statements of each company is as follows: La Flor de Mayo La Rosa del Monte Sales (in millions) $12,320 $15,500 Average book value of fixed assets (in millions) $7,000 $8,300
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Read the following case and compute the fixed asset turnover ratio.
Explain in your own words how the result of the turnover ratio of both companies is interpreted.
La Flor de Mayo and La Rosa del Monte compete in the moving service sector. The greatest assets of these companies are moving trucks, warehouses and technological equipment. Sales and the average book value of fixed assets (book value) reported in the latest financial statements of each company is as follows:
|
|
La Flor de Mayo |
La Rosa del Monte |
|
Sales (in millions) |
$12,320 |
$15,500 |
|
Average book value of fixed assets (in millions) |
$7,000 |
$8,300 |
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