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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Asset turnover

Three major segments of the transportation industry are motor carriers such as YRC Worldwide, railroads such as Union Pacific, and transportation logistics services such as C.H. Robinson Worldwide, Inc. Recent financial statement information for these three companies follows (in thousands):

  YRC Union Pacific C.H. Robinson
Sales $4,832,400 $21,813,000 $13,476,084
Average total assets 1,939,800 53,486.000 3,199,348

a. Determine the asset turnover for all three companies. Round to one decimal place.

b. Assume that the asset turnover for each company represents its respective industry segment. Interpret the differences in the asset turnover in terms of the operating characteristics of each of the respective segments.

(a)

To determine

Financial Ratios: Financial ratios are the metrics used to evaluate the liquidity, capabilities, profitability, and overall performance of a company.

To compute: Asset turnover ratio for all three companies.

Given info: Sales and average total assets

Explanation

Asset turnover ratio is used to determine the asset’s efficiency towards sales. Asset turnover ratio is determined by dividing sales and average total assets...

(b)

To determine

To interpret: The differences in asset turnover.

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