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Ratio of sales to assets Three major segments of the transportation industry are motor carriers, such as YRC Worldwide ; railroads, such as Union Pacific; and transportation arrangement services, such as C.H. Robinson Worldwide Inc. Recent financial statement information for these three companies is shown as follows (in thousands of dollars): a. Determine the ratio of sales to assets for all three companies. Round to one decimal place. b. Assume that the ratio of sales to assets for each company represents their respective industry segment. Interpret the differences in the ratio of sales to assets in terms of the operating characteristics of each of the respective segments.

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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285743615

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Section
BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285743615
Chapter 17, Problem 17.16EX
Textbook Problem
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Ratio of sales to assets

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

Chapter 17, Problem 17.16EX, Ratio of sales to assets Three major segments of the transportation industry are motor carriers,

a. Determine the ratio of sales to assets for all three companies. Round to one decimal place.

b. Assume that the ratio of sales to assets for each company represents their respective industry segment. Interpret the differences in the ratio of sales to assets 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 of Solution

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.

Formula:

b)

To determine

To interpret: The differences in asset turnover.

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Chapter 17 Solutions

Accounting (Text Only)
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Ch. 17 - Horizontal analysis The comparative temporary...Ch. 17 - Horizontal analysis The comparative accounts...Ch. 17 - Vertical analysis Income statement information for...Ch. 17 - Vertical analysis Income statement information for...Ch. 17 - Current position analysis The following items are...Ch. 17 - Current position analysis The followingitems are...Ch. 17 - Accounts receivable analysis A company reports the...Ch. 17 - Accounts receivable analysis A company reports the...Ch. 17 - Inventory analysis A company reports the...Ch. 17 - Inventory analysis A company reports the...Ch. 17 - Long-term solvency analysis The following...Ch. 17 - Long -term solvency analysis The following...Ch. 17 - Times interest earned A company reports the...Ch. 17 - Times interest earned A company reports the...Ch. 17 - Asset turnover A company reports the following:...Ch. 17 - Asset turnover A company reports the following:...Ch. 17 - Return on total assets A company reports the...Ch. 17 - Return on total assets A company reports the...Ch. 17 - Common stockholders profitability analysis A...Ch. 17 - Common stockholders profitability analysis A...Ch. 17 - Earnings per share and price-earnings ratio A...Ch. 17 - Earnings per share and price-earnings ratio A...Ch. 17 - Vertical analysis of income statement Revenue and...Ch. 17 - Vertical analysis of income statement The...Ch. 17 - Common-sized income statement Revenue and expense...Ch. 17 - Vertical analysis of balance sheet Balance sheet...Ch. 17 - Horizontal analysis of the income statement Income...Ch. 17 - Current position analysis The following data were...Ch. 17 - Current position analysis PepsiCo, Inc., the...Ch. 17 - Current position analysis The bond indenture for...Ch. 17 - Accounts receivable analysis The following data...Ch. 17 - Accounts receivable analysis Xavier Scores Company...Ch. 17 - Inventory analysis The following data were...Ch. 17 - Inventory analysis Dell Inc. and Hewlett-Packard...Ch. 17 - Ratio of liabilities to stockholders equity and...Ch. 17 - Ratio of liabilities to stockholders equity and...Ch. 17 - Ratio of liabilities to stockholders equity and...Ch. 17 - Ratio of sales to assets Three major segments of...Ch. 17 - Profitability ratios The following selected data...Ch. 17 - Profitability ratios Ralph Lauren Corporation...Ch. 17 - Six measures of solvency or profitability The...Ch. 17 - Six measures of solvency or profitability The...Ch. 17 - Earnings per share, price-earnings ratio, dividend...Ch. 17 - Price-earnings ratio; dividend yield The table...Ch. 17 - Earnings per share, discontinued operations The...Ch. 17 - Appendix Extraordinary item Assume that the amount...Ch. 17 - Income statement and earnings per share for...Ch. 17 - Unusual items Explain whether Colston Company...Ch. 17 - Horizontal analysis of income statement For 2016,...Ch. 17 - Vertical analysis of income statement For 2016,...Ch. 17 - Effect of transactions on current position...Ch. 17 - Nineteen measures of solvency and profitability...Ch. 17 - Solvency and profitability trend analysis Addai...Ch. 17 - Horizontal analysis of income statement For 2016,...Ch. 17 - Vertical analysis of income statement For 2016,...Ch. 17 - Effect of transactions on current position...Ch. 17 - Nineteen measures of solvency and profitability...Ch. 17 - Solvency and profitability trend analysis Crosby...Ch. 17 - Nike, Inc., Problem Financial Statement Analysis...Ch. 17 - Analysis of financing corporate growth Assume that...Ch. 17 - Receivables and inventory turnover Rodgers...Ch. 17 - Vertical analysis The condensed income statements...Ch. 17 - Profitability and stockholder ratios Deere Co....Ch. 17 - Comprehensive profitability and solvency analysis...

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