Corporate Financial Accounting
15th Edition
ISBN: 9781337398169
Author: Carl Warren, Jeff Jones
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 5.4MAD
a.
To determine
To Calculate: The asset turnover ratio for Corporation C, Corporation U and Incorporation Y.
b.
To determine
To identify: The Company that generates revenue from its assets more efficiently.
c.
To determine
To compare: Incorporation Y’s assets turnover ratio with Corporation C and Corporation U’s assets turnover ratio.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
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
$5,092,000
$22,832,000
$16,631,172
Average total assets
1,601,300
58,476,500
4,331,623
a. Determine the asset turnover for all three companies. Round your answers to one decimal place.
YRC
fill in the blank 1
Union Pacific
fill in the blank 2
C.H. Robinson
fill in the blank 3
b. The ratio of sales to assets measures the number of sales dollars earned for each dollar of assets. The greater the number of sales dollars earned for every dollar of assets, the
efficient a firm is in using assets.
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
Three major segments of the transportation industry are motor carriers, such as Atlantic; railroads, such as Pacific; and transportation arrangement services, such as Mediterranean. Recent financial statement information for these three companies is shown as follows (in thousands of dollars):
Atlantic
Pacific
Mediterranean
Sales
$3,736,923
$4,993,352
$1,909,372
Average total assets
795,090
1,314,040
561,580
a. Determine the asset turnover for all three companies. Round to one decimal place.
Atlantic
fill in the blank 1
Pacific
fill in the blank 2
Mediterranean
fill in the blank 3
b. The ratio of sales to assets measures the number of sales dollars earned for each dollar of assets. The greater the number of sales dollars earned for every dollar of assets, the efficient a firm is in using assets.
Chapter 5 Solutions
Corporate Financial Accounting
Ch. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - The credit period during which the buyer of...Ch. 5 - What is the meaning of (A) 1/15, n/60; (B) n/30;...Ch. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Who is responsible for freight when the terms of...Ch. 5 - Name three accounts that would normally appear in...Ch. 5 - Audio Outfitter Inc., which uses a perpetual...Ch. 5 - Assume that Audio Outfitter Inc. in Discussion...
Ch. 5 - Gross profit During the current year, merchandise...Ch. 5 - Purchases transactions Elkhorn Company purchased...Ch. 5 - Prob. 5.3BECh. 5 - Prob. 5.4BECh. 5 - Transactions for buyer and seller Shore Co. sold...Ch. 5 - Adjusting entries Halm Flooring Company uses a...Ch. 5 - Asset turnover ratio Financial statement data for...Ch. 5 - Determining gross profit During the current year,...Ch. 5 - Determining cost of goods sold For a recent year,...Ch. 5 - Chart of accounts Monet Paints Co. is a newly...Ch. 5 - Purchase-related transactions The Stationery...Ch. 5 - Purchase-related transactions A retailer is...Ch. 5 - Purchase-related transactions The debits and...Ch. 5 - Purchase-related transactions Stylon Co., a...Ch. 5 - Prob. 5.8EXCh. 5 - Sales-related transactions, including the use of...Ch. 5 - Customer refund Senger Company sold merchandise of...Ch. 5 - Customer return and refund On December 28, 20Y3,...Ch. 5 - Sales-related transactions After the amount due on...Ch. 5 - Sales-related transactions The debits and credits...Ch. 5 - Prob. 5.14EXCh. 5 - Determining amounts to be paid on invoices...Ch. 5 - Prob. 5.16EXCh. 5 - Purchase-related transactions Based on the data...Ch. 5 - Prob. 5.18EXCh. 5 - Prob. 5.19EXCh. 5 - Normal balances of merchandise accounts What is...Ch. 5 - Income statement and accounts for merchandiser For...Ch. 5 - Adjusting entry for inventory shrinkage Omega Tire...Ch. 5 - Adjusting entry for customer refunds, allowances,...Ch. 5 - Adjusting entry for customer refunds, allowances,...Ch. 5 - Income statement for merchandiser The following...Ch. 5 - Determining amounts for items omitted from income...Ch. 5 - Multiple-step income statement On March 31, 20Y9,...Ch. 5 - Multiple-step income statement The following...Ch. 5 - Single-step income statement Summary operating...Ch. 5 - Closing the accounts of a merchandiser From the...Ch. 5 - Closing entries; net income Based on the data...Ch. 5 - Closing entries On July 31, the close of the...Ch. 5 - Prob. 5.33EXCh. 5 - Prob. 5.34EXCh. 5 - Prob. 5.35EXCh. 5 - Discount taken in next fiscal year Using the data...Ch. 5 - Prob. 5.37EXCh. 5 - Rules of debit and credit for periodic inventory...Ch. 5 - Journal entries using the periodic inventory...Ch. 5 - Identify items missing in determining cost of...Ch. 5 - Appendix Cost of goods sold and related items The...Ch. 5 - Cost of goods sold Based on the following data,...Ch. 5 - Cost of goods sold Based on the following data,...Ch. 5 - Appendix 2 Cost of goods sold Identify the errors...Ch. 5 - Closing entries using periodic inventory system...Ch. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple-step income statement and balance sheet...Ch. 5 - Single-step income statement and balance sheet...Ch. 5 - Purchase-related transactions using periodic...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Prob. 5.9APRCh. 5 - Periodic inventory accounts, multiple-step income...Ch. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple-step income statement and balance sheet...Ch. 5 - Single-step income statement and balance sheet...Ch. 5 - Prob. 5.7BPRCh. 5 - Prob. 5.8BPRCh. 5 - Prob. 5.9BPRCh. 5 - Periodic inventory accounts, multiple-step income...Ch. 5 - Comprehensive Problem 2 8. Net income: 741,455...Ch. 5 - Analyze and compare Amazon.com and Netflix...Ch. 5 - Analyze Dollar General Dollar General Corporation...Ch. 5 - Compare Dollar Tree and Dollar General The asset...Ch. 5 - Prob. 5.4MADCh. 5 - Analyze Home Depot The Home Depot (HD) reported...Ch. 5 - Prob. 5.6MADCh. 5 - Analyze J. C. Penney J. C. Penney Company, Inc....Ch. 5 - Prob. 5.1TIFCh. 5 - Prob. 5.2TIFCh. 5 - Prob. 5.5TIFCh. 5 - Prob. 5.6TIFCh. 5 - Prob. 5.7TIF
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 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: 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.arrow_forwardCompare Fed Ex and UPS FedEx Corporation (FDX) and United Parcel Service, Inc. (UPS) 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: 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.arrow_forwardAmazon.com, Inc. is the worlds leading Internet retailer of merchandise and media. Amazon also designs and sells electronic products, such as e-readers. Netflix, Inc. is the worlds leading Internet television network. Both companies compete in the digital media and streaming space. However, Netflix is more narrowly focused in the digital streaming business than is Amazon. Sales and average book value of fixed assets information (in millions) are provided for Amazon and Netflix for a recent year as follows: a. Compute the fixed asset turnover ratio for each company. Round to one decimal place. b. Which company is more efficient in generating sales from fixed assets? c. Interpret your results.arrow_forward
- Three major segments of the transportation industry are motor carriers such as Atlantic Worldwide, railroads such as Pacific, and transportation logistics services such as Mediterranean. Recent financial statement information for these three companies follows (in thousands): Atlantic Pacific Mediterranean Sales $1,602,930 $892,080 $2,142,260 Average total assets 763,300 1,274,400 498,200 a. Determine the asset turnover for all three companies. Round your answers to two decimal places. Atlantic fill in the blank 1 Pacific fill in the blank 2 Mediterranean fill in the blank 3arrow_forwardThree major transportation segments and a major company within each segment are as follows: Segment Company Motor carriers YRC Worldwide Inc. (YRCW) Railroads Union Pacific Corporation (UNP) Transportation Arrangement C.H. Robinson Worldwide Inc. (CHRW) YRC Worldwide Union Pacific C.H. RobinsonWorldwide Sales $4,832 $21,813 $13,470 Average long-term operating assets 1,016 47,569 1,092 a. Determine the asset turnover for all three companies. Round to two decimal places. YRC Worldwide ???? Union Pacific ???? C.H. Robinson Worldwide ????arrow_forwardAsset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio. Consider the following case: Walker Telecommunications has a quick ratio of 2.00x, $35,550 in cash, $19,750 in accounts receivable, some inventory, total current assets of $79,000, and total current liabilities of $27,650. The company reported annual sales of $200,000 in the most recent annual report. Over the past year, how often did Walker Telecommunications sell and replace its inventory? A---8.01x B---2.86x C---9.28x D---8.44x The inventory turnover ratio across companies in the telecommunications industry is 9.284x. Based on this…arrow_forward
- Asset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio. Consider the following case: Walker Telecommunications has a quick ratio of 2.00x, $35,550 in cash, $19,750 in accounts receivable, some inventory, total current assets of $79,000, and total current liabilities of $27,650. The company reported annual sales of $200,000 in the most recent annual report. Additionally, the company’s cost of goods sold is 75% of sales. Over the past year, how often did Walker Telecommunications sell and replace its inventory? 8.01x 2.86x 6.33x 6.96x The inventory turnover…arrow_forwardAsset management ratios are used to measure how effectively a firm manages its assets, by relating the amount a firm has invested in a particular type of asset (or group of assets) to the amount of revenues the asset is generating. Examples of asset management ratios include the average collection period (also called the days sales outstanding ratio), the inventory turnover ratio, the fixed asset turnover ratio, and the total asset turnover ratio. Consider the following case: Walker Telecommunications has a quick ratio of 2.00x, $35,550 in cash, $19,750 in accounts receivable, some inventory, total current assets of $79,000, and total current liabilities of $27,650. The company reported annual sales of $200,000 in the most recent annual report. Over the past year, how often did Walker Telecommunications sell and replace its inventory? 8.01x 8.44x 9.28x 2.86x The inventory turnover ratio across companies in the telecommunications industry is…arrow_forwardAlyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below: Sales $ 18,900,000 Net operating income $ 4,400,000 Average operating assets $ 35,500,000 Required: 1. Compute the margin for Alyeska Services Company. (Round your answer to 2 decimal places.) 2. Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.) 3. Compute the return on investment (ROI) for Alyeska Services Company. (Round your intermediate calculations and final answer to 2 decimal places.)arrow_forward
- Alyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below: Sales $ 17,400,000 Net operating income $ 5,500,000 Average operating assets $ 35,400,000 Required: 1. Compute the margin for Alyeska Services Company. (Round your answer to 2 decimal places.) 2. Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.) 3. Compute the return on investment (ROI) for Alyeska Services Company. (Round your intermediate calculations and final answer to 2 decimal places.) 1. Margin % 2. Turnover 3. ROI %arrow_forwardAlyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below: Sales $ 17,200,000 Net operating income $ 5,600,000 Average operating assets $ 36,300,000 Required: 1. Compute the margin for Alyeska Services Company. (Round your answer to 2 decimal places.) 2. Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.) 3. Compute the return on investment (ROI) for Alyeska Services Company. (Round your intermediate calculations and final answer to 2 decimal places.) 1. Margin not attempted % 2. Turnover not attempted 3. ROI not attempted %arrow_forwardAlyeska Services Company, a division of a major oil company, provides various services to the operators of the North Slope oil field in Alaska. Data concerning the most recent year appear below: Sales $ 17,100,000 Net operating income $ 6,100,000 Average operating assets $ 35,000,000 Required: 1. Compute the margin for Alyeska Services Company. (Round your answer to 2 decimal places.) 2. Compute the turnover for Alyeska Services Company. (Round your answer to 2 decimal places.) 3. Compute the return on investment (ROI) for Alyeska Services Company. (Round your intermediate calculations and final answer to 2 decimal places.) 1- Margin % 2- Turover 3- ROI %arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningManagerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
How To Analyze an Income Statement; Author: Daniel Pronk;https://www.youtube.com/watch?v=uVHGgSXtQmE;License: Standard Youtube License