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katrin [286]
3 years ago
9

FedEx Corporation and United Parcel Service, Inc. compete in the package delivery business. The major fixed assets for each busi

ness 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 UPS Sales (in millions) $47,453 $58,363
Average book value of fixed assets (in millions) 20,213 18,317
Required:
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?
Business
1 answer:
borishaifa [10]3 years ago
5 0

Answer:

a. FedEx = 2.3 , UPS = 3.2

b. UPS appears to be more efficient in using fixed assets as it is able to generate a sales of $3.20 for every $1 invested in assets as against a sale of $2.30 for every $1 invested in asset generated by FedEx

Explanation:

Asset turnover is the ratio of revenue to average assets of a company. It is a financial indicator that shows how much revenue a company generates in an accounting period for each  $1 invested in assets (fixed asset in this case).

Mathematically,

Fixed asset turnover = sales/average fixed asset

The fixed asset turnover ratio for;

FedEx = $47,453/$20,213

= 2.3

UPS = $58,363/$18,317

= 3.2

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Alex

Answer:

True

Explanation:

This is an income statement. Ex: Rent expenses, salaries expense, total revenues, etc.

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3 years ago
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Stop and Go has a 4.5 percent profit margin and a 15 percent dividend payout ratio. The total asset turnover is 1.6 and the debt
AVprozaik [17]

Answer:

10.85 percent

Explanation:

Return on equity = 0.045 × 1.60 ×(1 + 0.60) = 0.1152

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The sustainable growth rate is the rate of growth that a company can expect to see in the long term. Often referred to as G, the sustainable growth rate can be calculated by multiplying a company’s earnings retention rate by its return on equity. The growth rate can be calculated on a historical basis and averaged in order to determine the company’s average growth rate since its inception.

The sustainable growth rate is an indicator of what stage a company is in, during its life cycle. Understanding where a company is in its life cycle is important.

3 0
3 years ago
Bear Publishing sells a nature guide. The following information was reported for a typical month: Total Per Unit Sales $ 17,600
avanturin [10]

Answer:

Instructions are below.

Explanation:

Giving the following information:

Sales= $17,600 ($16.00 selling price per unit)

Contribution margin 7,920

Fixed expenses 3,600

First, we need to calculate the unitary contribution margin:

Units sold= 17,600/16= 1,100 units

Unitary contribution margin= 7,920/1,100= $7.2

Now, using the following formulas, we can calculate the break-even point in units and dollars:

Break-even point in units= fixed costs/ contribution margin per unit

Break-even point in units= 3,600/7.2= 500 units

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 3,600/ (7.2/16)

Break-even point (dollars)=$8,000

7 0
3 years ago
There are not enough goods and services to meet the wants of the population
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Answer:

Explanation:

The fact that limited amounts of goods and services are available to meet unlimited wants is called scarcity. ... Scarcity always exists. There simply are not enough goods and services to supply all of society's needs and wants.

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2 years ago
On June 10, Concord Corporation purchased $8,050 of merchandise on account from Sarasota Company, FOB shipping point, terms 1/10
mariarad [96]

Explanation:

The journal entries are as follows in the books of Concord Corporation

On June 10

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              To Account payable A/c $8,050

(Being the inventory is purchased on account)                

On June 11

Merchandise inventory A/c Dr $510

             To Cash A/c $510

(Being freight is paid by cash)

On June 12

Accounts payable A/c Dr $450

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(Being goods returned is recorded)

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(Being payment is recorded)

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3 years ago
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