Asset turnover Three major segments of the transportation industry are motor car
ID: 2400661 • Letter: A
Question
Asset turnover
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):
a. Determine the asset turnover for all three companies. Round to one decimal place.
Atlantic Pacific Mediterranean Sales $2,982,880 $6,247,500 $1,010,624 Average total assets 932,150 1,275,000 631,640Explanation / Answer
a. Atlantic 3.2 Pacific 4.9 Mediterranean 1.6 Working: Assets Turnover = Sales / Average total assets Assets Turnover: Atlantic = $ 2,982,880 / $ 932,150 = 3.2 Pacific = $ 6,247,500 / $ 1,275,000 = 4.9 Mediterranean = $ 1,010,624 / $ 631,640 = 1.6