Corporate Financial Accounting
15th Edition
ISBN: 9781337398169
Author: Carl Warren, Jeff Jones
Publisher: Cengage Learning
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Textbook Question
Chapter 9, Problem 9.4MAD
Compare FedEx 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:
| FedEx | UPS | |
| Sales (in millions) | $50365 |
$60,906 |
| Average book value of fixed assets (in millions) | 22,580 | 18,576 |
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.
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Students have asked these 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 facili-
ties, 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
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?
Interpret the meaning of the ratio for the more efficient company.
C.
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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:
FedEx
$83,959 $97,287
34,680 32,865
UPS
Sales (in millions)
Average book value of fixed assets (in millions)
a. Compute the fixed asset turnover ratio for each company. Round to one decimal place.
FedEx:
UPS:
b. Which company appears more efficient in using fixed assets?
c. Interpret the meaning of the fixed asset turnover ratio.
Comcast, Google, and Walmart: Fixed asset turnover ratio
The following table shows the sales and average book value of fixed assets for three different companies from three different industries for a recent year:
Average Book
Sales (in Value of Fixed Assets
Company (Industry)
millions) (in millions)
Comcast Corporation (communications)
$64,657
$28,536
Google Inc. (Internet)
59,825
14,189
Walmart Stores, Inc. (retail)
474,259
117,294
a. For each company, determine the fixed asset turnover ratio. (Round to one decimal place.)
Comcast:
Google:
Walmart:
b. Which of these statements are correct?
Chapter 9 Solutions
Corporate Financial Accounting
Ch. 9 - ONeil Office Supplies has a fleet of automobiles...Ch. 9 - Prob. 2DQCh. 9 - Prob. 3DQCh. 9 - Distinguish between the accounting for capital...Ch. 9 - Immediately after a used truck is acquired, a new...Ch. 9 - Keyser Company purchased a machine that has a...Ch. 9 - Is it necessary for a business to use the same...Ch. 9 - A. Under what conditions is the use of an...Ch. 9 - For some of the fixed assets of a business, the...Ch. 9 - Prob. 10DQ
Ch. 9 - Straight-line depreciation A building acquired at...Ch. 9 - Units-of-activity depreciation A truck acquired at...Ch. 9 - Double-declining-balance depreciation A building...Ch. 9 - Revision of depreciation Equipment with a cost of...Ch. 9 - Capital and revenue expenditures On February 14,...Ch. 9 - Sale of equipment Equipment was acquired at the...Ch. 9 - Prob. 9.7BECh. 9 - Prob. 9.8BECh. 9 - Fixed asset turnover ratio Select financial...Ch. 9 - Costs of acquiring fixed assets Melinda Staffers...Ch. 9 - Prob. 9.2EXCh. 9 - Prob. 9.3EXCh. 9 - Nature of depreciation Tri-City Ironworks Co....Ch. 9 - Straight-line depreciation rates Convert each of...Ch. 9 - Straight-line depreciation A refrigerator used by...Ch. 9 - Depreciation by units-of-activity method A...Ch. 9 - Depreciation by units-of-activity method Prior to...Ch. 9 - Depreciation by two methods A Kubota tractor...Ch. 9 - Depreciation by two methods A storage tank...Ch. 9 - Partial-year depreciation Equipment acquired at a...Ch. 9 - Revision of depreciation A building with a exist...Ch. 9 - Capital and revenue expenditures Warner Freight...Ch. 9 - Prob. 9.14EXCh. 9 - Capital and revenue expenditures Quality Move...Ch. 9 - Capital expenditure and depreciation Willow Creek...Ch. 9 - Entries for sale of fixed asset Equipment acquired...Ch. 9 - Disposal of fixed asset Equipment acquired on...Ch. 9 - Prob. 9.19EXCh. 9 - Amortization entries Kleen Company acquired patent...Ch. 9 - Prob. 9.21EXCh. 9 - Balance sheet presentation List the errors you...Ch. 9 - Asset traded for similar asset A printing press...Ch. 9 - Prob. 9.24EXCh. 9 - Entries for trade of fixed asset On July 1, Twin...Ch. 9 - Entries for trade of fixed asset On October 1,...Ch. 9 - Prob. 9.1APRCh. 9 - Comparing three depreciation methods Dexter...Ch. 9 - Depreciation by three methods; partial years...Ch. 9 - Depreciation by two methods; sale of fixed asset...Ch. 9 - Transactions for fixed assets, including sale The...Ch. 9 - Amortization and depletion entries Data related to...Ch. 9 - Allocating payments and receipts to fixed asset...Ch. 9 - Comparing three depreciation methods Waylander...Ch. 9 - Depreciation by three methods; partial years...Ch. 9 - Depreciation by two methods; sale of fixed asset...Ch. 9 - Transactions for fixed assets, including sale The...Ch. 9 - Amortization and depletion entries Data related to...Ch. 9 - Compare Amazon.com to Netflix Amazon.com, Inc....Ch. 9 - Prob. 9.2MADCh. 9 - Analyze Verizon Verizon Communications Inc. (VZ)...Ch. 9 - Compare FedEx and UPS FedEx Corporation (FDX) and...Ch. 9 - Prob. 9.5MADCh. 9 - Prob. 9.1TIFCh. 9 - Communication Godwin Co. owns three delivery...Ch. 9 - Prob. 9.4TIF
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