Three major segments of the transportation industry are motor carriers, such as

Question

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

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.

Atlantic Pacific Mediterranean Sales $2,432,100 $3,280,576 $1,775,160 Average total assets 810,700 1,261,760 493,100

Explanation / Answer

a. Sales to assets ration = Net Sales / Average Total Asstes

Atlantic = 2,432,100 / 810,700 = 3 Pacific = 3,280,576 / 1,261,760 = 2.6 Mediterranean = 1,775,160 / 493,100 = 3.6

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