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):

	Atlantic		Pacific		Mediterranean
Sales	$2,982,880		$6,247,500		$1,010,624
Average total assets	932,150		1,275,000		631,640

a. Determine the asset turnover for all three companies. Round to one decimal place.

Atlantic
Pacific
Mediterranean

Answer 1

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