Verizon Communications Inc. is a major telecommunications company in the United States.
Verizon's balance sheet disclosed the following information regarding fixed assets:
|
Dec. 31, 2004
(in millions)
|
Dec. 31,2003
(in millions)
|
|
Plant, property, and equipment
|
$185,522
|
$180,940
|
|
Less accumulated depreciation
|
111,398
|
105,638
|
|
|
$ 74,124
|
$ 75,302
|
Verizon's revenue for 2004 was $71,283 million. The fixed asset turnover for the telecommuni- cations industry averages 1.10.
a. Determine Verizon's fixed asset turnover ratio.
b. Interpret Verizon's fixed asset turnover ratio.