National Semiconductor Corporation, headquartered in Santa Clara, California, is a global semiconductor manufacturer. The company's 2009 fixed-asset turnover ratio, using the average book value of property, plant, and equipment (PP&E) as the denominator, was approximately 2.87. Additional information taken from the company's 2009 annual report is as follows:
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Equipment having a book value of $4 million was sold during 2009.
Required:
1. How is the fixed-asset turnover ratio computed? How would you interpret National's ratio of 2.87?
2. Use the data to determine National's net sales for 2009.
3. Obtain annual reports from three corporations in the same primary industry as National Semiconductor (Intel Corporation and Advanced Micro Devices are two well-known competitors) and compare the management of each company's investment in property, plant, and equipment.