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Computing Asset Ratios The following information relates to Nicke Inc. Total Fixed Total Net $ millions Assets Assets Revenue

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Answer #1

(a)

Total assets turnover = revenue/average total assets

therefore,

For 2016:

Total asset turnover = $29138/{($19256 + $21381)/2}

= $29138/$20,318.5 = 1.43 times

For 2015:

Total asset turnover = $27541/{($21381 + $16735)/2}

= $27541/$19,058 = 1.45 times

(b)

Return on assets = net income/average total assets

For 2016:

Return on assets = $3384/{($19256 + $21381)/2}

= $3384/$20,318.5 = 16.65%

For 2015:

Return on assets = $2946/{($21381 + $16735)/2}

= $2946/$19,058 = 15.46%

(c)

fixed asset turnover = revenue/average fixed assets

For 2016:

fixed asset turnover = $29138/{($3168 + $2981)/2}

= $29138/$3074.5 = 9.48 times

For 2015:

fixed asset turnover = $27541/{($2981 + $2551)/2}

= $27541/$2766 = 9.96 times

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