Question

eBook Show Me How Calculator Print Item Asset Turnover The Home Depot reported the following data (in millions) in its recent financial statements: Year 2 Year 1 Sales $120,800 $127,650 Total assets at the end of the year 72,800 78,200 Total assets at the beginning of the year 78,200 92,000 a. Determine the asset turnover for The Home Depot for Year 2 and Year 1. Round to one decimal place. Year 2 Year 1 Ab. What do these turnover indicate concerning the trend in the ability of The Home Depot to effectively use its assets to generate sa Check My Work Previous All work saved Email Instructor Save and Exit Submit Assignment for G O 8 N® T PA

Answer 1

a)	Average Assets = (beginning Assets + ending Assets)/2
			Year 2	Year 1
			= ( $78200+72800)/2	= ( $92000+78200)/2
			= $ 75500	= $ 85100
	Assets Turnover Ratio = Sales / average Assets
			Year 2	Year 1
			= $120800/75500	= $127650/85100
			=1.6 times	=1.5 times
b)	Increase in trend.
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