Question

Ally's Company reported the following data: 2018 2019 Sales $3,000,000 $4,800,000 Net Income $300,000 $400,000 Assets...

Ally's Company reported the following data:

2018 2019
Sales $3,000,000 $4,800,000
Net Income $300,000 $400,000
Assets at year end $1,800,000 $2,500,000
Liabilities at year end $1,200,000 $1,700,000

What is Ally’s asset turnover for 2019?

1.97

1.92

2.23

2.67

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Answer #1

answer: 2.23

Explanation:-

Asset Turnover ratio = Net sales/Average total assets

= 4800000/{(1800000+2500000)/2}

= 4800000/{4300000/2}

= 4800000/2150000

= 2.23

Therefore, Ally’s asset turnover for 2019 = 2.23

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