Question

1. Calculate the Asset Turnover for Apple for the most recent year, then describe how you located the information and performed your calculation. 2. Calculate the Asset Turnover for Microsoft for the most recent year, then describe how you located the information and performed your calculation.

Answer 1

1. APPLE

Asset turnover Ratio = Net sales/ Average total assets

Asset turnover Ratio = 260,174/352,120.5

Asset turnover Ratio = 0.739

Working

For calculation of Net Sales we will take "Total Net Sales" twelve months ended on September 28, 2019 from the Condensed consolidated statement of operations. This revenue includes both from sale of goods and from providing services. So, Net sales will be = $260,174

Average total assets are computed by adding the Balance of total assets of 2018 and Balance of total assets of 2019 given in the balance sheet and then dividing them by 2.

Balance of total assets of 2018 = $365,725 millions

Balance of total assets of 2019 = $338,516 millions

Average of total assets = (365,725 + 338,516)/2 = $352,120.5

2. MICROSOFT

Asset turnover Ratio = Net sales/ Average total assets

Asset turnover Ratio = 125,843/272,702

Asset turnover Ratio = 0.461

Working

For calculation of Net Sales we will take "Total Revenue" from the Income Statement for the year 2019. This revenue includes both from sale of goods and from providing services. We would have reduced any refunds or sales returns from the revenue. But information regarding the same is not given. So, Net sales will be = $125,843

Average total assets are computed by adding the Balance of total assets of 2018 and Balance of total assets of 2019 given in the balance sheet and then dividing them by 2.

Balance of total assets of 2018 = $258,848 millions

Balance of total assets of 2019 = $286,556 millions

Average of total assets = (258,848 + 286,556)/2 = $272,702