8. The XY Co. has sales of $198,000, net profit of $17,500, fixed assets of $125,400,...
8. The XY Co. has sales of $198,000, net profit of
$17,500, fixed assets of $125,400, and current assets of $44,300.
What is the total asset turnover rate?
Homework Answers
Answer to the question:
Total Asset Turnover ratio = Total Turnover or revenue/Average total assets
= 198000 / (125400+44300)/2
= 198000 / 84850
=2.33 times
Note: It is assumed that opening assets are zero, hence average assets = (0 + closing value)/2
IF we assume that opening assets are same as that of closing then
Total Asset Turnover ratio = Total Turnover or revenue/ Total assets
= 198000 / (125400+44300)
= 1.16676 times
Add Answer to:
8. The XY Co. has sales of $198,000, net profit of
$17,500, fixed assets of $125,400,...
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