Problem

Evaluating efficient use of assets Lok Co. reports net sales of $5,865,000 for 2010 and...

Evaluating efficient use of assets

Lok Co. reports net sales of $5,865,000 for 2010 and $8,689,000 for 2011. End-of-year balances for total assets are: 2009, $1,686,000; 2010, $1,800,000; and 2011, $1,982,000. (a) Compute Lok’s total asset turnover for 2010 and 2011. (b) Comment on Lok’s efficiency in using its assets if its competitors average a total asset turnover of 3.0.

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