The following selected information is from Acme's annual report for the years ended December 31:

-Refer to the Acme annual report above.Calculate the asset turnover ratio for 2011.
A)1.1 times
B)0.375 times
C)1.4 times
D)The answer cannot be determined from the information given.

Question

The following selected information is from Acme's annual report for the years ended December 31:

-Refer to the Acme annual report above.Calculate the asset turnover ratio for 2011.
A)1.1 times 
B)0.375 times 
C)1.4 times 
D)The answer cannot be determined from the information given.

Quizplus · Accepted Answer

Asset turnover ratio = Net sales ÷ Average total assets
From the selected information, we can see that net sales for 2011 were $2,200 million and total assets at the end of 2011 were $1,571 million. We do not have information on the average total assets for the year, but we can assume that it is roughly equal to the total assets at the end of the year. Therefore, the asset turnover ratio for 2011 can be calculated as:
$2,200 million ÷ $1,571 million = 1.4 times
Therefore, the correct answer is C.

The Following Selected Information Is from Acme's Annual Report for the Years