Selected current year company information follows: Net income$~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~\$$15,953
Net sales$~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~$712,855
Total liabilities, begirning-year$~~~~~~~~~~~~~~~~~~~~~~$83,932
Total liabilities, end-of-year$~~~~~~~~~~~~~~~~~~~~~~~~~~$103,20
Total stockholders' equity, begirnirg-year$~~~~~~~~~$198,935
Total stockholders' equity, end-of-year$~~~~~~~~~~~~~$121,85

The total asset turnover is:
A)2.24 times
B)2.81 times
C)3.64 times
D)4.67 times
E)6.28 times

Question

Selected current year company information follows: Net income$~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~\$$15,953
Net sales$~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~$712,855
Total liabilities, begirning-year$~~~~~~~~~~~~~~~~~~~~~~$83,932
Total liabilities, end-of-year$~~~~~~~~~~~~~~~~~~~~~~~~~~$103,20
Total stockholders' equity, begirnirg-year$~~~~~~~~~$198,935
Total stockholders' equity, end-of-year$~~~~~~~~~~~~~$121,85

The total asset turnover is:
A)2.24 times
B)2.81 times
C)3.64 times
D)4.67 times
E)6.28 times

Quizplus · Accepted Answer

The total asset turnover ratio is calculated as Net Sales / Average Total Assets. First, we need to correct the apparent typos in the data for total liabilities and total stockholders' equity at the end of the year to make sense of the numbers. Assuming "103,20" and "121,85" are missing a digit and should likely be "103,200" and "121,850" respectively. Total assets at the beginning of the year = Total liabilities + Total stockholders' equity = 83,932 + 198,935 = 282,867. Total assets at the end of the year = 103,200 + 121,850 = 225,050. Average total assets = (282,867 + 225,050) / 2 = 253,958.5. Total asset turnover = 712,855 / 253,958.5 ≈ 2.81 times.

Selected Current Year Company Information Follows: Net Income $~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~\$ $ 15,953 Net Sales

Selected Current Year Company Information Follows: Net Income $~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~\$$ 15,953
Net Sales