Fireworks City
Information for 2020 and 2019 is presented below for this company which uses the straight-line depreciation method.
-Refer to Fireworks City. Determine the asset turnover ratio for 2020.
A)7.84 times
B)1.60 times
C)4.00 times
D)4.55 times

Question

Fireworks City
Information for 2020 and 2019 is presented below for this company which uses the straight-line depreciation method. 
-Refer to Fireworks City. Determine the asset turnover ratio for 2020.
A)7.84 times 
B)1.60 times 
C)4.00 times 
D)4.55 times

Quizplus · Accepted Answer

The asset turnover ratio is calculated by dividing net sales by average total assets. For 2020, net sales were $1,230,000 and average total assets were $157,000. Therefore, the asset turnover ratio is $1,230,000 / $157,000 = 7.84 times.

Fireworks City Information for 2020 and 2019 Is Presented Below for This