Mehring Company reported net sales of $540000 net income of $72000 beginning total assets of $240000 and ending total assets of $360000. What was the company's asset turnover?
A) 2.3 times
B) 0.6 times
C) 1.8 times
D) 1.5 times

Question

Quizplus · Accepted Answer

Asset Turnover = Net Sales / Average Total Assets

Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2
Average Total Assets = ($240,000 + $360,000) / 2 = $300,000

Asset Turnover = $540,000 / $300,000 = 1.8 times

Mehring Company Reported Net Sales of $540000 Net Income of $72000