During 2017 Stein Corporation reported net sales of $5000000 and net income of $2100000. Stein also reported beginning total assets of $1000000 and ending total assets of $1500000. Stein's asset turnover is
A) 5.0 times.
B) 4.0 times.
C) 3.3 times.
D) 1.7 times.

Question

Quizplus · Accepted Answer

Asset Turnover Ratio = Net Sales / Average Total Assets
Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2
Average Total Assets = ($1000000 + $1500000) / 2 = $1250000
Asset Turnover Ratio = $5000000 / $1250000 = 4.0 times. Therefore, the correct answer is B) 4.0 times.

During 2017 Stein Corporation Reported Net Sales of $5000000 and Net