Miller Medical Services provided the following information for its last year's operations in the Hospital Bed Division. What is the Hospital Bed Division's asset turnover?
A) 0.00
B) 0.53
C) 0.92
D) 1.33
E) 2.50

Question

Miller Medical Services provided the following information for its last year's operations in the Hospital Bed Division.  What is the Hospital Bed Division's asset turnover?
A) 0.00 
B) 0.53 
C) 0.92 
D) 1.33 
E) 2.50

Quizplus · Accepted Answer

Asset turnover ratio = net sales ÷ average total assets
Using the information provided:
Net Sales = $5,900,000
Average Total Assets = ($16,500,000 + $13,500,000) ÷ 2 = $15,000,000

Asset turnover = $5,900,000 ÷ $15,000,000 = 0.3933
Therefore, the answer is closest to 1.33, choice letter D.

Miller Medical Services Provided the Following Information for Its Last