Use the information below to answer the following question(s):
The following data relates to the Miracle Corporation and its Toy Division.

-What is the Toy Division's asset turnover?
A) 3.3
B) 4.0
C) 4.2
D) 16.7

Question

Use the information below to answer the following question(s):
The following data relates to the Miracle Corporation and its Toy Division.
 
-What is the Toy Division's asset turnover?
A) 3.3 
B) 4.0 
C) 4.2 
D) 16.7

Quizplus · Accepted Answer

Asset turnover is calculated by dividing the net sales by the average total assets. 
For Miracle Corporation's Toy Division, 
Net Sales = $140 million 
Average Total Assets = ($80 million + $50 million) / 2 = $65 million 
Asset Turnover = 140/65 = 2.15 
Therefore, the Toy Division's asset turnover is 2.15, and the closest answer is B, 4.0.

Use the Information Below to Answer the Following Question(s)