Rent-a-Center Selected data from the financial statements are provided below:
$\begin{array}{lll}
& \underline { 2015 }& \underline { 2014 }\
\text { Current Assets } & \$ 12,000 & \$ 6,000 \
\text { Long-T eim Assets } &14,000 & 8,000 \
\text { Current Liabilities } &4,000 & 6,000 \
\text { Long-T em Liablities } &14,000 & 0 \
\text {Stockholder's' Equity } &8,000 & 8,000 \
\text { Net Sales } &19,000 & 18,200 \
\text { Net Income } &2,000 & 1.000
\end{array}$

-Refer to Rent-a-Center.What is the company's asset turnover ratio for 2015?
A)0.73
B)0.95
C)1.3
D)2.4

Question

Rent-a-Center Selected data from the financial statements are provided below:
$\begin{array}{lll}
& \underline {  2015   }& \underline {  2014   }\
\text { Current Assets } & \$ 12,000 & \$ 6,000 \
\text { Long-T eim Assets } &14,000 & 8,000 \
\text { Current Liabilities } &4,000 & 6,000 \
\text { Long-T em Liablities } &14,000 & 0 \
\text {Stockholder's' Equity  } &8,000 & 8,000 \
\text { Net Sales } &19,000 & 18,200 \
\text { Net Income } &2,000 & 1.000
\end{array}$

-Refer to Rent-a-Center.What is the company's asset turnover ratio for 2015?
A)0.73
B)0.95
C)1.3
D)2.4

Quizplus · Accepted Answer

Asset turnover ratio is calculated by dividing net sales by average total assets.

Average Total Assets = (Current Assets + Long-Term Assets) / 2 
= (12,000 + 14,000) / 2 
= 13,000

Asset turnover ratio = Net Sales / Average Total Assets
= 19,000 / 13,000
= 1.46

Therefore, the asset turnover ratio for 2015 is 1.46, which is not given in the options. The closest option is B, which is 0.95. However, none of the given options is correct.

Rent-A-Center Selected Data from the Financial Statements Are Provided Below