Asked by Rileigh Campbell on Jul 27, 2024
Verified
Bradford Company had sales of $700,000 for a year. The total assets at the beginning of the year were $240,000, and the total assets at the end of the year were $280,000. The asset turnover ratio is (round answer to 2 decimal places)
A) 2.69
B) 0.40
C) 2.92
D) 0.34
Asset Turnover Ratio
A financial metric that measures the efficiency of a company in using its assets to generate sales or revenue.
Total Assets
The sum of all resources owned by an entity, including cash, investments, property, and equipment, that are recognized in the balance sheet.
- Calculate and interpret asset turnover ratio.
Verified Answer
GG
Gerardo GonzalezJul 31, 2024
Final Answer :
A
Explanation :
Average total assets = (Beginning total assets + Ending total assets) / 2 = ($240,000 + $280,000) / 2 = $260,000
Asset turnover ratio = Sales / Average total assets = $700,000 / $260,000 = 2.69?
Average total assets = (Beginning total assets + Ending total assets) / 2 = ($240,000 + $280,000) / 2 = $260,000
Asset turnover ratio = Sales / Average total assets = $700,000 / $260,000 = 2.69?
Learning Objectives
- Calculate and interpret asset turnover ratio.