Asked by Mikaela Forcum on Jun 03, 2024
Verified
Kragle Corporation reported the following financial data for one of its divisions for the year; average invested assets of $470,000; sales of $930,000; and income of $105,000.The investment turnover is:
A) 22.3.
B) 50.5.
C) 1.98.
D) 447.6.
E) 11.3.
Investment Turnover
A measure of a company's efficiency in using its assets to generate sales or revenue; the ratio of net sales to average assets.
Invested Assets
Assets acquired or invested in to generate revenue, growth, and profit for the business.
Financial Data
Quantitative information concerning the financial health, performance, and condition of a business or individual.
- Gain an understanding of the fundamental performance metrics for investment centers, such as profit margin, investment turnover, and return on investment.
Verified Answer
ML
Micaela LopezJun 05, 2024
Final Answer :
C
Explanation :
Investment turnover is calculated by dividing sales by average invested assets. Therefore, investment turnover for this division would be $930,000 / $470,000 = 1.98.
Learning Objectives
- Gain an understanding of the fundamental performance metrics for investment centers, such as profit margin, investment turnover, and return on investment.
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