Question

Bountiful Company had sales of $650,000 and cost of merchandise sold of $200,000 during the year. The total assets balance at the beginning of the year was $175,000 and at the end of the year was $167,000. Calculate the ratio of sales to total assets.

Answer 1

Ratio = 3.801

Explanation:

Given that the total assets balance at the beginning of the year was $175,000 and at the end of the year was $167,000.

Average assets for the year =
`(175000+167000)/(2) =171000`

Sales for the year = 650000 dollars

To calculate the ratio of sales to total assets:

Required ratio =
`(650000)/(171000) =3.801`