Question

Suppose during 2017 that Federal Express reported the following information (in millions): net sales of $34,700 and net income of $94. Its balance sheet also showed total assets at the beginning of the year of $24,640 and total assets at the end of the year of $23,300. Calculate the asset turnover and return on assets. (Round answers to 2 decimal places, e.g. 6.25 or 17.54%.)

Answer 1

given,

Net sale = $34,700

Net income = $94

Total assets at the beginning = $24,640

Total asset at the end of the year = $23,300

Average asset =
`(\$24,640 + \$ 23,300)/(2)`

=
`\$ 23,970 }`

average turnover ratio =
`(net\ sale)/(average\ asset)`

=
`(\$ 34,700)/(\$ 23970)`

= 1.447

Return on asset =
`(net\ income)/(average\ asset)* 100`

=
`(\$ 94)/(\$ 23970)* 100`

= 0.39 %