Question

During 2020, Whispering Winds Corp. reported net sales of $4,502,400 and net income of $1,510,000. Its balance sheet reported average total assets of $1,680,000. Calculate the asset turnover. (Round answer to 2 decimal places, e.g. 1.25.)

Answer 1

2.68

Step-by-step explanation:

Data provided in the question:

Reported net sales = $4,502,400

Reported net income = $1,510,000

Reported average total assets = $1,680,000

Now,

The the asset turnover is calculated using the formula as

Asset turnover = ( Net sales ) ÷ ( Average total assets )

or

Asset turnover = $4,502,400 ÷ $1,680,000

or

Asset turnover = 2.68 times