Question

Assume the Residential Division of KappyKappy Faucets had the following results last​ year: Net sales revenue $16,320,000 Operating income 6,528,000 Average total assets 5,100,000 Management's target rate of return 16% What is the​ division's asset turnover​ ratio?

Answer 1

3.20

Step-by-step explanation:

The computation of the asset turnover ratio is shown below:

Total asset turnover = (Net Sales revenue ÷ Average Total assets)

= ($16,320,000 ÷ $5,100,000)

= 3.20

It shows a ratio between the net sales revenue and the average total assets.

All other information which is given is not relevant. Hence, ignored it