Question

Freedom Corporation reported beginning and ending total assets of $ 36 comma 000 and $ 32 comma 000​, respectively. Its net sales for the year were $ 32 comma 300. What was Freedom​'s asset turnover​ ratio? A. 0.95 B. 1.05 C. 0.90 D. 1.01

Answer 1

asset turnover​ ratio = 0.95

so correct option is A. 0.95

Step-by-step explanation:

given data

beginning total assets = $36000

ending total assets = $32000

net sales = $32300

to find out

Freedom​'s asset turnover​ ratio

solution

we find here Asset turnover ratio that is express as

asset turnover​ ratio = Net sales ÷ average assets ................1

here Average asset is

average asset =
`(beginning\ assets+ ending\ assets)/(2)`

average asset =
`(36000+32000)/(2)`

average asset = $34000

so put here value in equation 1

asset turnover​ ratio =
`(32300)/(34000)`

asset turnover​ ratio = 0.95

so correct option is A. 0.95