Question

The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $) Assets 2019 Cash and securities $4,200 Accounts receivable 17,500 Inventories 20,300 Total current assets $42,000 Net plant and equipment $28,000 Total assets $70,000 Liabilities and Equity Accounts payable $27,531 Accruals 12,369 Notes payable 5,000 Total current liabilities $44,900 Long-term bonds $9,000 Total liabilities $53,900 Common stock $3,864 Retained earnings 12,236 Total common equity $16,100 Total liabilities and equity $70,000 Income Statement (Millions of $) 2019 Net sales $112,000 Operating costs except depreciation 104,160 Depreciation 2,240 Earnings before interest and taxes (EBIT) $5,600 Less interest 840 Earnings before taxes (EBT) $4,760 Taxes 1,190 Net income $3,570 Other data: Shares outstanding (millions) 500.00 Common dividends (millions of $) $1249.50 Int rate on notes payable & L-T bonds 6% Federal plus state income tax rate 25% Year-end stock price $68.54

What is the firm's total assets turnover? Do not round your intermediate calculations.

Answer 1

1.6

Step-by-step explanation:

The computation of the assets turnover is shown below:

Total asset turnover = (Net Sales ÷ total assets)

= ($112,000 ÷ $70,000)

= 1.6

It shows a relationship between net sales and the total assets.

Simply we divide the net sales by the total assets so that the total asset turnover can be computed

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