Question

The blue samurai Japanese restaurant, has an asset turnover of 3.5. the total assets were 95000. what are the net sales

Answer 1

Asset turn over ratio is the value of a company’s sales generated as compared to the value of its assets. In the case of blue samurai restaurant, asset turn over is 3.5 while the total asset is 95000.

Asset turn over ratio of 3.5 means that for every 1 unit of asset, the company generates 3.5 units.

Asset turn over ratio is calculated by dividing net sales by average total assets. Net sales is computed as:

3.5=Net sales/95000

Net Sales=3.5(95000)

Net Sales = 332500

Answer 2

We arrive at the answer as follows:

The asset turnover ratio measures a company's ability to use its assets and generate sales. The formula for asset turnover is:

`Asset Turnover Ratio = (Net Sales)/(Total Assets)`

From the question we have,

Asset Turnover = 3.5 years

Total assets = 95000.

Substituting these values in the formula above we get,

`3.5 = (Net Sales)/(95000)`

`Net Sales = 3.5 * 95000`

`Net Sales = 332500`