Question

Lake Company reported beginning and ending Total Assets of $25,000 and $35,000 respectively. The Net Sales for the year were $15,000. What is the asset turnover ratio

Answer 1

0.50

Step-by-step explanation:

Calculation for What is the asset turnover ratio

Using this formula

Asset turnover ratio=Net sales /Average total assets

Let plug in the formula

Asset turnover ratio=$15,000 / (($25,000 + $35,000)/2)

Asset turnover ratio=$15,000/($60,000/2)

Asset turnover ratio=$15,000/$30,000

Asset turnover ratio= 0.50

Therefore the asset turnover ratio will be 0.50