Final answer:
The correct formula for calculating asset turnover is b. Sales divided by Average Total Assets, where Average Total Assets is the sum of the beginning and end of year total assets divided by two.
Step-by-step explanation:
The formula to calculate the asset turnover is b. Sales ÷ Average Total Assets.
Asset turnover is a financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue.
The average total assets are typically calculated by taking the sum of the assets at the beginning of the year and at the end of the year and dividing by two.
It's important to use the average for the period because asset levels can fluctuate throughout the year.
The formula is thus: Asset Turnover = Total Sales / ((Total Assets at the Beginning of the Year + Total Assets at the End of the Year) ÷ 2).