Question

Andy & Co. has sales of $291,200, cost of goods sold of $163,300, net profit of $11,360, net fixed assets of $154,500, and current assets of $89,500. What is the total asset turnover rate?

a. 0.66
b. 1.88
c. 0.83
d. 2.10

Answer 1

The total asset turnover rate for Andy & Co. is calculated by dividing annual sales by total assets, which totals to 1.19. This result is not reflected in the provided multiple choice answers, indicating a possible discrepancy in the question.

Step-by-step explanation:

To calculate the total asset turnover rate, we need to divide the company's annual sales by its total assets. Total assets are the sum of net fixed assets and current assets. In this case, Andy & Co. has net fixed assets of $154,500 and current assets of $89,500, summing up to a total of $244,000. With sales of $291,200, the total asset turnover rate is calculated as follows:

Total Asset Turnover Rate = Sales ÷ Total Assets = $291,200 ÷ $244,000 = 1.19.

The answer is not listed among the given choices, suggesting a potential error in the question or the choices provided. However, the correct calculation of the total asset turnover rate is as shown above, making best use of the provided financial data.