Final answer:
The investment turnover for Matlock Industries is approximately 0.44. Matlock's investment turnover is calculated by dividing the sales revenue by average invested assets, resulting in 1.24, which is option c. The correct answer is C.
Step-by-step explanation:
To calculate the investment turnover, we need to divide the net operating income by the average invested assets. In this case, the net operating income is $196,000 and the average invested assets are $450,000. Dividing $196,000 by $450,000 gives us a result of 0.435556. Rounding to two decimal places, the investment turnover is approximately 0.44.
Matlock's investment turnover is calculated by dividing the sales revenue by average invested assets, resulting in 1.24, which is option c.
To find Matlock's investment turnover, you would divide the sales revenue by the average invested assets. Using the figures provided in the question, the calculation would be $560,000 divided by $450,000, which equals 1.24. Therefore, among the multiple choice options given, the correct answer is c. 1.24.
To calculate Matlock Industries' investment turnover, we use the formula:
\[ \text{Investment Turnover} = \frac{\text{Sales Revenue}}{\text{Average Invested Assets}} \]
From the provided information in the annual report:
\[ \text{Investment Turnover} = \frac{560,000}{450,000} \]
Calculating this, we get:
\[ \text{Investment Turnover} = 1.24 \]
Therefore, Matlock Industries' investment turnover is 1.24.
So, the correct answer among the options provided is:
c. 1.24
Investment turnover is a financial metric that measures a company's efficiency in generating sales revenue relative to its average invested assets. In this context, Matlock Industries generated $1.24 in sales revenue for every dollar invested in assets. A higher investment turnover ratio generally indicates more efficient utilization of assets to generate revenue. It suggests that Matlock is effective in converting its invested assets into sales. Understanding this ratio is crucial for assessing a company's operational efficiency and its ability to generate revenue from its invested capital.