Question

A company's year-end financial information shows the following amounts. Current assets $75,000 Current liabilities $30,000 Net income $34,000 Net sales $164,500 Average total assets $150,000 Based on this information, what is the company's asset turnover ratio

Answer 1

1.1 times

Step-by-step explanation:

Calculation to determine the company's asset turnover ratio

Using this formula

Asset turnover ratio=Net sales/Average total assets

Let plug in the formula

Asset turnover ratio=$164,500 / $150,000

Asset turnover ratio=1.1 times

Therefore the company's asset turnover ratio is 1.1 times