Question

A firm with $600,000 in sales, cash on hand of $750,000, liabilities of $200,000 and total assets of $1 million has a total asset turnover of ______ times. A firm with $600,000 in sales, cash on hand of $750,000, liabilities of $200,000 and total assets of $1 million has a total asset turnover of ______ times.

Answer 1

Answer: 0.6

Step-by-step explanation:

Sales = $600,000

Cash on hand = $750,000,

Liabilities = $200,000

Total assets = $1 million

The formula for assets turnover is:

= Sales / Assets

where,

Sales = $600,000

Assets = $1,000,000

Therefore, asset turnover = $600,000 / $1,000,000 = 0.6

Therefore, the assets turnover is 0.6