Question

The Top Hat Division of​ Blandon's Fine Menswear had the following results last year​ (in thousands). Sales $ 5 comma 100 comma 000 Operating income $ 510 comma 000 Total assets $ 3 comma 000 comma 000 Current liabilities $ 270 comma 000 ​Management's target rate of return is 23​% and the weighted average cost of capital is 13​%. What is the Top Hat​ Division's capital​ turnover?

Answer 1

1.5

Step-by-step explanation:

The computation of the capital turnover is shown below:

Capital turnover = Sales ÷ Total assets

where,

Sales is $5,100,000

And, the total assets is $3,000,000

So, the capital turnover is

= $5,100,000 ÷ $3,000,000

= 1.5

By dividing the sales from the total assets we can get the capital turnover and the same is shown above