Company X has net sales revenue of $1,250,000, cost of goods sold of $760,000, and all other expenses of $290,000. The beginning balance of stockholders' equity is $400,000 and the beginning balance of fixed assets
Is $361,000. The ending balance of stockholders' equity is $600,000 and the ending balance of fixed assets is
$389,000. What is the fixed asset turnover ratio?
A) 0.53
B) 2.50
C) 3.33
D) 0.80

Question

Quizplus · Accepted Answer

Fixed Asset Turnover Ratio = Net Sales / Average Fixed Assets
Average Fixed Assets = (Beginning Fixed Assets + Ending Fixed Assets) / 2
Average Fixed Assets = ($361,000 + $389,000) / 2 = $375,000
Fixed Asset Turnover Ratio = $1,250,000 / $375,000 = 3.33

Company X Has Net Sales Revenue of $1,250,000, Cost of Goods