The Appliance Division
The Appliance Division of Electrotech Corporation reported the following results for a recent year
$\begin{array}{ll}
\text {Sales } & \$ 9,000,000 \
\text {Expenses } & 7,500,000\\
\text { Total assets(1/1) } &6,000.000\
\text { Total assets(12/31) } & 6,200.000
\end{array}$

Refer to the Appliance Division
What was the asset turnover ratio of The Appliance Division?
A)1.475
B)3.48
C)0.680
D)1.23

Question

The Appliance Division
The Appliance Division of Electrotech Corporation reported the following results for a recent year
$\begin{array}{ll}
\text {Sales } & \$ 9,000,000  \
\text {Expenses } &  7,500,000\\
\text { Total assets(1/1) } &6,000.000\
\text { Total assets(12/31) } & 6,200.000
\end{array}$

Refer to the Appliance Division
What was the asset turnover ratio of The Appliance Division?
A)1.475
B)3.48
C)0.680
D)1.23

Quizplus · Accepted Answer

The asset turnover ratio is calculated as Sales divided by Average Total Assets. Average Total Assets = (Total assets at the beginning + Total assets at the end) / 2 = (6,000,000 + 6,200,000) / 2 = 6,100,000. Asset Turnover Ratio = Sales / Average Total Assets = 9,000,000 / 6,100,000 = 1.475.

The Appliance Division the Appliance Division of Electrotech Corporation Reported

The Appliance Division
the Appliance Division of Electrotech Corporation Reported