During the year 2015,Sanchez Corp.sold goods and earned revenue of $16,000,000.The corporation's beginning total assets was $8,000,000.Its assets turnover ratio was 1.6 times.Calculate the ending total assets of Sanchez.

Question

Quizplus · Accepted Answer

The asset turnover ratio is calculated as Revenue / Average Total Assets. Given the ratio is 1.6 and revenue is $16,000,000, we can find the average total assets: $16,000,000 / 1.6 = $10,000,000. The average total assets is the mean of beginning and ending assets: ($8,000,000 + Ending Assets) / 2 = $10,000,000. Solving for Ending Assets gives $12,000,000.

During the Year 2015,Sanchez Corp