Edmond reported average total assets of $9,965 million and net sales of $10,430 million. Its total asset turnover equals .96.
Total Asset Turnover = Net Sales/Average Total Assets
Total Asset Turnover = $10,430/$9,965 = 1.05

Question

Quizplus · Accepted Answer

The calculation of the total asset turnover is incorrect. Using the given formula, the correct calculation is:

Total Asset Turnover = Net Sales/Average Total Assets
Total Asset Turnover = $10,430/$9,965 = 1.045

Therefore, the statement that the total asset turnover equals 0.96 is false.

Edmond Reported Average Total Assets of $9,965 Million and Net