Kermit calculated his total asset turnover to be 1.13. This tells Kermit that every
A) dollar of assets generates $1.13 in sales.
B) dollar of sales costs Kermit $1.13 to generate.
C) year he turns his inventory 1.13 times.
D) dollar of assets generates $1.13 in profits.

Question

Quizplus · Accepted Answer

Total asset turnover is calculated as sales divided by total assets. Therefore, a total asset turnover of 1.13 means that for every dollar of assets Kermit has, he generates $1.13 in sales.

Kermit Calculated His Total Asset Turnover to Be 1