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For 2007, Colaw Company reports beginning of the year total assets of $900,000, end of the year total assets of $1,100,000, net sales of $1,250,000, and net income of $250,000.
-Colaw's 2007 asset turnover ratio is

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Quizplus · Accepted Answer

The asset turnover ratio is calculated by dividing net sales by average total assets. The average total assets for Colaw Company is (beginning total assets + ending total assets)/2 = ($900,000 + $1,100,000)/2 = $1,000,000. Therefore, the asset turnover ratio for Colaw Company is $1,250,000/$1,000,000 = 1.25 times.

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