Mehring Company reported net sales of $450,000, net income of $90,000, beginning total assets of $240,000, and ending total assets of $360,000. What was the company's asset turnover ratio?

Question

Quizplus · Accepted Answer

Asset turnover ratio = net sales/average total assets
Average total assets = (beginning total assets + ending total assets)/2
Average total assets = ($240,000 + $360,000)/2 = $300,000
Asset turnover ratio = $450,000/$300,000 = 1.5

Mehring Company Reported Net Sales of $450,000, Net Income of $90,000