During 2014, Rathke Corporation reported net sales of $3,000,000, net income of $1,440,000, and depreciation expense of $120,000. Rathke also reported beginning total assets of $1,000,000, ending total assets of $1,500,000, plant assets of $960,000, and accumulated depreciation of $600,000. Rathke's asset turnover ratio is

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 = ($1,000,000 + $1,500,000) ÷ 2
Average Total Assets = $1,250,000

Asset turnover ratio = $3,000,000 ÷ $1,250,000
Asset turnover ratio = 2.4 times

During 2014, Rathke Corporation Reported Net Sales of $3,000,000, Net