Mehring Company reported net sales of $270,000, net income of $54,000, beginning total assets of $240,000, and ending total assets of $360,000. What was the company's asset turnover ratio?
A) 1.13
B) 0.18
C) 0.90
D) 1.11

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 = $270,000 / $300,000 = 0.90

Mehring Company Reported Net Sales of $270,000, Net Income of $54,000