During 2010, Stein Corporation reported net sales of $3,000,000 and net income of $1,800,000. Stein also reported beginning total assets of $1,000,000 and ending total assets of $1,500,000. Stein's asset turnover ratio is
A) 3.0 times.
B) 2.4 times.
C) 2.0 times.
D) 1.4 times.

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 = $1,250,000

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

During 2010, Stein Corporation Reported Net Sales of $3,000,000 and Net