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The Following Information Is Provided for Nguyen Company and Northwest

Question 180

Multiple Choice

The following information is provided for Nguyen Company and Northwest Corporation.  (in $ millions)    Nquyen Company    Northwest Corporation   Net income 2014$275$390 Net sales 20141,5004,100 Total assets 12/31/121,0002,400 Total assets 12/31/131,0503,000 Total assets 12/31/141,1504,000\begin{array} { l c c } { \text { (in } \$ \text { millions) } } & \text { \underline{\text{ Nquyen Company }} } & \text { \underline{\text{ Northwest Corporation }} } \\ \text { Net income } 2014 & \$ 275 & \$ 390 \\\text { Net sales } 2014 & 1,500 & 4,100 \\\text { Total assets } 12 / 31 / 12 & 1,000 & 2,400 \\\text { Total assets } 12 / 31 / 13 & 1,050 & 3,000 \\\text { Total assets } 12 / 31 / 14 & 1,150 & 4,000\end{array} If Nguyen and Northwest are in the same industry and the industry average for the asset turnover ratio is equal to 1.20 times, which of the following statements is true?


A) Nguyen is operating more efficiently than the industry.
B) Northwest is operating more efficiently than Nguyen.
C) Both Nguyen and Northwest are operating more efficiently than the average company in their industry.
D) The asset turnover ratio does not address the question of efficient operations.

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