A firm has net working capital of $600,net fixed assets of $2,400,sales of $8,000,and current liabilities of $800. How many dollars worth of sales are generated from every $1 in total assets?
A) $2.11
B) $2.32
C) $3.73
D) $4.52
E) $6.70

Question

Quizplus · Accepted Answer

Total assets are the sum of net working capital and net fixed assets. Net working capital is current assets minus current liabilities, so current assets are $600 + $800 = $1,400. Total assets are $1,400 + $2,400 = $3,800. Sales per dollar of total assets is $8,000 / $3,800 = $2.11.

A Firm Has Net Working Capital of $600,net Fixed Assets