The Lumber Division
The Lumber Division of Home Innovations Company reported the following results for a recent year
$\begin{array}{ll}
\text {Sales } & \$ 8,000,000 \
\text {Expenses } & 6,250,000\\
\text { Total assets(1/1) } & 5,000.000\
\text { Total assets(12/31) } & 5,400.000
\end{array}$

Refer to the Lumber Division
What was the asset turnover ratio of the Lumber Division?
A)1.538
B)2.97
C)0.650
D)1.20

Question

The Lumber Division
The Lumber Division of Home Innovations Company reported the following results for a recent year
$\begin{array}{ll}
\text {Sales } & \$ 8,000,000  \
\text {Expenses } &  6,250,000\\
\text { Total assets(1/1) } & 5,000.000\
\text { Total assets(12/31) } & 5,400.000
\end{array}$

Refer to the Lumber Division
What was the asset turnover ratio of the Lumber Division?
A)1.538
B)2.97
C)0.650
D)1.20

Quizplus · Accepted Answer

The asset turnover ratio is calculated as Sales divided by Average Total Assets. Average Total Assets = (Beginning Assets + Ending Assets) / 2 = (5,000,000 + 5,400,000) / 2 = 5,200,000. Asset Turnover Ratio = 8,000,000 / 5,200,000 = 1.538.

The Lumber Division the Lumber Division of Home Innovations Company

The Lumber Division
the Lumber Division of Home Innovations Company