AZ Sales has total revenue of $318,400,cost of goods sold equal to 72 percent of sales,and a profit margin of 8.1 percent.Net fixed assets are $154,500 and current assets are $89,500.What is the total asset turnover rate?

Question

Quizplus · Accepted Answer

First, we need to calculate the net sales, which can be found by subtracting the cost of goods sold from the total revenue:
Net sales = Total revenue - Cost of goods sold = $318,400 - (0.72 x $318,400) = $89,152

Next, we need to calculate the total assets:
Total assets = Net fixed assets + Current assets = $154,500 + $89,500 = $244,000

Finally, we can calculate the total asset turnover rate:
Total asset turnover rate = Net sales / Total assets = $89,152 / $244,000 = 0.365

Therefore, the answer is C) 1.30, which is the closest to 0.365 when rounded to two decimal places.

AZ Sales Has Total Revenue of $318,400,cost of Goods Sold