Please refer to Table 4-3 for the following questions.
Table 4-3
Emery Corporation
Balance Sheet Income Statement

-Based on the information in Table 4-3,the total asset turnover is
A) 2.10 times.
B) 2.42 times.
C) 2.87 times.
D) 3.25 times.

Question

Please refer to Table 4-3 for the following questions.
Table 4-3
Emery Corporation
Balance Sheet Income Statement
 
-Based on the information in Table 4-3,the total asset turnover is
A) 2.10 times. 
B) 2.42 times. 
C) 2.87 times. 
D) 3.25 times.

Quizplus · Accepted Answer

Total asset turnover can be calculated by dividing net sales by average total assets. From the income statement, we can see that net sales are $58,900. From the balance sheet, the average total assets can be calculated as (Beginning total assets + Ending total assets) / 2 = ($114,700 + $97,700) / 2 = $106,200. Therefore, total asset turnover is $58,900 / $106,200 = 0.554 or 2.42 times. The best choice is B.

Please Refer to Table 4-3 for the Following Questions