The following information is available for the Peppercorn Company:

-What is the capital turnover?
A) 1.600
B) 0.100
C) 0.625
D) None of the above.

Question

The following information is available for the Peppercorn Company:
 
-What is the capital turnover?
A) 1.600 
B) 0.100 
C) 0.625 
D) None of the above.

Quizplus · Accepted Answer

Capital turnover is calculated by dividing net sales by average total assets. In this case, net sales are $1,000,000 and average total assets are $625,000. Therefore, capital turnover is $1,000,000 / $625,000 = 1.600.

The Following Information Is Available for the Peppercorn Company