Bountiful Company had sales of $650,000 and cost of goods sold of $200,000 during a year. The total assets balance at the beginning of the year was $175,000 and at the end of the year was $167,000. Calculate the asset turnover ratio.

Question

Quizplus · Accepted Answer

Average total assets = (Beginning total assets + Ending total assets) / 2 = ($175,000 + $167,000) / 2 = $171,000
Asset turnover ratio = Sales / Average total assets = $650,000 / $171,000 = 3.80?

Bountiful Company Had Sales of $650,000 and Cost of Goods