Barker, Inc. had reported the following details for the year ended December 31, 2019: $$\begin{array} { | l | r | }
\hline \text { Net sales } & \$ 24,950,000 \
\hline \text { Total assets } & 18,000,000 \
\hline \text { Total liabilities } & 11,000,000 \
\hline
\end{array}$$ The company's beginning total assets and liabilities were $15,800,000 and $9,900,000, respectively. Calculate the asset turnover ratio for 2019. (Round your answer to two decimal places.)

Question

Barker, Inc. had reported the following details for the year ended December 31, 2019: $$\begin{array} { | l | r | } 
\hline \text { Net sales } & \$ 24,950,000 \
\hline \text { Total assets } & 18,000,000 \
\hline \text { Total liabilities } & 11,000,000 \
\hline
\end{array}$$ The company's beginning total assets and liabilities were $15,800,000 and $9,900,000, respectively. Calculate the asset turnover ratio for 2019. (Round your answer to two decimal places.)

Quizplus · Accepted Answer

The asset turnover ratio is calculated as Net Sales divided by Average Total Assets. Average Total Assets = (Beginning Assets + Ending Assets) / 2 = ($15,800,000 + $18,000,000) / 2 = $16,900,000. Asset Turnover Ratio = $24,950,000 / $16,900,000 = 1.48 times.

Barker, Inc The Company's Beginning Total Assets and Liabilities Were $15,800,000 and Ended