Baker,Inc.had reported the following details for the year ended December 31,2017: $$\begin{array} { | l | r | }
\hline \text { Net sales } & \$ 25,450,000 \
\hline \text { Total assets } & 17,700,000 \
\hline \text { Total liabilities } & 10,300,000 \
\hline
\end{array}$$ The company's beginning total assets and liabilities were $14,400,000 and $9,200,000,respectively.Calculate the asset turnover ratio for 2017.

Question

Baker,Inc.had reported the following details for the year ended December 31,2017: $$\begin{array} { | l | r | } 
\hline \text { Net sales } & \$ 25,450,000 \
\hline \text { Total assets } & 17,700,000 \
\hline \text { Total liabilities } & 10,300,000 \
\hline
\end{array}$$ The company's beginning total assets and liabilities were $14,400,000 and $9,200,000,respectively.Calculate the asset turnover ratio for 2017.

Quizplus · Accepted Answer

The asset turnover ratio is calculated as Net Sales divided by Average Total Assets. Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2 = ($14,400,000 + $17,700,000) / 2 = $16,050,000. Asset Turnover Ratio = $25,450,000 / $16,050,000 = 1.59 times.

Baker,IncHad Reported the Following Details for the Year Ended December