The balance sheet of Hidden Valley Farms reports total assets of $450,000 and $550,000 at the beginning and end of the year,respectively.Net income and sales for the year are $100,000 and $800,000,respectively.What is Hidden Valley's asset turnover?

Question

Quizplus · Accepted Answer

Asset turnover is calculated as Sales divided by Average Total Assets. The average total assets are ($450,000 + $550,000) / 2 = $500,000. Therefore, the asset turnover is $800,000 / $500,000 = 1.6 times.

The Balance Sheet of Hidden Valley Farms Reports Total Assets