A company has net income of $130,500. Its net sales were $1,740,000 and its total assets were $2,750,000. Its total asset turnover is equal to 4.7%.

Question

Quizplus · Accepted Answer

The calculation for asset turnover is incorrect.

Asset turnover = Net sales / Total assets

Asset turnover = $1,740,000 / $2,750,000 = 0.633

Rounding to one decimal place, the asset turnover is 0.6 or 60%. Therefore, the correct answer is B - False.

A Company Has Net Income of $130,500