The balance sheet of Computer World reports total assets of $350,000 and $450,000 at the beginning and end of the year,respectively.Sales revenues are $800,000,net income is $100,000,and net cash flows from operating activities are $150,000.What is Computer World's asset turnover?
A)2.0 times.
B)2.3 times.
C)0.5 times.

Question

Quizplus · Accepted Answer

Asset turnover is calculated as sales revenue divided by average total assets. The average total assets are ($350,000 + $450,000) / 2 = $400,000. Therefore, asset turnover is $800,000 / $400,000 = 2.0 times.

The Balance Sheet of Computer World Reports Total Assets of $350,000