Question

In: Finance

A small business has sales of $2 million, cost of goods sold of $12 million, net...

A small business has sales of $2 million, cost of goods sold of $12 million, net profit of $34,500,net fixed assets of $200,000, and total asset turnover of 5.25. What is the value of current assets?

Solutions

Expert Solution

Total asset turnover = Net sales / Total assets

5.25 = $2,000,000 / Total assets

Total assets = $2,000,000 / 5.25

Total assets = $380,952

Current assets = Total assets - Fixed assets

Current assets = $380,952 - $200,000

Current assets = $180,952


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