The year-end Year 2 financial statements for Grandier Inc., report net sales of $115,004 million, net...

The year-end Year 2 financial statements for Grandier Inc., report net sales of $115,004 million, net operating profit after tax of $4,593 million, net operating assets of $39,502 million. The year-end Year 1 balance sheet reports net operating assets of $41,829 million.

The company’s year-end Year 2 net operating asset turnover is:

Select one:

a. 2.91

b. There is not enough information to calculate the ratio.

c. 11.6%

d. 11.3%

e. 2.83

Expert Solution

Answer: e) 2.83

Net Operating asset turnover ratio= (Sales/Average net operating assets)

Net sales= $115,004 million

Average net operating assets= (Asset at beginning of the year + Assets at the end of the year)/2

= ($41,829 + $39,502)/2

= $40,665.5 million

Therefore, Net operating asset turnover ratio = Sales/Average net operating assets

= $115,004 million / $40,665.5 million

= 2.83 (Rounded)

ekkarill92 answered 2 years ago

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