Kaleb’s Karate Supply had a profit margin of 11 percent, sales of $21.4 million, and total...

Kaleb’s Karate Supply had a profit margin of 11 percent, sales of $21.4 million, and total assets of $9.4 million.

What was the total asset turnover?

If management set a goal of increasing total asset turnover to 2.75 times, what would the new sales figure need to be, assuming no increase in total assets?

Expert Solution

Sales = 21.4 millions

Total assets = 9.4 millions

Asset turnover = Net sales

Assets

= 21.4

9.4

= 2.28 times

If management set a goal of increasing total asset turnover to 2.75 times,

new sales figure need to be = Total assets X Asset turnover ratio

= 2.75 X 9.4

= 25.85 millions

jeff jeffy answered 2 years ago

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