Question

In: Accounting

Determine the asset turnover ratio. Round to one decimal place

A company reports the following:

Sales $1,800,000

Average total assets 1,125,000

Determine the asset turnover ratio. Round to one decimal place.

Solutions

Expert Solution

Financial ratios : Financial ratios are indicators used to assess a company's liquidity, capabilities, profitability, and overall performance.

The asset turn over ratio is used to calculate the asset's efficiency in terms of sales.

Formula for calculating Asset turnover ratio

Asset turnover ratio = Sales / Average total assets

=$1,800,000 / $1,125,000

=1.6

therefore, asset turnover ratio is 1.6

balaji rao answered 2 years ago
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