Question

Bountiful company had sales of $650,000 and cost of goods sold of $200,000 during a year. the total assets balance at the beginning of the year was $175,000 and at the end of the year was $167,000. calculate the asset turnover ratio.

Answer 1

The asset turnover ratio is 3.80.The asset turnover ratio is a number that shows how much revenue is being earned for every dollar the company has spent on assets. Asset turnover ratio=Net revenue/Average total Assets Thus,by applying the Formula we get Asset turnover ratio=3.80