Question

Use the following selected 2016 balance sheet and income statement information for Home Garden Supply Co. (in millions) to compute asset turnover (AT) to the nearest hundredth of a percent.

Net income Gross profit on sales Average total assets Sales Tax rate on operating profit
$69,960 $700,400 $360,600 $1,356,504 35%

Select one:

a. 5.16%
b. 9.99%
c. 51.63%
d. 33.56%

Answer 1

Answer:

3.76 times

Explanation:

The computation of the asset turnover is shown below:

Asset turnover = Net sales ÷ Average total assets

= $1,356,504 ÷ $360,600

= 3.76 times

By dividing the net sales from the average total assets, the asset turnover could arrive i.e 3.76 times

This is the answer but the same is not provided in the given options