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Chapter 9: Q14SE (page 528)

Computing the asset turnover ratio Biagas, Inc. had net sales of \(55,600,000 for the year ended May 31, 2018. Its beginning and ending total assets were \)52,800,000 and $98,500,000, respectively. Determine Biagas鈥檚 asset turnover ratio for year ended May 31, 2018.

Short Answer

Expert verified

Asset turnover ratio is 0.7349.

Step by step solution

01

Step 1 Meaning of Asset Turnover Ratio

Asset Turnover ratio defines as its measures the amount of net sales generated for each average dollar with the amount of total assets which have been invested.

02

Calculation of Asset turnover ratio for year ended May 31st, 2018

Assetturnoverratio=NetsalesrevenueAveragetotalassets=$55,600,000$52,800,000+$98,500,0002=$55,600,000$75,650,000=0.7349

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Most popular questions from this chapter

Making a lump-sum asset purchase

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Requirements

1. When a business sells a fully depreciated asset for its residual value, is a gain or loss recognized?

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3. How would an organization prevent the kind of fraud depicted here?

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