Question
Asked Nov 4, 2019

During 2020, Metlock, Inc. reported net sales of $2,850,900 and net income of $1,550,000. Its balance sheet reported average total assets of $1,290,000.

Calculate the asset turnover. (Round answer to 2 decimal places, e.g. 1.25.)

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Expert Answer

Step 1

Asset turnover ratio calculates how much the company was able to generate revenue using it's assets. Hence, the formula of Asset turnover ratio = Net Sales/Average Assets, where average assets = Beginning Assets+ Ending Assets/2

 

Step 2

We can calculate the asset turnover ratio by dividing Net Sales by average total ass...

Metlock Inc. 2020
Net Sales
Average Total Assets
2,850,900
1,290,000
Asset Turnover Ratio
2.21
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Metlock Inc. 2020 Net Sales Average Total Assets 2,850,900 1,290,000 Asset Turnover Ratio 2.21

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