Asked Jan 10, 2020

Liberty Corporation reported beginning and ending total assets of $25,000 and $22,000, respectively. Its net sales for the year were $18,800. What was Liberty’s asset turnover ratio?

  • 0.75 
  • 0.85
  • 0.80
  • 1.25

Expert Answer

Step 1

Asset turnover ratio:


Asset turnover ratio measures the productive capacity of the total assets to generate the sales revenue for the company. Thus, it shows the relationship between the net sales and the average total assets. Use the following formula to calculate the asset turnover ratio:

Accounting homework question answer, step 1, image 1
Step 2

Calculate the asset turnover ratio of...

Accounting homework question answer, step 2, image 1

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in



Financial Management

Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: Identify the following costs as a prime cost (P), conversion cost (C), or both (B) for an automobile...

A: Prime cost: Prime cost refers to a cost which is directly involved in the process of manufacturing a...


Q: Production-volume variance analysis and sales-volume variance. Chart Hills Company makes customized ...

A: 1. Compute the fixed overhead spending variance and identify whether it is favourable or unfavourabl...


Q: What is management by exception? Give three examples?

A: Management by Exception: Management by exception is the process of finding the deviations in the fin...


Q: What is Rule 203 of the Code of Professional Conduct?

A: Click to see the answer


Q: Consider internal control over receivables collections. What job must be withheld from a company’s c...

A: In order to prevent the cash frauds, the following jobs must be withheld from a company’s credit dep...


Q: The following data were taken from the financial statements of Hunter Inc. for December 31 of two re...

A:  a (1 &b)  


Q: “The production-volume variance should always be written off to Cost of Goods Sold.” Do you agree? E...

A: Production-Volume Variance:It reports that amount which is result of the multiplication of differenc...


Q: Silverman Company purchased machinery for $162,000on January 1, 2017. It is estimated that the machi...

A: Depreciation: Depreciation is a method of reducing the capitalized cost of long-lived operating asse...


Q: Indicate three reasons why a company might sell itsreceivables to another company

A: Selling accounts receivables is also known as factoring.  Companies may sell its accounts receivable...