# The Home Depot reported the following data (in millions) in its recent financial statements:Year 2Year 1Sales\$83,176\$78,812Total assets at the end of the yearTotal assets at the beginning of the year39,94640,51840,51841,084a. Determine the asset turnover for The Home Depot for Year 2 and Year 1. Round to twodecimal places.b.What conclusions can be drawn concerning the trend in the ability of TheHome Depot to effectively use its assets to generate sales?

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Step 1

The asset turnover ratio measures the value of a company's sales or revenue relative to the value of its assets. It is a indicator of how well a company is using its assets to generate income/revenue through its operations.

Step 2

Part a.) The formula for asset turnover ratio is= Total sales divided by the result of  (assets at beginning of year + assets at end of the year)/2

Using the data in the question provided, we shall calculate the asset turno...

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