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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883

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Survey of Accounting (Accounting I)

8th Edition
Carl Warren
ISBN: 9781305961883
Textbook Problem

Twenty metrics of liquidity, solvency, and profitability

The comparative financial statements of Automotive Solutions Inc. are as follows. The market price of Automotive Solutions Inc. common stock was $119.70 on December 31, 20Y8


Instructions

Asset turnover

To determine

Concept Introduction:

Total Asset Turnover Ratio:

Total Asset Turnover Ratio is an efficiency ratio that represents the sales earned on average assets invested in the business. It is calculated by dividing the Sales by Average total assets. The formula to calculate the Asset Turnover Ratio is as follows:

  Asset Turnover Ratio = SalesAverage total assets 

To Calculate:

The Asset Turnover

Explanation

The Asset Turnover is calculated as follows:

    20Y8
    Net Sales (A) $ 10,000,000
    Beginning Total Assets (B) $ 8,7...

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