Thank you for visiting A company had a net income of 153 300 net sales of 1 241 000 and average total assets of 730 000 What are its. This page is designed to guide you through key points and clear explanations related to the topic at hand. We aim to make your learning experience smooth, insightful, and informative. Dive in and discover the answers you're looking for!
Answer :
The company's total asset turnover was 1.70, and its return on total assets was 21.00%. So, the correct option is d.
To calculate the total asset turnover and return on total assets, we use the following formulas:
Total Asset Turnover = [tex]\frac{\text{Net Sales}}{\text{Average Total Assets}}[/tex]
Return on Total Assets (ROA) = [tex]\frac{\text{Net Income}}{\text{Average Total Assets}}[/tex]
Given:
Net income = $153,300
Net sales = $1,241,000
Average total assets = $730,000
Calculations:
Total Asset Turnover:
Total Asset Turnover = [tex]\frac{$1,241,000}{$730,000}[/tex]
Total Asset Turnover = 1.70
Return on Total Assets:
Return on Total Assets (ROA)} = [tex]\frac{$153,300}{$730,000} \times 100\%[/tex]
ROA = 0.2100* 100% = 21.00%
In summary, the company's total asset turnover was 1.70, indicating that for every dollar of assets, the company generated $1.70 in sales. The return on total assets was 21.00%, implying that the company earned a 21.00% return on its average total assets. Therefore, the correct option is d.
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