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43 Following is information relating to Watson, Inc. Assume that all balance sheet accounts represent both average and ending balance figures and that all sales
43
Following is information relating to Watson, Inc. Assume that all balance sheet accounts represent both average and ending balance figures and that all sales were on credit. $ Assets Cash and short-term investments Accounts receivable (net) Merchandise inventory Property, plant, and equipment Total assets 30,000 20,000 15,000 185,000 250,000 $ Liabilities and Stockholders' Equity Current liabilities $ 45,000 Long-ter liabilities 70,000 Stockholders' equity - common 135,000 Total liabilities and stockholders' equity $ 260,000 $ Income Statement Sales Cost of merchandise sold Gross profit Operating expenses Interest expense Net income $ 85,000 45,000 40,000 (15,000) (5,000) 20,000 $ Number of shares of common stock outstanding Market price of common stock Total dividends paid Net cash flows from operating activities 6,000 $ 20 $ 9,000 $ 30,000 LUNYI HUMOS Stockholders' equity - common Total liabilities and stockholders' equity $ vy 135,000 250,000 Income Statement Sales Cost of merchandise sold Gross profit Operating expenses Interest expense Net income $ 85,000 45,000 40,000 (15,000) (5,000) 20,000 $ 20 Number of shares of common stock outstanding 6,000 Market price of common stock $ Total dividends paid $ 9,000 Net cash flows from operating activities $ 30,000 Using the data provided, what is the asset turnover for Watson, Inc.? a) 1.00 b) 2.94 c) 0.18 d) 0.34
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