Analyze ABC Depot

The ABC Depot reported the following data (in millions) in its recent financial statements:

	Year 2		Year 1
Total sales	$81,430		$75,040
Total assets:
Beginning of year	46,200		49,600
End of year	49,600		57,600

a. Determine the asset turnover ratio for ABC Depot for Year 2 and Year 1. Round to one decimal place.

		Year 2		Year 1
Asset turnover ratio		fill in the blank 1		fill in the blank 2

b. What does an asset turnover ratio indicate?

1. Effectiveness in the use of assets to generate revenue.
2. Effective use of revenue to create assets.
3. Effective use of assets to reduce cost.
4. Effective use of assets to increase assets.