Question
Asset Turnover The ABC Depot reported the following data (in millions) in its recent financial statements: Year 2 Year 1 Sales $65,780 $61,930 Total assets
Asset Turnover
The ABC Depot reported the following data (in millions) in its recent financial statements:
Year 2 | Year 1 | |||
Sales | $65,780 | $61,930 | ||
Total assets at the end of the year | 48,800 | 52,400 | ||
Total assets at the beginning of the year | 52,400 | 60,200 |
a. Determine the asset turnover for The ABC Depot for Year 2 and Year 1. Round to one decimal place.
Year 2: | fill in the blank 1 |
Year 1: | fill in the blank 2 |
b. What do these turnover indicate concerning the trend in the ability of The ABC Depot to effectively use its assets to generate sales?
The company is becoming more effective in using its assets to generate revenues.
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(a) Average Total Assets = (Beginning Total Assets + Ending Total Assets) 2; Divide Sales by Average Total Assets to obtain the ratio.
(b) This ratio measures how effectively a business is using its average amount of assets to generate sales. The higher the ratio, the bette
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