Exercise 8-22 Evaluating efficient use of assets LO A1

Lok Co. reports net sales of $4,932,000 for Year 2 and $8,938,000 for Year 3. End-of-year balances for total assets are Year 1, $1,575,000; Year 2, $1,754,000; and Year 3, $1,940,000. (1) Compute Lok's total asset turnover for Year 2 and Year 3.

(2) Lok's competitor has a Total Asset Turnover of 3.0 during Year 3. Is Lok performing better or worse than its competitor on the basis of total asset turnover?

multiple choice

• Worse

• Better

10 Total Asset Turnover Total Asset Turnover Choose Numerator: 1 Choose Denominator: / 1 1 = Total asset turnover Year 2 Year 3