J. C. Penney: Asset turnover ratio

J. C. Penney Company, Inc. is a large general merchandise retailer in the United States. The following data were obtained from its financial statements for four recent years:

		Year 4	Year 3	Year 2	Year 1
Total sales		$12,257	$11,859	$12,985	$17,260
Total assets:
Beginning of year		11,801	9,781	11,424	13,068
End of year		10,404	11,801	9,781	11,424

a. Compute the asset turnover ratio for each year. (Round to two decimal places).

		Year 1	Year 2	Year 3	Year 4
Asset turnover ratio

b. On your own paper, plot the asset turnover ratio on a line chart with the year on the horizontal axis.

c. Interpret the trend in this ratio over the four years.

The asset turnover ratio has clearly over the four-year period. This trend suggests that its sales are faster than its assets.