Williams Manufacturing uses scrap metal to produce various tools, such as drill bits, hammer heads, saw blades,

Question:

Williams Manufacturing uses scrap metal to produce various tools, such as drill bits, hammer heads, saw blades, and nails. The CEO has asked you to analyze the saw blades division to determine asset turnover for last quarter. You find that the saw blades division had an ROI of 20 percent, sales of $10 million, and operating profits of $1 million. What was the asset turnover rate for last quarter?

Asset Turnover
Asset turnover is sales divided by total assets. Important for comparison over time and to other companies of the same industry. This is a standard business ratio.