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 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

Answer 1