Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
5th Edition
ISBN: 9780134078939
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 9, Problem 9.14SE
To determine
Asset turnover: It is a ratio that measures the productive capacity of the assets to generate the sales revenue for the company. Thus, it shows the relationship between the net sales and the average total assets. The following is the formula to calculate the ratio:
To Compute: the asset turnover for the Company B for the year ended May 31, 2016.
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Computing Asset Ratios
The following information relates to Nicke Inc.
Total
Fixed
Total
Net
$ millions
Assets
Assets Revenue Income
Fiscal Year 2016 $10,560 $64,188 $97,128 $11,280
Fiscal Year 2015
28,002 200,852
91,803
9,819
Fiscal Year 2014
8,502 55,782
Nicke's fiscal years 2016, 2015, and 2014, end on May 31, 2016, 2015, and 2014, respectively.
Required
a. Compute the asset turnover ratio for fiscal years 2016 and 2015.
b. Compute the return on assets ratio for fiscal years 2016 and 2015.
c. Compute the fixed asset turnover ratio for fiscal years 2016 and 2015.
Note: Do not round until your final answers. Round final answers to two decimal places.
Ratio
2016
2015
a. Asset turnover
0.73 v
0.72 v
b. Return on assets
8.53 x
7.65 x
c. Fixed asset turnover
5.04 v
5.03 v
The balance sheet of Huan Corporation reported net fixed assets of $332,000 at the end of 2018. The fixed- asset turnover ratio for 2018 was 4.0, and sales for the year totaled $1,540,000. Net fixed assets at the end of 2017 were:
A. $491,000. B. $385,000. C. $438,000 D. $408,000
In its 2017 annual report, Crane Manufacturing Company reports beginning-of-the-year total assets of $ 2,322,000, end-of-the-year
total assets of $ 2,803,000, total sales of $ 4,886,000, and net income of $ 805,000.
(a)
Compute Crane's asset turnover. (Round answer to 3 decimal places, e.g. 4.870.)
Asset turnover ratio
times
Chapter 9 Solutions
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
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