Asset Turnover Financial statement data for the years ending December 31, 20Y3 and 20Y2, for Linstrum Company follow: 20Υ3 20Υ2 Sales $2,310,000 $2,278,000 Total assets: Beginning of year 680,000 660,000 End of year 720,000 680,000 a. Determine the asset turnover for 20Y3 and 20Y2. Round your answers to one decimal place. 20Υ3 20Υ2 Asset turnover b. Is the change in the asset turnover from 20Y2 to 20Y3 favorable or unfavorable? Unfavorablev
Asset Turnover Financial statement data for the years ending December 31, 20Y3 and 20Y2, for Linstrum Company follow: 20Υ3 20Υ2 Sales $2,310,000 $2,278,000 Total assets: Beginning of year 680,000 660,000 End of year 720,000 680,000 a. Determine the asset turnover for 20Y3 and 20Y2. Round your answers to one decimal place. 20Υ3 20Υ2 Asset turnover b. Is the change in the asset turnover from 20Y2 to 20Y3 favorable or unfavorable? Unfavorablev
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Asset Turnover
Financial statement data for the years ending December 31, 20Y3 and 20Y2, for Linstrum Company follow:
20Υ3
20Υ2
Sales
$2,310,000
$2,278,000
Total assets:
Beginning of year
680,000
660,000
End of year
720,000
680,000
a. Determine the asset turnover for 2OY3 and 20Y2. Round your answers to one decimal place.
20Y3
20Υ2
Asset turnover
b. Is the change in the asset turnover from 20Y2 to 20Y3 favorable or unfavorable?
Unfavorable v
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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 better.
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