Consider the following financial data for Leon’s Music Stores: Statement of Financial Position as of December 31, 2012 Cash & equivalents $ 100,500   Accounts payable $ 119,500 Accounts receivable   232,000   Notes payable   141,000 Inventories   281,000   Accrued wages and taxes   46,000   Total current assets $ 613,500     Total short-term liab. $ 306,500         Long-term debt   401,000 Net fixed assets   565,500   Common equity   471,500 Total assets $ 1,179,000   Total liabilities & equity $ 1,179,000               Statement of Earnings for the Year Ended December 31, 2012 Net sales $ 881,500 Cost of sales   526,000 Gross profit $ 355,500 Operating expenses   215,000   Earnings before interest and taxes (EBIT) $ 140,500 Interest expense   49,000   Earnings before taxes (EBT) $ 91,500 Federal and state income taxes (35 percent)   32,025 Net income $ 59,475       Calculate Leon’s total asset turnover.   a. 2.25   b. 0.75   c. 5.04   d. 3.14   e. 21.17

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
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  1. Consider the following financial data for Leon’s Music Stores:

    Statement of Financial Position as of December 31, 2012
    Cash & equivalents
    $
    100,500
      Accounts payable $
    119,500
    Accounts receivable  
    232,000
      Notes payable  
    141,000
    Inventories  
    281,000
      Accrued wages and taxes  
    46,000
      Total current assets
    $
    613,500
        Total short-term liab. $
    306,500
            Long-term debt  
    401,000
    Net fixed assets  
    565,500
      Common equity  
    471,500
    Total assets
    $
    1,179,000
      Total liabilities & equity $
    1,179,000
                 
    Statement of Earnings for the Year Ended December 31, 2012
    Net sales
    $
    881,500
    Cost of sales  
    526,000
    Gross profit
    $
    355,500
    Operating expenses  
    215,000
      Earnings before interest and taxes (EBIT)
    $
    140,500
    Interest expense  
    49,000
      Earnings before taxes (EBT)
    $
    91,500
    Federal and state income taxes (35 percent)  
    32,025
    Net income
    $
    59,475
         

    Calculate Leon’s total asset turnover.
      a.
    2.25
      b.
    0.75
      c.
    5.04
      d.
    3.14
      e.
    21.17
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