The ABC Depot reported the following data (in millions) in its recent financial statements: Year 1 Total sales Total assets: Year 2 Year 2 $102,880 Beginning of year 59,800 55,600 End of year 68,800 59,800 a. Determine the asset turnover ratio for ABC Depot for Year 2 and Year 1. Round to one decimal place. Year 1 $103,860 Asset turnover ratio b. What does an asset turnover ratio indicate? 1. Effectiveness in the use of assets to generate revenue. 2. Effective use of revenue to create assets. 3. Effective use of assets to reduce cost. 4. Effective use of assets to increase assets.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Analyze ABC Depot
The ABC Depot reported the following data (in millions) in its recent financial statements:
Total sales
Total assets:
Year 2
Year 2
$102,880
Year 1
Beginning of year
59,800
End of year
68,800
a. Determine the asset turnover ratio for ABC Depot for Year 2 and Year 1. Round to one decimal place.
Year 1
Asset turnover ratio
b. What does an asset turnover ratio indicate?
$103,860
1. Effectiveness in the use of assets to generate revenue.
2. Effective use of revenue to create assets.
3. Effective use of assets to reduce cost.
4. Effective use of assets to increase assets.
55,600
59,800
Transcribed Image Text:Analyze ABC Depot The ABC Depot reported the following data (in millions) in its recent financial statements: Total sales Total assets: Year 2 Year 2 $102,880 Year 1 Beginning of year 59,800 End of year 68,800 a. Determine the asset turnover ratio for ABC Depot for Year 2 and Year 1. Round to one decimal place. Year 1 Asset turnover ratio b. What does an asset turnover ratio indicate? $103,860 1. Effectiveness in the use of assets to generate revenue. 2. Effective use of revenue to create assets. 3. Effective use of assets to reduce cost. 4. Effective use of assets to increase assets. 55,600 59,800
The ABC Depot reported the following data (in millions) in its recent financial statements:
Year 2
Year 1
$102,880
$103.860
Total sales
Total assets:
Beginning of year
End of year
59.800
68,800
55,600
59,800
a. Determine the asset turnover ratio for ABC Depot for Year 2 and Year 1. Round to one de
place.
Transcribed Image Text:The ABC Depot reported the following data (in millions) in its recent financial statements: Year 2 Year 1 $102,880 $103.860 Total sales Total assets: Beginning of year End of year 59.800 68,800 55,600 59,800 a. Determine the asset turnover ratio for ABC Depot for Year 2 and Year 1. Round to one de place.
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