Title: Understanding Asset Turnover**Question:** Based on this information the company's asset turnover is**Multiple Choice Options:**- $0.68 of sales dollars per $1 of assets.- $1.55 of sales dollars per $1 of assets.- $1.06 of sales dollars per $1 of assets. *(Selected)*- None of the choices is correct.This example illustrates how to calculate and interpret the asset turnover ratio, which is a measure of how efficiently a company uses its assets to generate sales. The selected option indicates that the company generates $1.06 in sales for every dollar invested in assets. Understanding this ratio helps assess the effectiveness of a company's asset utilization. The following information was drawn from the accounting records of Jones Company. *(Round your answer.)*- **Net sales**: $361,290- **Net income**: $56,000- **Average total assets**: $530,000- **Average total liabilities**: $330,000- **Average total stockholders' equity**: $215,000Based on this information, the company's asset turnover is:**Multiple Choice:**- $0.68 of sales dollars per $1 of assets.- $1.55 of sales dollars per $1 of assets.- $1.06 of sales dollars per $1 of assets. *(Selected)*

Assets turnover ratio = Net sales / Average total assetsAssets turnover ratio = $361,290 / $530,000 = 0.68 Option #1 is correct. $0.68 of sales dollars per $1 of assets.

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Accounting

The following information was drawn from the accounting records of Jones Company. (Round your ang Net sales $361,290 Net income 56,000 Average total assets 530,000 Average total liabilities Average total stockholders' equity 330,000 215,000 Based on this information the company's asset turnover is

The following information was drawn from the accounting records of Jones Company. (Round your ang Net sales $361,290 Net income 56,000 Average total assets 530,000 Average total liabilities Average total stockholders' equity 330,000 215,000 Based on this information the company's asset turnover is

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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