Chapter 6, Problem 6.31EX

Asset turnover

The Home Depot reported the following data (in millions) in its recent financial statements:

	Year 2	Year 1
Sales	$83,176	$78,812
Total assets at the end of the year	39,946	40,518
Total assets at the beginning of the year	40,518	41,084

1. a. Determine the asset turnover for The Home Depot for Year 2 and Year 1. Round to two decimal places.
2. b. What conclusions can be drawn concerning the trend in the ability of The Home Depot to effectively use its assets to generate sales?