Chapter 6, Problem 6.31EX

a.

To determine

Asset turnover ratio is used to determine the efficiency of the company towards use of asset towards generation of sales. The formula to calculate asset turnover is given below:

$\text{Asset}\text{turnover}\text{=}\frac{\text{Net}\text{revenue}}{\text{Average total assets}}$

The asset turnover for Company K.

b.

To determine

To Comment: Why Company T’s asset turnover is lower than Company K.