Company X Has Net Sales Revenue of $1,250,000, Cost of Goods

question 27

Multiple Choice

Company X has net sales revenue of $1,250,000, cost of goods sold of $760,000, and all other expenses of $290,000. The beginning balance of stockholders' equity is $400,000 and the beginning balance of fixed assets
Is $361,000. The ending balance of stockholders' equity is $600,000 and the ending balance of fixed assets is
$389,000. What is the fixed asset turnover ratio?

• A) 0.53
• B) 2.50
• C) 3.33
• D) 0.80

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Definitions:

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of the business, whichever is longer.

Acid-Test Ratio

A liquidity ratio that measures a company's ability to pay off its current liabilities with its most liquid assets, excluding inventory.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its current assets.

Accounts Receivable Turnover

A financial ratio indicating how efficiently a company collects its accounts receivable, calculated as net credit sales divided by average accounts receivable.