Last Year's Asset Turnover Ratio Was 2

question 39

Multiple Choice

Last year's asset turnover ratio was 2.0.Sales have increased by 25 percent and average total assets have increased by 10 percent since that time.What is the current asset turnover ratio?

• A)1.82
• B)2.05
• C)2.15
• D)2.27 sales/average total assets = 2.0

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Definitions:

Dividends in Arrears

Dividends on preferred stock that have not been paid in the scheduled time but are still owed to shareholders.

Stockholders' Equity

The residual interest in the assets of an entity that remains after deducting its liabilities.

Common Shares

Equity securities that represent ownership interests in a corporation, providing voting rights and dividends.

Book Value

The value of an asset as it appears on a balance sheet, calculated by subtracting accumulated depreciation from the asset's cost.