A Firm Has Sales of $5 Million, Average Total Assets

question 45

Essay

A firm has sales of $5 million, average total assets of $1.6 million, average fixed assets of $1 million, and average current liabilities of $300,000.Given this information, answer the following about the firm's efficiency:
Calculate asset turnover, fixed asset turnover, and NWC turnover ratios.
Can the fixed asset turnover be considered appropriate and yet the total asset turnover be considered low by industry standards? How?
What in general might improve NWC turnover?

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Definitions:

Critical Decisions

Important choices that have significant effects on the outcome of various situations or problems.

Feedback Meeting

A gathering where individuals exchange information about performance, projects, or tasks to enhance understanding, quality, or outcomes.

Team Building

A range of activities designed to improve team performance and relationships by increasing trust, collaboration, and communication among team members.

OD Consultant

A professional skilled in organizational development, focusing on improving an organization's health and effectiveness through planned change.