Use This Balance Sheet and Income Statement to Answer the Following

question 159

Multiple Choice

Use this balance sheet and income statement to answer the following question.Use ending balances whenever average balances are required for computing ratios. $\begin{array}{c} \text {Abner Systems, Inc.}\\ \text {Income Statement}\\ \text {For the Year Ended December 31, 2010}\\\begin{array}{llr} \text { Net sales } &\$24,000\\ \text { Costs of goods sold } &8,000\\ \text { Gross margin } &\$16,000\\ \text { Operating expenses} &8,000\\ \text {Income before income taxes } &\$8,000\\ \text { Income taxes } &3,200\\ \text { Net income} &\$4,800\end{array}\end{array}$


The asset turnover for Abner Systems is

• A) 1.00 times.
• B) 1.33 times.
• C) .83 times.
• D) 1.20 times.

---

Definitions:

Trade Restrictions

Measures imposed by governments to regulate international trade, including tariffs, quotas, and embargoes, to protect domestic industries or to affect political change.

Economic Inefficiency

A situation where resources are not utilized in the best possible way, leading to wastage and loss of potential output.

Saving Rate

The portion of income not spent on current expenditures or taxes and is typically expressed as a percentage of total personal disposable income.

Cost Of Capital

The rate of return a company must earn on its investments to maintain its market value and attract funds, encompassing the cost of debt and equity.