The ABC Depot reported the following data (in millions) in its recent financial statements: Year 2...

 

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The ABC Depot reported the following data (in millions) in its recent financial statements: Year 2 Year 1 Total sales $54,750 $49,680 Total assets: Beginning of year 35,200 37,800 End of year 37,800 45,000 a. Determine the asset turnover ratio for ABC Depot for Year 2 and Year 1. Round to one decimal place. Year 2 Year 1 Asset turnover ratio b. What does an asset turnover ratio indicate? 1. Effectiveness in the use of assets to generate revenue. 2. Effective use of revenue to create assets. 3. Effective use of assets to reduce cost. 4. Effective use of assets to increase assets. The ABC Depot reported the following data (in millions) in its recent financial statements: Year 2 Year 1 Total sales $54,750 $49,680 Total assets: Beginning of year 35,200 37,800 End of year 37,800 45,000 a. Determine the asset turnover ratio for ABC Depot for Year 2 and Year 1. Round to one decimal place. Year 2 Year 1 Asset turnover ratio b. What does an asset turnover ratio indicate? 1. Effectiveness in the use of assets to generate revenue. 2. Effective use of revenue to create assets. 3. Effective use of assets to reduce cost. 4. Effective use of assets to increase assets.

Answer rating: 100% (QA)

a Asset turnover ratio Total sales average of total assets Avera... View the full answer