Seidner, Inc provides the following data
2017 2016
Assets
Current Assets:
Cash and Cash Equivalents $40,000 $25,000
Accounts Receivable, Net 37,000 62,000
Merchandise Inventory 60,000 50,000
Total Current Assets $137,000 137,000
Property, Plant, and Equipment, Net $121,000 120,000
Total Assets $258,000 $257,000
Net Credit Sales $550,000
Cost of Goods Sold (155,000 )
Gross Profit $395,000
Calculate the asset turnover ratio for 2017. (Round your answer to two decimal places.)
A) 4.01 times
B) 1.07 times
C) 0.60 times
D) 2.14 times
D .D)
Asset turnover ratio = Net Sales / Average total assets = $550,000 / [($258,000+ $257,000 ) / 2] =
$550,000 / 257,500 = 2.14 times
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