The balance sheets of Integrated Systems reports total assets of $890,000 and $950,000 at the beginning and end of the year, respectively. Sales revenues are $1.6 million, net income is $185,000, and net cash flows from operating activities are $155,000. Calculate the cash return on assets, cash flow to sales, and asset turnover for Integrated Systems.
What will be an ideal response?
| Operating Cash Flows | ÷ | Average Total Assets | = | Cash Return on Assets |
| $155,000 | ÷ | ($890,000 + $950,000)/2 | = | 16.8% (rounded) |
| Operating Cash Flows | ÷ | Sales | = | Cash Flow to Sales |
| $155,000 | ÷ | $1,600,000 | = | 9.7% (rounded) |
| Sales | ÷ | Average Total Assets | = | Asset Turnover |
| $1,600,000 | ÷ | ($890,000 + $950,000)/2 | = | 1.7 times (rounded) |
Business
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