Final answer:
To find Noble Tech Inc.'s total asset turnover, you use the ROA and net profit margin by dividing ROA by net profit margin. After calculations, the company's asset turnover ratio is 1.88 when rounded to two decimal places.
Step-by-step explanation:
To calculate the company's total asset turnover, we'll use its Return on Assets (ROA) and net profit margin. These are key financial ratios that indicate how well the company uses its assets to generate profits and the percentage of revenue that has turned into profits, respectively. The ROA is calculated by dividing the net income by the total assets, while the net profit margin is calculated by dividing the net income by the revenue. In equation form, Return on Assets (ROA) is Net Profit Margin x Asset Turnover.
Given that Noble Tech Inc. reported a ROA of 15% and a net profit margin of 8%, we can set up the equation as follows:
ROA = Net Profit Margin x Asset Turnover
0.15 = 0.08 x Asset Turnover
By dividing both sides by 0.08, we can solve for the asset turnover:
Asset Turnover = 0.15 / 0.08
Asset Turnover = 1.875
When rounded to two decimal places, the asset turnover is 1.88.