Question

Flask Company reports net sales of $4,000 million; cost of goods sold of $3,600 million; net income of $720 million; and average total assets of $3,450 million. Compute its total asset turnover.

Answer 1

1.16

Step-by-step explanation:

Given that,

Net sales = $4,000 million;

Cost of goods sold = $3,600 million;

Net income = $720 million

Average total assets = $3,450 million

Total Asset Turnover Ratio:

= Net Sales ÷ Total Average Assets

= $4,000 million ÷ $3,450 million

= 1.16

Therefore, the total asset turnover ratio of Flask Company is 1.16.