Calculate the Asset Turnover for Chrissie's Cooking Supply based on its Balance Sheet and Income Statement. Use average balances in your calculation where applicable. (On 12/31/2014, Chrissie's Cooking Supply had total assets of $65,173.)

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letmeanswer letmeanswer · Answer 1 · 2020-03-29T11:14:05+02:00

The asset turnover = 1.84

Explanation:

Asset Turnover = Sales / Average total assets

First, we will calculate average total assets as below:

Average total assets = Beginning assets + Ending assets / 2

Beginning assets = assets on 12/31/2014 = $65173

Ending assets = assets on 12/31/2015 = $100676

Average total assets = [tex](\$ 65173+\$ 100676) / 2[/tex] = [tex]\$ 165849 / 2[/tex] = $82924.5

Sales / Revenue = $152633

Now, putting these values in the asset turnover formula, we get,

Asset Turnover = Sales / Average total assets

Asset turnover = [tex]\$ 152633 / \$ 82924.5[/tex] = 1.84