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    Question

    Read the following information to answer the below questions:   Net Sales = 40,00,000 (20 % GP Element) out of which 40% is on credit. Opening Inventories were 60 % of closing inventories. Opening Receivables are 120,000.   

    Calculate Total asset turnover ratio of the

    company?
    A 1.68 Correct Answer Incorrect Answer
    B 1.65 Correct Answer Incorrect Answer
    C 1.77 Correct Answer Incorrect Answer
    D 1.71 Correct Answer Incorrect Answer

    Solution

    Total asset turnover ratio = Sales/Total Assets 40,00,000 / 23,34,000 =1.71 Total assets: Building + Plant & Machinery+ Land + Stock + Debtors + Cash 5,00,000+4,50,000+6,00,000+4,20,000+3,40,000+24,000 =23,34,000

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