Answer:
Hidden Valley's Asset Turnover = 1.6
Explanation:
Average Total Asset = (Total Assets at the beginning of the year + Total Assets at the end of the year)/2
Average Total Asset = (450,000+550,000)/2
Average Total Asset = 1,000,0000/2 = 500,000
Asset Turnover = Net Sales / Average Total Asset
Asset Turnover = 800,000/500,000
Asset Turnover = 8/5
Asset Turnover = 1.6
Answer:
1.6
Explanation:
Asset turnover is a financial ratio that measures how much sales /revenue a company for investing $1 in assets. It is measured as the ratio of net sales to average total asset.
Average total assets = (asset value at start of the year + asset value at end of year)/2
Beginning asset value = $450,000
Ending asset value = $550,000
Average total assets = ($450,000 + $550,000)/2
= $500,000
Sales = $800,000
Asset turnover = $800,000/$500,000
= 1.6
This means that a revenue of $1.60 is generated for every $1.00 invested in assets.
