Independence Corporation reported beginning and ending total assets of $ 18 comma 000 and $ 28 comma 000 , respectively. Its net sales for the year were $ 21 comma 850. What was Independence 's asset turnover ratio?

0.95

Explanation:

Given that

Net sales = $21,850

Beginning assets = $18,000

Ending assets = $28,000

The computation of Independence 's asset turnover ratio is shown below:-

Assets turnover ratio = Net sales : Average total assets

= $21,850 : (($18,000 + $28,000) : 2 ))

= $21,850 : ($46,000 : 2)

= $21,850 : $23,000

= 0.95

So, for computing the assets turnover ration we simply applied the above formula.