Practice prompt · Q:long-lived-asset-estimates-and-exits/asset-turnover-and-return-001

Compute asset turnover and return on assets

Tests whether the learner uses average total assets and keeps the two ratios distinct.

Updated Sep 11, 2026 Review due Nov 18, 2026

Practice

Check your answer

Choose a response, then check the answer and explanation.

Net sales 3,600,000. Net income 288,000. Total assets were 2,200,000 at the start of the year and 2,600,000 at the end.

Return on assets equals profit margin times asset turnover, so a change in it always traces back to one of the two. Reading which one moved is what makes the ratio worth computing.

Choose the best answer. a Asset turnover 1.50 and return on assets 12.0 percent. b Asset turnover 1.38 and return on assets 11.1 percent. c Asset turnover 1.50 and return on assets 8.0 percent. d Asset turnover 12.50 and return on assets 12.0 percent.

Your answer stays on this page. It is not sent or saved.

Show explanationHide explanation

Answer: a

Choice a. Both ratios use average total assets of 2,400,000, giving 1.50 times and 12.0 percent.