Calculate AquaTech’s Asset Turnover. Note: Round to two decimal places and provide your answer in times per annum without unit signs, XX.XX.

Question

BlackTom AI · Accepted Answer

To determine Asset Turnover, we need to understand the formula and the data required.

Step 1: Identify the formula. Asset Turnover = Net Sales / Average Total Assets. It measures how efficiently a company uses its assets to generate sales, expressed as times per year.

Step 2: Determine data requirements. You must have (a) net sales (or revenue) for the period, and (b) total assets at the beginning and end of the period to compute the average total assets: Average Total Assets = (Beginning Total Assets + Ending Total Assets) / 2. Alternatively, some problems provide a single figure for average assets.

Step 3: Apply rounding instructions. The prompt asks to round to two decimal places and provide the answer as XX.XX, without unit signs. If you obtain a raw quotient, you would round to two decimals (e.g., 0.756 becomes 0.76; 0.764 becomes 0.76; 0.765 becomes 0.77, following standard rounding).

Step 4: Case with missing data. In the current prompt, there is no data for Net Sales or Beginning/Ending Total Assets, and the answer field provides a numeric result (0.76) but without the underlying inputs this cannot be independently verified. If you were given Net Sales and Average Total Assets (or Beginning/Ending Assets), you would substitute them into the formula and perform the division.

Step 5: Potential pitfalls to watch for. Ensure you’re using net sales (not gross sales) and that assets are measured for the same period. If the problem uses average assets, use that; if it provides beginning and ending assets, compute the average as described. Also ensure the calculation is performed in the correct units and that rounding is applied only after the final division.

Step 6: How you would verify your result. If you have Net Sales and Average Total Assets, compute the quotient, then round to two decimals. If your working results in 0.755 or 0.764, you would round to 0.76; if it’s 0.765 or higher, it would round to 0.77, depending on the exact value.

Note: Because the problem as given lacks the necessary input figures (net sales and asset figures), there is no way to independently confirm that 0.76 is the correct Asset Turnover without those numbers. To validate, please provide Net Sales and Beginning/Ending Total Assets (or Average Total Assets).

ACCT10001_2025_SM2 Exam: Accounting Reports and Analysis (ACCT10001_2025_SM2)- Requires Respondus LockDown Browser

Calculate AquaTech’s Asset Turnover. Note: Round to two decimal places and provide your answer in times per annum without unit signs, XX.XX.

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