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Use the following information to answer this question.
Bayside, Inc. 2010 Income Statement ( in thousands)
Net sales $6,020
Less: Cost of goods sold 4,290
Less: Depreciation 365
Earnings before interest and taxes$1,365
Less: Interest paid 32
Taxable Income $1,333
Less: Taxes 467
Net income $866
Bayside, Inc. 2009 and 2010 Balance Sheets ($ in thousands)
2009 2010 2009 2010
Cash $115 $220 Accounts payable $1,580 $1,560
Accounts rec1,010 850 Long-term debt 820 620
Inventory 1,685 2,070 Common stock $3,260 $3,290
Total $2,810 $3,140 Retained earnings 890 1,140
Net fixed assets 3,740 3,470
Total assets $6,550 $6,610 Total liab. & equity $6,550 $6,610
How many dollars of sales are being generated from every dollar of fixed assets?
a. $0.92
b. $0.91
c. $1.73
d. $1.67
e. $1.61,

Respuesta :

Parrain

Answer:  d. $1.67

Explanation:

The amount of sales that a company generates per $1 of fixed assets is known as the Fixed Assets turnover Ratio.

Formula is;

= [tex]\frac{Net Sales}{Average Fixed Assets}[/tex]

Average Fixed Assets = [tex]\frac{Beginning Balance + Ending Balance}{2}[/tex]

= [tex]\frac{3,740 + 3,470}{2}[/tex]

= $3,605

Fixed Asset Turnover Ratio = [tex]\frac{6,020}{3,605}[/tex]

= 1.67

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