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6 May, 17:48

The Top Hat Division of Blandon's Fine Menswear had the following results last year (in thousands). Sales $ 5 comma 100 comma 000 Operating income $ 510 comma 000 Total assets $ 3 comma 000 comma 000 Current liabilities $ 270 comma 000 Management's target rate of return is 23 % and the weighted average cost of capital is 13 %. What is the Top Hat Division's capital turnover?

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  1. 6 May, 18:07
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    1.5

    Explanation:

    The computation of the capital turnover is shown below:

    Capital turnover = Sales : Total assets

    where,

    Sales is $5,100,000

    And, the total assets is $3,000,000

    So, the capital turnover is

    = $5,100,000 : $3,000,000

    = 1.5

    By dividing the sales from the total assets we can get the capital turnover and the same is shown above
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