Suppose during 2022 that Federal Express reported the following information (in millions) : net sales of $34,450 and net income of $89. Its balance sheet also showed total assets at the beginning of the year of $24,590 and total assets at the end of the year of $23,300. Calculate the asset turnover and return on assets. (Round asset turnover to 2 decimal places, e. g. 6.25 and return on assets to 1 decimal place, e. g. 17.5%.)

Question

Leia Nash

Business

5 July, 02:56

Suppose during 2022 that Federal Express reported the following information (in millions) : net sales of $34,450 and net income of $89. Its balance sheet also showed total assets at the beginning of the year of $24,590 and total assets at the end of the year of $23,300. Calculate the asset turnover and return on assets. (Round asset turnover to 2 decimal places, e. g. 6.25 and return on assets to 1 decimal place, e. g. 17.5%.)

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Answers (1)

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Gabby · Answer 1

1.44 times and 0.37%

Explanation:

The computation of the asset turnover is shown below:

Total asset turnover = (Sales : Average of Total assets)

where,

Sales = $34,450

Average of total assets is

= ($24,590 + $23,300) : 2

= $23,945

So, the total asset turnover is

= ($34,450) : ($23,945)

= 1.44 times

The return on assets

= Net income : average of total assets

= $89 : $23,945

= 0.37%