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Kaleb’s Karate Supply had a profit margin of 9 percent, sales of $24.2 million,

ID: 2727899 • Letter: K

Question

Kaleb’s Karate Supply had a profit margin of 9 percent, sales of $24.2 million, and total assets of $8.7 million. Requirement 1: What was the total asset turnover? (Do not round intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Total asset turnover_________ times Requirement 2: If management set a goal of increasing total asset turnover to 3 times, what would the new sales figure need to be, assuming no increase in total assets? (Do not round intermediate calculations. Enter your answer in dollars, not millions of dollars (e.g., 1,234,567).) Sales $ ______________

Explanation / Answer

Asset turnover = Sales / Total assets

= 24.2/8.7 i.e 2.78

New Sales = 8.7*3 i.e 26.10