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Kaleb’s Karate Supply had a profit margin of 8 percent, sales of $26.6 million,

ID: 2819087 • Letter: K

Question

Kaleb’s Karate Supply had a profit margin of 8 percent, sales of $26.6 million, and total assets of $8.1 million.

What was the total asset turnover? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

Total asset turnover             times

If management set a goal of increasing total asset turnover to 3.5 times, what would the new sales figure need to be, assuming no increase in total assets? (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to the nearest whole dollar, e.g., 32.)

Sales            $

Explanation / Answer

The  total asset turnover = Net Sales / Total Assets

= $ 26. 6 Million / $ 8.1 Million

= 3.283950617 times

Hence the correct answer is 3.28 times

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The total asset turnover = Net Sales / Total Assets

3.5 =Net Sales / 8.1 Million

Net Sales = $ 8. 1 Million * 3.5

= $ 28.35 Million

Hence the correct answer is $28,350,000