current assets 25,000
non-current assets 75,000
sales 300000
what is the total asset turnover
To calculate the total asset turnover, you need to divide the company's sales by its average total assets.
1. Start by finding the average total assets. This can be calculated by adding the current assets and non-current assets and then dividing the sum by 2.
Average Total Assets = (Current Assets + Non-Current Assets) / 2
= ($25,000 + $75,000) / 2
= $50,000
2. Once you have the average total assets, you can calculate the total asset turnover by dividing the company's sales by the average total assets.
Total Asset Turnover = Sales / Average Total Assets
= $300,000 / $50,000
= 6
Therefore, the total asset turnover is 6. This indicates that for every $1 of average total assets, the company generates $6 in sales.