Question

Suppose during 2017 that Federal Express reported the following information (in millions): net sales of $34,700 and net income of $94. Its balance sheet also showed total assets at the beginning of the year of $24,640 and total assets at the end of the year of $23,300. Calculate the asset turnover and return on assets. (Round answers to 2 decimal places, e.g. 6.25 or 17.54%.)

Answer 1

Answer

given,

Net sale = $34,700

Net income = $94

Total assets at the beginning = $24,640

Total asset at the end of the year = $23,300

Average asset  =$\dfrac{\ 24,640 + \ 23,300}{2}$

                         =$\ 23,970 }$

average turnover ratio = $\dfrac{net\ sale}{average\ asset}$

                                     = $\dfrac{\ 34,700}{\ 23970}$

                                      = 1.447

Return on asset  =  $\dfrac{net\ income}{average\ asset}\times 100$

                            = $\dfrac{\ 94}{\ 23970}\times 100$

                            = 0.39 %