Asked by Bianca Junio on Jul 29, 2024
Verified
Babak Industries is a division of a major corporation. Last year the division had total sales of $19,560,000, net operating income of $1,877,760, and average operating assets of $6,000,000.The division's turnover is closest to:
A) 3.26
B) 0.31
C) 2.48
D) 10.42
Turnover
In financial terms, it can also refer to the volume of business conducted over a period of time, such as sales turnover.
Operating Assets
Assets that are utilized in the daily operations of a business to generate revenue, excluding investment and non-operational assets.
- Determine and explicate the role of turnover within the framework of business investments and operational activities.
- Evaluate divisional performance within larger corporations using metrics such as margin, turnover, and residual income.
Verified Answer
JD
Jasleen DhillonJul 31, 2024
Final Answer :
A
Explanation :
The division's turnover is calculated as total sales divided by average operating assets, which is $19,560,000 / $6,000,000 = 3.26.
Learning Objectives
- Determine and explicate the role of turnover within the framework of business investments and operational activities.
- Evaluate divisional performance within larger corporations using metrics such as margin, turnover, and residual income.
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