Question

Use the following information to answer this question.

    

Windswept, Inc. 2010 Income Statement ($ in millions)
Net sales	$ 9,950
Less: Cost of goods sold	7,430
Less: Depreciation	445
Earnings before interest and taxes	$ 2,075
Less: Interest paid	90
Taxable Income	$ 1,985
Less: Taxes	695
Net income	$ 1,290

   

Windswept, Inc. 2009 and 2010 Balance Sheets ($ in millions)
	2009	2010		2009	2010
Cash	$ 160	$ 190	Accounts payable	$ 1,140	$ 1,265
Accounts rec.	880	780	Long-term debt	1,010	1,290
Inventory	1,630	1,585	Common stock	$ 3,270	$ 2,940
Total	$ 2,670	$ 2,555	Retained earnings	580	830
Net fixed assets	3,330	3,770
Total assets	$ 6,000	$ 6,325	Total liab. & equity	$ 6,000	$ 6,325

   

What is the fixed asset turnover? (use 2010 values)

1.57

3.89

2.64

2.23

0.38

Answer 1

fixed asset turnover=Sales/Fixed assets

=(9950/3770)

which is equal to

=2.64(Approx).