The following information was taken from the financial statements of Lea Corporation for December 31, Year 2 and Year 1: Year 2 total sales: $5,000,000. Year 2 total assets: $450,000-beginning balance, $600,000 - ending balance Year 1 total sales: $3,500,000. Year 1 total assets: $565,000-beginning balance, $450,000 - ending balance The ratio of sales to assets for Year 2 and Year 1 is a. Year 2, 9.52; Year 1, 6.90 b. Year 2, 11.12; Year 1, 6.90 c. Year 2, 9.52; Year 1, 7.80 d. None of these choices are correct

Question

Business

Charlie Oconnor

10 June, 01:21

The following information was taken from the financial statements of Lea Corporation for December 31, Year 2 and Year 1: Year 2 total sales: $5,000,000. Year 2 total assets: $450,000-beginning balance, $600,000 - ending balance Year 1 total sales: $3,500,000. Year 1 total assets: $565,000-beginning balance, $450,000 - ending balance The ratio of sales to assets for Year 2 and Year 1 is a. Year 2, 9.52; Year 1, 6.90 b. Year 2, 11.12; Year 1, 6.90 c. Year 2, 9.52; Year 1, 7.80 d. None of these choices are correct

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Answers (1)

Know the Answer?

Desmond Velazquez · Answer 1

For Year 2 and Year 1 the revenue to assets ratio is:

a. Year 2, 9.52; Year 1, 6.90

Explanation:

Year 2 Sales were equivalent to:-

= 5,000,000 / (450,000 + 650,000) / 2 ]

= 9.52

Year 1 Sales were equals to:-

= 3,500,000 / [ (565,000 + 450,000) / 2 ]

= 6,90