The Top Hat Division of Blandon's Fine Menswear had the following results last year (in thousands). Sales $ 5 comma 100 comma 000 Operating income $ 510 comma 000 Total assets $ 3 comma 000 comma 000 Current liabilities $ 270 comma 000 Management's target rate of return is 23 % and the weighted average cost of capital is 13 %. What is the Top Hat Division's capital turnover?

Question

Business

Braxton

2 August, 07:31

The Top Hat Division of Blandon's Fine Menswear had the following results last year (in thousands). Sales $ 5 comma 100 comma 000 Operating income $ 510 comma 000 Total assets $ 3 comma 000 comma 000 Current liabilities $ 270 comma 000 Management's target rate of return is 23 % and the weighted average cost of capital is 13 %. What is the Top Hat Division's capital turnover?

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Emma · Answer 1

1.5

Explanation:

The computation of the capital turnover is shown below:

Capital turnover = Sales : Total assets

where,

Sales is $5,100,000

And, the total assets is $3,000,000

So, the capital turnover is

= $5,100,000 : $3,000,000

= 1.5

By dividing the sales from the total assets we can get the capital turnover and the same is shown above