otal Income of the Zee Ltd 8,00,000, other income is 45000 and total of the assets is 15,00,000, current liability is 250,000, calculate asset turnover ratio.1.550.50.480.53
Question
otal Income of the Zee Ltd 8,00,000, other income is 45000 and total of the assets is 15,00,000, current liability is 250,000, calculate asset turnover ratio.1.550.50.480.53
Solution
The asset turnover ratio is a measure of a company's efficiency in using its assets to generate sales or revenue. It is calculated as:
Asset Turnover Ratio = Total Sales / Total Assets
In this case, the total sales or income of Zee Ltd is the sum of its total income and other income, which is 8,00,000 + 45,000 = 8,45,000.
The total assets of the company are 15,00,000.
So, the asset turnover ratio is:
Asset Turnover Ratio = 8,45,000 / 15,00,000 = 0.563
Therefore, the asset turnover ratio of Zee Ltd is 0.563.
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