Question

Turnover is calculated as a. operating income / average operating assets. b. (beginning operating assets + ending operating assets) / 2. c. average operating assets / operating income. d. operating income / sales. e. sales / average operating assets.

Answer 1

Answer:

e. sales / average operating assets.

Explanation:

The turnover shows a ratio between sales and the average operating assets

Turnover = Sales ÷ Average Operating Assets

where,

Sales is the sales revenue recorded for the period and it is shown on the credit side of the income statement

And, the average operating assets would be

= (Beginning Operating Assets + Ending Operating Assets) ÷ 2

By considering these two items we can compute it easily