J. C. Penney: Asset turnover ratio J. C. Penney Company, Inc. is a large general...
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Accounting
J. C. Penney: Asset turnover ratio
J. C. Penney Company, Inc. is a large general merchandise retailer in the United States. The following data were obtained from its financial statements for four recent years:
Year 4
Year 3
Year 2
Year 1
Total sales
$12,257
$11,859
$12,985
$17,260
Total assets:
Beginning of year
11,801
9,781
11,424
13,068
End of year
10,404
11,801
9,781
11,424
a. Compute the asset turnover ratio for each year. (Round to two decimal places).
Year 1
Year 2
Year 3
Year 4
Asset turnover ratio
b. On your own paper, plot the asset turnover ratio on a line chart with the year on the horizontal axis.
c. Interpret the trend in this ratio over the four years.
The asset turnover ratio has clearly over the four-year period. This trend suggests that its sales are faster than its assets.
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