ACCA MA · Chapter 14 · Question 6 of 11
A company has revenue of $2,400,000, operating profit of $300,000 and capital employed of $1,500,000. What is its asset turnover?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) 1.6 times
Explanation
Asset turnover = revenue / capital employed = 2,400,000 / 1,500,000 = 1.6 times. As a check, ROCE (20%) = operating margin (300,000 / 2,400,000 = 12.5%) x asset turnover (1.6).
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