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    Question

    MNP Inc has a gross profit of Rs 75000 on a sale of Rs 350000. The balance sheet shows average total assets of Rs 200000 with an average inventory of Rs 50000, MNP’s total asset turnover and inventory turnover are closest to:

              Assets Turnover                                 Inventory Turnover

    a)      1.5 times                                              3.5 times

    b)       1.75 times                                             5.5 times

    c)        2 times                                                 5 times

    d)       1.75 times                                            5 times

    e)        2 times                                                5.5 times

    A a Correct Answer Incorrect Answer
    B b Correct Answer Incorrect Answer
    C c Correct Answer Incorrect Answer
    D d Correct Answer Incorrect Answer
    E e Correct Answer Incorrect Answer

    Solution

    Total Assets Turnover = Sales/Total Assets 350000/200000 = 1.75 times Inventory Turnover = COGS /Average Inventory COGS = 350000-75000 = 275000 275000/50000 = 5.5 times

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