Question: 1. How is total asset turnover computed? Why would a financial statement user be interested in total asset turnover?
2. Joy Co. reports net sales of $4,862,000 for 2010 and $7,542,000 for 2011. End-of-year balances for total assets are 2009, $1,586,000; 2010, $1,700,000; and 2011, $1,882,000.
(a) Compute Joy's total asset turnover for 2010 and 2011.
(b) Comment on Joy's efficiency in using its assets if its competitors average a total asset turnover of 3.0.