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Butters Corporation has a profit margin of 12 percent and its return on assets (investment) is 22 percent. Wha


What is its asset turnover ratio? Round answer to one decimal place. Example 2.3 or 0.7

Profit Margin = NI/Sales
Return on Assets = NI/Assets
Asset turnover = Sales/Assets

So PM/ROA = (NI/Sales) / (NI/Assets) or (NI/Sales) * (Assets/NI)
Net income will cancel out leaving us with Sales/Assets, or Turnover

so,

.22/.12 = 1.83

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