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Improvement on Total Asset Turnover

Starbucks had a Total Assets Turnover (TAT) ratio of 1.2 in 2007, which was an improvement over a TAT of 0.96 in 2006. If Starbucks had the exact same level of sales, debt, and profit in 2007 as they did in 2006, how did their TAT improve?

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Total Asset Turnover = Sales/Total Assets
The sales level remained the same, if the TAT improved, ...

Solution Summary

The solution explains the reasons for improvement in total asset turnover.