Rangoon Corp's sales last year were $400,000 and its year-end total assets were $300,000. The average firm in the industry has a total assets turnover of 2.5. The new CFO belives the firm has excess assets that can be sold so as to bring the TATO down to the industry average without affecting sales. By how much must the assets be reduced to bring the TATO to the industry average?© BrainMass Inc. brainmass.com March 4, 2021, 8:11 pm ad1c9bdddf
Rangoon Corp's sales = $400,000
Rangoon Corp's year-end total assets = $300,000
Total Assests Turnover Ration (TATO) an average firm in the industry has = 2.5
Assests intended to be achieved by Rangoon Corps = Rangoon Corp's sales/ TATO of ...
The solution determines how much Rangoon Corp's assets much be reduced to bring the TATO into the industry average.