The sales-to-fixed-asset ratio should be a larger value than the industry average because this would indicate that a business is more efficient in using its fixed assets.

Question

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A higher sales-to-fixed-asset ratio means that a business is generating more revenue per dollar of fixed assets, indicating greater efficiency. Therefore, a larger value than the industry average would be desirable.

The Sales-To-Fixed-Asset Ratio Should Be a Larger Value Than the Industry