A ﬁxed asset turnover ratio of .72 means that:
A) For every $1 in total assets, a ﬁrm can generate $0.72 in net income.
B) For every $1 in net ﬁxed assets, a ﬁrm can generate $0.72 in net income.
C) For every $1 in total assets, a ﬁrm can generate $0.72 in sales.
D) For every $1 in net ﬁxed assets, a ﬁrm can generate $0.72 in sales.
E) For every $1 in net ﬁxed assets, a ﬁrm can obtain $0.72 in debt.

Question

Quizplus · Accepted Answer

The fixed asset turnover ratio measures how efficiently a firm uses its net fixed assets to generate sales, not net income or debt.

A ﬁXed Asset Turnover Ratio of