The total asset turnover ratio measures
A)how well a firm uses its assets to produce sales
B)the rate of return on a firm's investment in assets
C)the portion of assets that has been financed by investors
D)the portion of assets that has been financed by creditors

Question

Quizplus · Accepted Answer

The total asset turnover ratio is a measure of how efficiently a firm utilizes its assets to generate sales. It shows the extent to which a company is using its assets to generate revenue, and a higher ratio indicates better asset utilization.

The Total Asset Turnover Ratio Measures