Kelso's Pharmacy generates $2 in sales for every $1 the firm has invested in total assets.Which one of the following ratios would reflect this relationship?
A)Receivables turnover
B)Equity multiplier
C)Profit margin
D)Return on assets
E)Total asset turnover

Question

Quizplus · Accepted Answer

Total asset turnover reflects the relationship between sales and total assets. A ratio of $2 in sales for every $1 invested in total assets indicates that the total asset turnover ratio is 2:1.

Kelso's Pharmacy Generates $2 in Sales for Every $1 the Firm