What kind of information does a company's asset turnover ratio provide?
A)How well a company collects cash from its customers
B)The amount of net sales generated by each dollar of assets invested
C)How often a company acquires new assets
D)What proportion of each dollar of sales revenue generates profit

Question

Quizplus · Accepted Answer

A company's asset turnover ratio provides information about how efficiently the company is using its assets to generate sales revenue. Specifically, it measures the amount of net sales generated by each dollar of assets invested. A higher asset turnover ratio indicates that the company is generating more revenue per dollar of assets, which is generally considered more efficient.

What Kind of Information Does a Company's Asset Turnover Ratio