If a company's asset turnover ratio decreased from 2011 to 2012,which of the following conclusions can be made?
A)The company was more efficient during 2012 in using its assets to produce profits
B)The company produced less sales in 2012 for each dollar invested in assets.
C)The company was less profitable in 2011.
D)The company over invested in assets in 2012.

Question

Quizplus · Accepted Answer

The asset turnover ratio measures how efficiently a company uses its assets to generate sales. A decrease in the ratio indicates that the company generated less sales for each dollar invested in assets. Therefore, choice B is the correct answer. The other choices are not accurate conclusions that can be made with just this information.

If a Company's Asset Turnover Ratio Decreased from 2011 to 2012,which