A declining fixed asset turnover ratio can actually be caused by acquiring additional assets in the current period in preparation for greater future sales.
BT: Comprehension

Question

Quizplus · Accepted Answer

This statement is true. The fixed asset turnover ratio measures how efficiently a company uses its fixed assets to generate sales. If a company acquires additional assets in the current period in preparation for greater future sales, it may temporarily decrease the fixed asset turnover ratio. However, this can ultimately lead to increased sales and a higher turnover ratio in the future.

A Declining Fixed Asset Turnover Ratio Can Actually Be Caused