Refer to the summary financial information for Momentum Clothing Distributors.Which of the following statements is true?
A)The company's level of financing risk did not change between 2010 and 2011.
B)In comparison to 2010,the company became more efficient in 2011 in generating revenues from its investment in assets.
C)Despite the increase in sales in 2011,the company controlled its expenses just as well as it had in 2010.
D)None of the above.

Question

Quizplus · Accepted Answer

The company's asset turnover ratio increased from 1.0 in 2010 to 1.2 in 2011, indicating that it became more efficient in generating revenues from its investment in assets. There is no information provided to suggest whether the company's level of financing risk changed or whether it controlled expenses as well in 2011 as it did in 2010.

Refer to the Summary Financial Information for Momentum Clothing Distributors