Total asset turnover is used to evaluate:
A)The efficient use of assets to generate sales.
B)The necessity for asset replacement.
C)The number of times operating assets were sold during the year.
D)The cash flows used to acquire assets.
E)The relation between asset cost and book value.

Question

Quizplus · Accepted Answer

Total asset turnover is a measure of a company's ability to generate revenue from its assets. It indicates how efficiently a company is using its assets to generate sales. This ratio is calculated by dividing a company's revenue by its total assets. Therefore, the correct answer is A.

Total Asset Turnover Is Used to Evaluate