Which of the following statements regarding the fixed asset turnover ratio is incorrect?
A)The numerator is net operating income.
B)The denominator is average net fixed assets.
C)The ratio is used to assess a company's effectiveness in generating sales from its fixed assets.
D)The ratio increases when a company sells a factory building for a gain.

Question

Quizplus · Accepted Answer

The numerator of the fixed asset turnover ratio is typically sales or revenue generated, not net operating income.

Which of the Following Statements Regarding the Fixed Asset Turnover