Companies with relatively high assets-to-sales ratios require a relatively large amount of new assets for any given increase in sales; hence, they have a greater need for external financing.There are currently no alternatives for these types of firms to lower their asset requirements.

Question

Quizplus · Accepted Answer

Companies can implement strategies such as improving asset turnover, outsourcing, or adopting more efficient technologies to lower their asset requirements and reduce the need for external financing.

Companies with Relatively High Assets-To-Sales Ratios Require a Relatively Large