The asset turnover ratio measures
A) how often a company replaces its assets.
B) how efficiently a company uses its assets to generate sales.
C) the portion of the assets that have been financed by creditors.
D) the overall rate of return on assets.

Question

Quizplus · Accepted Answer

The asset turnover ratio is a financial metric that measures how efficiently a company uses its assets to generate sales. It is calculated by dividing sales or revenues by the total assets. This ratio is important for assessing the productivity and efficiency of a company's asset utilization.

The Asset Turnover Ratio Measures