A firm with total asset turnover lower than the industry average may have

Question

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Total asset turnover is calculated by dividing the firm's total revenue by its total assets. Therefore, if a firm has a lower total asset turnover than the industry average, it means that it is generating less revenue per dollar of assets compared to its peers. This could be due to insufficient sales, meaning the firm is not selling enough of its product or service to fully utilize its assets. Excessive debt, excessive cost of goods sold, or insufficient fixed assets may also have an impact on the firm's financial performance, but they are not directly related to the total asset turnover ratio.

A Firm with Total Asset Turnover Lower Than the Industry