Asset utilization ratios
A) relate balance sheet assets to income statement sales.
B) measure how much cash is available for reinvestment into current assets.
C) are most important to stockholders.
D) measure the firm's ability to generate a profit on sales.

Question

Quizplus · Accepted Answer

Asset utilization ratios relate balance sheet assets (such as inventory, fixed assets, and accounts receivable) to income statement sales to measure the efficiency with which a company uses its assets to generate revenue. Examples of asset utilization ratios include inventory turnover ratio, days sales outstanding, and asset turnover ratio.

Asset Utilization Ratios