The total asset turnover ratio is measured as:
A) sales minus total assets.
B) sales divided by total assets.
C) sales times total assets.
D) total assets divided by sales.
E) total assets plus sales.

Question

Quizplus · Accepted Answer

The total asset turnover ratio is calculated by dividing sales by total assets. This ratio measures how efficiently a company is using its assets to generate revenue. A higher turnover ratio indicates that a company is generating more revenue per dollar of assets, indicating better asset utilization.

The Total Asset Turnover Ratio Is Measured As