The Wood Shop generates $.97 in sales for every $1 invested in total assets.Which one of the following ratios would reflect this relationship?
A)Receivables turnover
B)Equity multiplier
C)Profit margin
D)Return on assets
E)Total asset turnover

Question

Quizplus · Accepted Answer

The total asset turnover ratio measures how efficiently a company uses its assets to generate sales, calculated as sales divided by total assets. Here, $.97 in sales for every $1 in assets indicates a total asset turnover of 0.97.

The Wood Shop Generates