Total asset turnover measures the ability of a firm to:
A)generate profits on sales.
B)generate sales through the use of assets.
C)buy new assets.
D)move inventory.
E)cover long-term debt.

Question

Quizplus · Accepted Answer

Total asset turnover measures how efficiently a company is generating sales revenue from its investments in assets. It is calculated by dividing a company's net sales by its total assets. Therefore, option B - generate sales through the use of assets - is the correct answer.

Total Asset Turnover Measures the Ability of a Firm To