What kind of information does a company's asset turnover ratio provide?
A) What proportion of each dollar of sales revenue generates net income
B) How often a company acquires new assets
C) How well a company collects cash from its customers
D) The amount of net sales generated by each dollar of assets invested

Question

Quizplus · Accepted Answer

The asset turnover ratio measures how efficiently a company uses its assets to generate revenue. It calculates the amount of net sales generated by each dollar of assets invested. It does not provide information on net income, acquisition of new assets, or cash collection from customers.

What Kind of Information Does a Company's Asset Turnover Ratio