A firm with a total asset turnover lower than industry standard may have
A) excessive debt.
B) excessive cost of goods sold.
C) insufficient sales.
D) insufficient fixed assets.

Question

Quizplus · Accepted Answer

A lower total asset turnover indicates that the firm is generating less revenue for every dollar of assets it has. This could be due to insufficient sales, meaning the firm is not selling enough to fully utilize its assets. Excessive debt, cost of goods sold, or insufficient fixed assets may affect profitability and efficiency but do not necessarily lead to lower turnover.

A Firm with a Total Asset Turnover Lower Than Industry