A decrease in total asset turnover will result in ________ in the return on equity.
A) an increase
B) a decrease
C) no change
D) an undetermined change

Question

Quizplus · Accepted Answer

A decrease in total asset turnover means that the company is generating less revenue for every dollar of assets it has. This leads to a decrease in the return on equity, as the profits generated by the company are spread over a larger asset base, resulting in a lower return for the shareholders.

A Decrease in Total Asset Turnover Will Result in ________