Which of these statements is true?
A) In general, the lower the total asset turnover and the lower the capital intensity ratio, the more efficient the overall asset management of the firm will be.
B) In general, the lower the total asset turnover and the higher the capital intensity ratio, the more efficient the overall asset management of the firm will be.
C) In general, the higher the total asset turnover and the lower the capital intensity ratio, the more efficient the overall asset management of the firm will be.
D) In general, the higher the total asset turnover and the higher the capital intensity ratio, the more efficient the overall asset management of the firm will be.

Question

Quizplus · Accepted Answer

Total asset turnover measures how efficiently a firm uses its assets to generate sales, so a higher turnover indicates more efficient use of assets. A lower capital intensity ratio indicates less capital is needed for a given level of output, also suggesting higher efficiency.

Which of These Statements Is True