The calculation of total asset turnover is:
A) Net assets multiplied by total assets.
B) Average total assets multiplied by net sales.
C) Gross profit divided by average total assets.
D) Average total assets divided by gross profit.
E) Net sales divided by average total assets.

Question

Quizplus · Accepted Answer

Total asset turnover is calculated by dividing net sales by average total assets. This ratio is used to measure how effectively a company is using its assets to generate sales.

The Calculation of Total Asset Turnover Is