If a company's asset turnover ratio decreased from 2017 to 2018,which of the following conclusions can be made?
A)The company was more efficient during 2018 in using its assets to produce profits.
B)The company produced less sales in 2018 for each dollar invested in assets.
C)The company was less profitable in 2017.
D)The company's average total assets decreased for relatively stable sales in 2017 and 2018.

Question

Quizplus · Accepted Answer

The asset turnover ratio measures how efficiently a company is using its assets to generate revenue. A decrease in the asset turnover ratio means that the company is generating less revenue per dollar of assets, indicating lower efficiency in asset utilization. Therefore, option B is the correct conclusion. Options A, C, and D are not necessarily true based on the information provided.

If a Company's Asset Turnover Ratio Decreased from 2017 to 2018,which