Which one of the following statements is NOT true of asset turnover ratios?
A) Asset turnover ratios measure the level of sales per dollar of assets that the company has.
B) The fixed assets turnover ratio is less significant for equipment-intensive manufacturing industry companies than the total assets turnover ratio.
C) The higher the total asset turnover, the more efficiently management is using total assets.
D) All of the above are true.

Question

Quizplus · Accepted Answer

The statement that the fixed assets turnover ratio is less significant for equipment-intensive manufacturing industry companies than the total assets turnover ratio is not true. In fact, for these companies, the fixed assets turnover ratio may be a more important indicator of efficiency as their main investment is in fixed assets such as machinery and equipment. The total assets turnover ratio may also be affected by non-operating assets such as investments or cash holdings, which may not be indicative of the company's operational efficiency.

Which One of the Following Statements Is NOT True of Asset