A reduction in the ratio net sales/average property, plant and equipment over time could mean:

Name: A reduction in the ratio net sales/average property, plant and equipment over time could mean:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A reduction in the ratio indicates that the average property, plant, and equipment are increasing faster than the net sales, which suggests that the company has over-invested in its property, plant, and equipment, leading to lower sales and a potential decrease in profitability.

A Reduction in the Ratio Net Sales/average Property, Plant and Equipment