Total asset turnover is used to evaluate:
A) The efficiency of management's use of assets to generate sales.
B) The necessity for asset replacement.
C) The number of times operating assets were sold during the year.
D) The cash flows used to acquire assets.
E) The relation between asset cost and carrying amount.

Question

Quizplus · Accepted Answer

Total asset turnover calculates the efficiency with which a firm is using its assets to generate revenue. It indicates how much revenue a company can generate with its assets. A higher total asset turnover is generally considered more favorable as it shows that the company is utilizing its assets effectively to generate sales.

Total Asset Turnover Is Used to Evaluate